Document:

Execution Copy

                           AGREEMENT REGARDING LEASES

         This Agreement Regarding Leases is made as of the 2nd day of November,
2000 between O.M. 66 B Street LLC ("O.M.") having an address c/o Cabot, Cabot &
Forbes of New England, Inc., 99 Summer Street, Boston, MA 02110, Attention: John
J. Doherty, President, and Designs, Inc. having an address of 66 B Street,
Needham, MA 02494, Attention: David Levin, President and Chief Executive Officer
("Designs").

I.       RECITALS

1. O.M. is successor Landlord and Designs is Tenant under that certain Lease by
and between the Trustees of the R.C.L. Trusts, the G.W.B. Trusts, and the A.C.F.
Trusts as Landlord and Designs as Tenant dated as of November 4, 1995 with
respect to that certain real property located within the New England Industrial
Center in Needham, Massachusetts known and numbered as 66 B Street, Needham,
Massachusetts, including the building thereon (the "Building") containing
approximately 80,170 rentable square feet (the "Existing Lease").

2. All capitalized terms not otherwise defined herein shall have the meanings
given to them in the Existing Lease.

3. O.M. and Designs  wish to grant to O.M. the option to terminate  the Existing
Lease and to provide for certain other agreements between O.M. and Designs,  all
on, and subject to, the terms and conditions set forth herein.

         NOW, THEREFORE, O.M. and Designs agree as follows:

II.      LEASE TERMINATION AGREEMENT; ESCROW AGREEMENT, NEW LEASE

1. Consideration. Within three (3) business days after the date hereof, O.M.
shall pay to Designs, by certified or bank check, a non-refundable payment of
One Hundred Thousand ($100,000) Dollars in consideration of the execution and
delivery of this Agreement by Designs (the "Consideration Payment"). The
Consideration Payment shall be deemed to be earned upon the payment thereof.

2.       Option to Terminate Existing Lease.

(a) At any time on or prior to February 2, 2002 (the "Outside Exercise Date")
(the period between the date hereof and the Outside Exercise Date being referred
to herein as the "Option Period"), O.M. may terminate the Existing Lease (the
"Termination Option") by giving notice of termination to Designs in the form of
Annex A hereto (the "Termination Notice"), with a copy thereto to First American
Title Insurance Company (or such other escrow agent upon which the parties
hereto shall reasonably agree if First American Title Insurance Company is
unable or unwilling to serve as escrow agent) ("Escrow Agent"), which notice and
termination shall be effective only if O.M. also tenders to Escrow Agent at the
time it gives the Termination Notice as aforesaid (i) in the form of a certified
or bank check payable to

Escrow Agent, or by wire transfer in immediately available funds, the sum of
Four Million Four Hundred Thousand ($4,400,000) Dollars (the "Termination Notice
Fee"), which shall be held and disbursed in accordance with the provisions of
this Agreement and the Escrow Agreement in the form of Annex B hereto, which
Escrow Agreement is to be entered into simultaneously with this Agreement by and
among O.M., Designs and Escrow Agent, and (ii) a letter of credit in the amount
of Four Million Five Hundred Thousand Dollars ($4,500,000) (the "O.M. Surrender
LC") in the form of Annex C hereto. The O.M. Surrender LC shall be issued by the
bank identified in Annex C or another bank reasonably acceptable to Designs.

(b) The "Termination Condition" shall mean that (i) O.M. shall have given the
Termination Notice to Designs and to Escrow Agent in accordance with the
provisions of this Section 2, (ii) O.M. shall have paid to Escrow Agent the
Termination Notice Fee and shall have delivered to Escrow Agent the O.M.
Surrender LC in accordance with the provisions hereof and (iii) either:

               (A) the debis  Mortgage  (as  hereinafter  defined) and any other
          mortgage encumbering the Premises  (collectively referred to herein as
          the  "Mortgage")  shall have been  satisfied in full (as  evidenced by
          either the filing of a  discharge  of the  Mortgage  with the  Norfolk
          Registry District of the Land Court or by the issuance by a nationally
          recognized title insurance  company of a title insurance policy (or an
          endorsement to O.M.'s existing title insurance  policy)  insuring that
          the lien of the Mortgage no longer encumbers title to the Premises,  a
          copy of which discharge or title policy (or title policy  endorsement)
          shall be  delivered  to Designs  simultaneously  with the  Termination
          Notice), or

               (B) the  holder  of the  Mortgage  shall  have  consented  to the
          termination  of the Existing  Lease and the  execution and delivery of
          the New Lease and shall have agreed in writing that the Existing  SNDA
          (as  hereinafter  defined) (in the case of the debis Mortgage) and any
          other  applicable   subordination,   non-disturbance   and  attornment
          agreement  executed  by the holder of any other  Mortgage  and Designs
          pursuant to the terms and  conditions of the Existing Lease (an "Other
          SNDA")  shall  apply to the New Lease  with the same  effect as it had
          applied to the Existing Lease.

(c) Upon satisfaction of the Termination Condition at any time on or prior to
the Outside Exercise Date, the Existing Lease shall terminate on the tenth
(10th) day after the satisfaction of the Termination Condition (the "Termination
Date"), as if the originally scheduled expiration date of the Existing Lease
were the Termination Date.

3. Initial Design Payment Condition. Designs shall be entitled to receipt of the
Termination Notice Fee immediately upon its providing to Escrow Agent two (2)
original counterpart executed copies of the "Confirmatory Acknowledgement of
Termination" in the form of Annex D hereto with changes to reflect appropriate
dates and a letter of credit in the amount of Four Million Four Hundred Thousand
($4,400,000) Dollars (the "Designs Security LC") substantially in the form of
Annex E hereto (or other form reasonably acceptable to O.M.) (collectively, the
"Initial Designs Payment Condition"), but the failure of Designs to satisfy the
Initial Designs Payments Condition shall not affect the validity of the
Termination Notice, it being expressly agreed that the Existing Lease shall
automatically and without further action terminate on the Termination Date upon
O.M.'s satisfaction of the Termination Condition on or prior to the Outside
Exercise Date. The Designs Security LC shall be issued by the bank identified in
Annex E or another bank reasonably acceptable to O.M.

4.       Continuing Obligations Under Existing Lease.

(a) Except as provided in this Agreement, if O.M. exercises the Termination
Option, then, effective as of the Termination Date, neither O.M. or Designs
shall have any liability or obligation to the other under or with respect to the
Existing Lease, all of which obligations and liabilities shall be deemed to be
terminated, extinguished and waived as of the Termination Date; provided,
however, that neither the foregoing provisions of this sentence nor any other
provision of this Agreement shall be deemed to terminate, extinguish or waive
the respective liabilities or obligations of O.M. and Designs under Section 7.10
of the Existing Lease (but only in respect of third party (i.e. not the parties
hereto) tort claims made against the applicable indemnified party for bodily
injury, death or property damage to persons or entities, but specifically
excluding any claims with respect to Environmental Matters, as defined below),
which obligations and liabilities shall survive the termination of the Existing
Lease. Without limiting the foregoing, if O.M. exercises the Termination Option
in accordance with the terms hereof:

               (i)  The rights and  obligations  of Designs  with respect to the
                    removal of FF&E,  alterations and improvements  from the New
                    Lease Premises  (hereafter defined) shall be governed by the
                    terms of the New Lease (hereafter defined);

               (ii) Designs  shall have no  obligation  to remove,  or cause any
                    subtenant or other  occupant of the Premises to remove,  any
                    FF&E,  alterations,  improvements or other property from any
                    portion of the Premises other than the New Lease Premises or
                    to vacate any such other portion of the Premises  (provided,
                    however,  that  neither  the  foregoing  provisions  of this
                    clause (ii) nor any other  provision  hereof  shall grant or
                    confer,  or be deemed to grant or  confer,  any right to any
                    subtenant or other  occupant to use or occupy any portion of
                    the Premises except as expressly  provided in the respective
                    Occupancy Agreements);

               (iii)The  provisions of Section 7.13 of the Existing  Lease shall
                    be of no force or  effect  from and  after  the  Termination
                    Date;

               (iv) The  provisions of Section 11 of the Existing Lease shall be
                    of no force or effect from and after the  Termination  Date,
                    it being  understood  and agreed that Designs'  occupancy of
                    the New Lease  Premises  shall be governed by the New Lease,
                    and  to  the  extent  specifically   provided  herein,  this
                    Agreement, from and after the Termination Date; and

               (v)  Subject  to the  terms and  provisions  of the New Lease and
                    Section  II  (4)(c)  below,   Designs  shall  not  have  any
                    liability  or   obligation  to  O.M.  with  respect  to  the
                    condition of the Premises as of the Termination Date.

(b) Promptly after termination of the Existing Lease, O.M. and Designs shall
prorate, as of 11:59 p.m. on the day immediately preceding the Termination Date,
all Fixed Rent and Additional Rent under the Existing Lease which has been paid
in advance or is in arrears, and a balancing payment shall be made by or to
Designs, as the case requires, within ten days of O.M. providing to Designs a
reconciliation of the same. Without limiting the foregoing or any other
provision hereof, all income and other amounts payable under any Occupancy
Agreement (less an amount equal to $5.30 per square foot per annum of the
applicable sublease premises calculated on a per diem basis to the extent of any
prepaid operating expenses and taxes) that are attributable to the period from
and after the Termination Date shall belong to O.M. and all prepaid rents and
other charges (less an amount equal to $5.30 per square foot per annum of the
applicable sublease premises calculated on a per diem basis to the extent of any
prepaid operating expenses and taxes) under the Occupancy Agreements for the
period from and after the Termination Date shall be duly accounted for
simultaneously with the foregoing balancing payment (to the extent not already
paid to O.M.).

(c) Notwithstanding any provision of the Existing Lease or New Lease to the
contrary, if O.M. exercises its Termination Option, Designs shall not be liable
in any way for, and O.M. shall not exercise any rights or remedies against
Designs as a result of, and OM hereby releases, waives and agrees to make no
claim against Designs in connection with, any actual or alleged breach of any
representation, warranty, agreement or covenant set forth in the Existing Lease
or New Lease, or otherwise with respect to oil, chemicals, toxic substances,
hazardous waste or materials or other environmental matters (collectively,
"Environmental Matters") except to the extent that:

               (i)  (A)  such  breach  was  caused  by  Designs  or  any  of its
                    contractors, agents or employees, and (B) O.M. gives written
                    notice to Designs of any  applicable  claim  within five (5)
                    business days after the earlier of the Surrender Date or the
                    date that O.M. actually commences Material Construction Work
                    (as defined below),  and O.M. commences suit with respect to
                    such claim  within  twelve (12) months  after the earlier of
                    the Surrender Date or the date that O.M. actually  commences
                    Material Construction Work, or

               (ii) such breach is the result of the gross negligence or willful
                    misconduct  of  Designs or any of its  employees,  agents or
                    contractors.

The burden of proof in any action or proceeding under this Section 4 shall be
upon O.M. As used herein, the term "Material Construction Work" shall mean
demolition, excavation or construction work commenced by, or at the direction
of, O.M. in connection with the Land and/or the Building; provided, however,
that Material Construction Work shall not be deemed to mean or include
demolition or construction activity customarily associated with the fit up of
tenant space or remodeling of common areas, or ordinary and customary
maintenance and repairs of the Building or the Land. Notwithstanding any
provision hereof or the New Lease to the contrary, O.M. shall not have the right
to offset any amounts due or alleged to be due from Designs under this Section
against the Early Termination Fee. For purposes of clarification, nothing
contained herein shall be deemed to constitute or create any contractual
indemnification by O.M. of Designs with respect to any claim made by any
governmental authority or third party against Designs relating to any
Environmental Matter caused by Designs.

5. New Lease. As provided in the Escrow Agreement, immediately upon O.M.'s
satisfaction of the Termination Condition, Escrow Agent shall date the New Lease
as of the Termination Date and release from escrow to O.M. and Designs the lease
of a portion of the Building described on Annex F attached hereto (the "New
Lease Premises") in the form of Annex G hereto which is to be entered into
simultaneously with the execution of this Agreement by O.M. and Designs (the
"New Lease"). O.M. hereby covenants that it shall not intentionally interfere
(nor shall its affiliates that it controls intentionally interfere) with any
effort or attempt by Designs to vacate or yield up the Premises demised under
the New Lease. If O.M. shall not exercise the Termination Option in accordance
with the terms hereof on or before the Outside Exercise Date, then promptly
thereafter Escrow Agent shall destroy all counterparts of the New Lease
deposited with it and this Agreement shall be of no further force or effect. In
the event of any conflict between the provisions of the New Lease and the
provisions of this Agreement, this Agreement shall govern.

6.       Early Termination Fee; Surrender Fee.

(a) Subject to the provisions of Sections II(6)(b) and (c) below, O.M. agrees
that if the Surrender Condition (hereafter defined) is satisfied by the Required
Surrender Date (hereafter defined), O.M. shall pay to Designs an "Early
Termination Fee" of Eight Million Nine Hundred Thousand ($8,900,000) Dollars,
consisting of the sum of the Termination Notice Fee (payable at the time the
Termination Condition is satisfied, as provided in Section II2 above) and an
additional sum of Four Million Five Hundred Thousand ($4,500,000) Dollars (the
"Surrender Fee"), payable to Designs on the date upon which the Surrender
Condition is satisfied in the form of a certified or bank check, or by wire
transfer in immediately available funds. The Early Termination Fee shall be in
addition to the Consideration Payment payable at the time of execution of this
Agreement. The "Surrender Condition" shall mean that the New Lease Premises
shall be free and clear of all tenants and occupants claiming by, through, or
under Designs (including, without limitation, Designs), and Designs shall have
given notice to O.M. in the form of Annex H attached hereto. The Surrender
Condition shall be considered to be satisfied regardless of whether Designs
abandons or removes its personal property from the New Lease Premises. The
"Required Surrender Date" shall mean the date on which the New Lease is
terminated or the Term thereof expires.

(b) Within five (5) business days after the date of satisfaction of the
Surrender Condition (the "Surrender Date"), O.M. shall have the right to (X)
cause the New Lease Premises to be inspected by a property inspector listed on
Annex I attached hereto and incorporated herein by this reference or another
property inspector reasonably satisfactory to O.M. and Designs (a "Property
Inspector") and (Y) to cause such Property Inspector, within such five (5)
business day period, to issue a report to O.M., Designs and Escrow Agent setting
forth such Property Inspector's determination as to whether there is Material
Damage (as hereinafter defined) to the New Lease Premises, and, if so, the cost,
as reasonably estimated by the Property Inspector, to repair or restore the New
Lease Premises as a result of such Material Damage (which cost shall be deducted
from the Early Termination Fee). If O.M. exercises its Termination Option, the
right to cause such inspection to be performed, the issuance of such report
within such five (5) business day period and the deduction of such amount (if
any) from the Early Termination Fee shall be O.M.'s sole and exclusive remedy at
law or in equity against Designs for the physical condition of the New Lease
Premises. If the Property Inspector shall not inspect the New Lease Premises and
issue such report within such five (5) business day period, then O.M. shall be
deemed to have waived its sole and exclusive remedy. As used herein, the term
"Material Damage" shall mean and refer to any damage to:

                           (A)      the interior of the New Lease Premises
                                    occurring during the term of the New Lease
                                    which exceeds the damage which would be
                                    reasonably expected to occur as a result of
                                    (i) normal wear and tear in connection with
                                    Designs' use of the New Lease Premises
                                    during the term of the New Lease, or (ii)
                                    vacating the New Lease Premises and removing
                                    Designs' personal property or the Enumerated
                                    FF&E therefrom in accordance with
                                    commercially reasonable custom and practice
                                    and

                           (B)      any other portion of the Building
                                    (including, without limitation, the roof)
                                    caused by the removal of any of the
                                    Enumerated Property.

Within ten (10) days after the exercise date of the Termination Option, but in
any event, on at least two (2) business days' prior notice to Designs, O.M.
shall cause such Property Inspector to inspect the New Lease Premises for the
purpose of determining the physical condition thereof. Material Damage shall not
be deemed to include any damage to the physical condition of the New Lease
Premises existing as of the date of such inspection. The foregoing provisions of
this paragraph (b) shall not be deemed to limit, impair or expand the rights and
remedies of O.M. with respect to the environmental condition of the New Lease
Premises, which shall be governed exclusively by the provisions of Section II
(4)(c) hereof and the provisions of the New Lease.

(c) O.M. and Designs agree that if Designs does not satisfy the Surrender
Condition on or prior to the Required Surrender Date, but Designs satisfies the
Surrender Condition prior to the date which is thirty (30) days after the
Required Surrender Date (the "Outside Surrender Date"), a portion of the
Surrender Fee shall be payable to Designs on the date upon which it satisfies
the Surrender Condition, such portion to be calculated by reducing the Surrender
Fee by One Hundred Fifty Thousand ($150,000) Dollars for each day after the
Required Surrender Date that the Surrender Condition is not satisfied; provided,
however, that the date of commencement for such reduction of Surrender Fee shall
be subject to extension for Force Majeure but not to a date later than the date
which is fourteen (14) days after the Required Surrender Date. As used herein,
the term "Force Majeure" shall mean any or all of the following: strikes;
lock-outs; labor troubles; accidents; interference by O.M.; governmental
restriction, preemption, regulation or control; mechanical breakdown; inability
to obtain labor, fuel, steam, water, electricity or materials; acts of God;
enemy action; civil commotion; or fire or other casualty; provided, however,
that:

               (i)  Force Majeure shall not be deemed to mean or include lack of
                    funds; and

               (ii) no  event  of  Force  Majeure  shall  extend  the  time  for
                    commencement  of reduction of the Surrender Fee as set forth
                    above  to the  extent  that  Designs  could  have  exercised
                    commercially  reasonable  efforts to mitigate the applicable
                    delay and failed to do so; and

               (iii)Designs  shall  endeavor  to give  notice to O.M. as soon as
                    reasonably  practicable  after obtaining actual knowledge of
                    the  occurrence  of any event of Force Majeure which Designs
                    reasonably  believes  may delay the  surrender of the Leased
                    Premises beyond the Required  Surrender Date;  provided that
                    Designs'  failure to give any such  notice  shall not in any
                    manner affect Designs' rights under the proviso contained in
                    the first sentence of this Paragraph 6(c).

Designs hereby covenants to use commercially reasonable efforts to mitigate any
delay resulting from any Force Majeure event which actually occurs. In no event
shall the Outside Surrender Date be extended as a result of Force Majeure or for
any other reason whatsoever. Subject to the provisions of Section II (6)(d)
hereof, no reduction of the Surrender Fee under this subsection shall effect
Design's right to retain the Termination Notice Fee. If O.M. exercises its
Termination Option, O.M.'s right to a reduction of the Surrender Fee under this
Section II (6)(c) and to repayment of the balance of the Early Termination Fee
under Section II (6)(d) hereof, and O.M.'s rights and remedies under the New
Lease, shall constitute O.M.'s sole and exclusive rights and remedies, at law or
in equity, in connection with any failure of Designs to vacate, surrender and
abandon the New Lease Premises on or before the Required Surrender Date.

(d) Without limiting the provisions of the foregoing clause (c), if the
Surrender Condition is not satisfied by the Outside Surrender Date, Designs
shall not be entitled to any portion of the Early Termination Fee, and Designs
shall repay to O.M. the entire Termination Notice Fee. If Designs shall not
satisfy the Surrender Condition on or prior to the Outside Surrender Date and
Designs shall not repay to O.M. the Termination Notice Fee on or before the
Outside Surrender Date, then O.M. shall be entitled to require Escrow Agent to
(x) if Escrow Agent shall not have theretofore drawn down the Designs Security
LC, draw down the Designs Security LC and pay to O.M., by a certified, bank
check or wire transfer of immediately available funds, the proceeds of the
Designs Security LC (i.e. funds in the amount of the Termination Notice Fee), or
(y) if Escrow Agent shall have therefore drawn down the Designs Security LC, pay
to O.M., by a certified, bank check or wire transfer of immediately available
funds, such portion of the proceeds of the Designs Security LC. If the Surrender
Condition is satisfied on or before the Outside Surrender Date, or the Surrender
Condition is not satisfied by the Outside Surrender Date but Designs has repaid
to O.M. the entire Termination Notice Fee on or before the Outside Surrender
Date, then, in either case, the Escrow Agent shall return the Designs Security
LC to Designs upon demand by Designs.

(e) If Designs satisfies the Surrender Condition on or before the Outside
Surrender Date, and O.M. fails or refuses to pay the Surrender Fee or so much
thereof as is due to Designs in accordance with the terms hereof, then Designs
shall be entitled to require Escrow Agent to (x) if Escrow Agent shall not have
theretofore drawn down the O.M. Surrender LC, draw down the O.M. Surrender LC
and pay to Designs, by a certified, bank check or wire transfer of immediately
available funds, so much of the proceeds thereof (i.e. funds in the amount of
the Surrender Fee) as is due to Designs in accordance with the terms hereof or
(y) if Escrow Agent shall have therefore drawn down the O.M. Surrender LC, pay
to Designs, by a certified, bank check or wire transfer of immediately available
funds, the Surrender Fee (or so much thereof as is due to Designs in accordance
with the terms hereof). If the Surrender Condition is not satisfied on or before
the Outside Surrender Date, or the Surrender Condition is satisfied by the
Outside Surrender Date and O.M. has paid to Designs the Surrender Fee (or so
much thereof as is due to Designs in accordance with the terms hereof), then, in
either case, the Escrow Agent shall return the O.M. Surrender LC to O.M.
promptly upon demand by O.M..

(f) Effective immediately upon the date of satisfaction of Surrender Condition,
Designs hereby conveys, transfers and sells to O.M. all of Design's rights,
title and interest in, to and under any FF&E, alterations, improvements and
personal property of Designs or any party claiming by, through or under Designs
remaining at the Premises all of which shall be deemed to have been abandoned by
Designs. The foregoing conveyance, transfer and sale shall be effective
automatically as of the Surrender Date without the need for any further action
by Designs. Without limiting the foregoing, Designs hereby agrees to execute
such documents, instruments and agreements as O.M. may reasonably request to
ratify and confirm such conveyance, transfer and sale.

III.     OTHER AGREEMENTS; MISCELLANEOUS

1. This Agreement, which may be executed in counterpart copies, any of which
shall constitute a single original, shall be governed by Massachusetts law. O.M.
and Designs each hereby consent to jurisdiction of the courts of the
Commonwealth of Massachusetts in connection with any dispute relating to this
Agreement, the Escrow Agreement, the Existing Lease or the New Lease. This
Agreement shall be binding on and inure to the benefit of O.M. and Designs, and
their respective successors and assigns; provided, however, that O.M. shall not
assign this Agreement, or its interests, rights or obligations hereunder, to any
person or entity other than a transferee of O.M.'s interest in the Land and the
Building (including, without limitation, any transferee by reason of any sale,
foreclosure, deed in lieu of foreclosure, merger, consolidation or ground
lease). Any successor or assignee of O.M. with respect to O.M.'s interest,
rights or obligations in this Agreement shall agree directly with Designs by
written instrument in form and substance reasonably satisfactory to O.M. and
Designs, to be bound by all of the obligations of O.M. under this Agreement, the
Escrow Agreement, the Existing Lease and, if the Termination Option is exercised
by O.M. in accordance with the terms hereof, the New Lease. Without limiting the
provisions of the immediately foregoing sentence, in the event of any assignment
of O.M.'s interest, rights and obligations hereunder to any ground lessee, the
owner of the fee interest in the Land and the Building shall join such
instrument to evidence that it shall be jointly and severally liable with the
ground lessee for the obligations of O.M. hereunder. Nothing herein contained
shall be deemed to limit or impair the right of any member of O.M. to sell or
transfer any or all of its membership interests in O.M. to any other person or
entity. Notwithstanding the foregoing, Designs may not assign its interest,
rights or obligations in this Agreement without the consent of O.M., which
consent may be withheld in the sole discretion of O.M; provided, however, that
the foregoing provisions of this sentence shall not apply to, and O.M.'s consent
shall not be required with respect to, any assignment by Designs of its
interest, rights or obligations in this Agreement to any entity into or with
which Designs is merged or consolidated or to which substantially all of
Designs' assets are transferred, provided that (i) the successor to Designs has
a net worth computed in accordance with generally-accepted accounting principles
which is reasonably commensurate with, and sufficient to meet, the financial
obligations of Designs hereunder, (ii) proof reasonably satisfactory to O.M. of
such net worth shall have been delivered by Designs to O.M. at least ten (10)
days prior to the effective date of any such transaction, and (iii) the assignee
agrees directly with O.M., by written instrument in form and substance
reasonably satisfactory to Designs, to be bound by all of the obligations of
Designs under this Agreement, the Existing Lease and, if the Termination Option
is exercised by O.M. in accordance with the terms hereof, the New Lease,
including, without limitation, the covenant against further assignment.

2. Subject to the provisions of Section III (5)(B) below, during the term of the
Existing Lease and during the term of the New Lease, Designs agrees that it will
not make any assignment thereof or enter into any Occupancy Agreement or modify
or amend any existing Occupancy Agreement, and Designs further agrees that,
notwithstanding anything to the contrary in the Existing Lease or the New Lease,
O.M. may withhold its consent to any request for consent to any assignment
thereunder or to any Occupancy Agreement or modification or amendment of any
existing Occupancy Agreement in its sole discretion. Nothing herein contained
shall be deemed to limit or impair the right of any shareholder of Designs to
sell or transfer any or all of its stock in Designs. For the purposes of this
Agreement, the term "assignment" shall exclude the merger or consolidation of
Designs with or into, or the transfer of substantially all of Designs' assets
to, any other entity and the assignment of the Existing Lease or the New Lease
to any such entity (provided that (i) the successor entity has a net worth
computed in accordance with generally-accepted accounting principles which is
reasonably commensurate with, and sufficient to meet, the financial obligations
of Designs under this Agreement, the Existing Lease and the New Lease, (ii)
proof reasonably satisfactory to O.M. of such net worth shall have been
delivered to O.M. at least ten (10) days prior to the effective date of any such
merger or consolidation, and (iii) the successor entity agrees directly with
O.M., by written instrument in form and substance reasonably satisfactory to
O.M. to be bound by all of the obligations of Designs under this Agreement, the
Existing Lease and the New Lease, as the case may be, including, without
limitation, the covenant against further assignment hereunder. This Paragraph
shall be null and void and of no force or effect if O.M. shall fail to exercise
the Termination Option in accordance with the terms hereof on or before the
Outside Exercise Date.

3. Simultaneous with the execution hereof, Designs shall provide to O.M. a
Clerk's or Secretary's Certificate of Vote certifying that the Board of
Directors of Designs has authorized the execution and delivery of this
Agreement, and all additional documentation contemplated pursuant thereto, by
Resolutions of the Board of Directors which remain in full force and effect, and
have authorized the signatories to this Agreement to enter into all such
documentation on behalf of Designs. Simultaneous with the execution hereof, O.M.
shall provide to Designs a member's certificate of vote certifying that the sole
member of O.M. has authorized the execution and delivery of this Agreement, and
all additional documentation contemplated pursuant thereto, by resolutions which
remain in force and effect, and has authorized the signatory to this Agreement
to enter into all such documentation on behalf of O.M.

4. Subject to the provisions of Section III (13) below, during the term of this
Agreement and during the term of the New Lease, if any, O.M., its agents and
representatives, shall be entitled to enter into discussions and negotiations
with existing subtenants under the Occupancy Agreement regarding, among other
things, the termination of subleases resulting from the termination of the
Existing Lease. Subject to the provisions of Section III(13) below, such
discussions and negotiations may include disclosure of the existence, nature and
effect of this Agreement, or portions thereof, but not the financial terms
hereof or provisions of Section III(6) below. Further, in the event that O.M.
and any subtenant reach any agreement regarding any sublease which requires the
action or consent of Designs, Designs will not unreasonably withhold its consent
to such action or consent, provided, however, that the foregoing shall not
obligate Designs to expend any sums, or forego any revenue, incur any obligation
or liability, or otherwise decrease Design's rights or increase its obligations
under any Occupancy Agreement or any other document or agreement.

5. Designs represents and warrants to O.M. as follows:

     A. The only subleases,  licenses,  occupancy agreements or other agreements
or  instruments  pursuant  to which any person or entity has the right to occupy
the Premises  demised under the Existing  Lease which were executed or consented
to by Designs, or of which Designs has knowledge ("Occupancy  Agreements"),  are
as follows:

     (i)  Agreement of Sublease dated as of March 3, 1998 by and between Designs
          and ZD Comdex & Forms, Inc. (now Key3Media Events,  Inc.) (the "Comdex
          Sublease");

     (ii) Agreement of Sublease by and between Designs and Atreve Software, Inc.
          dated as of July 1,  1998,  the  successor  subtenant  under  which is
          Inktomi  Corporation,  as amended by First Amendment to Sublease dated
          as of September 11, 2000 (the "Inktomi Sublease"); and

     (iii)Agreement  of Sublease  (the "Xyan  Sublease")  dated as of August 10,
          2000 by and between  Designs and Xyan.com,  Inc.  ("Xyan"),  including
          that certain letter dated September 11, 2000.

     B. The consent of O.M.  shall not be required for Designs to terminate  any
Occupancy  Agreement  This  Paragraph  shall be null and void and of no force or
effect if O.M. shall fail to exercise the Termination  Option in accordance with
the terms hereof on or before the Outside Exercise Date.

     C. Designs has delivered true, correct and complete copies of the foregoing
Occupancy  Agreements to O.M., and the same have not been amended,  orally or in
writing.

6. O.M. shall defend, with counsel reasonably acceptable to Designs, save
harmless, and indemnify Designs and all agents, directors, employees, officers
and shareholders of Designs (Designs and all such other parties being referred
to herein collectively as the "Indemnified Parties") from any and all
liabilities, claims, actions, suits, obligations, damages, proceedings, expenses
and costs (including, without implied limitation, reasonable counsel fees and
disbursements) which may be imposed upon, incurred by or asserted against any
Indemnified Party by, or for the benefit of, Xyan as a result of, by reason of,
or in any manner relating to, this Agreement, the New Lease and/or the
negotiation, execution, delivery and/or performance of this Agreement and/or the
New Lease by O.M. and/or Designs, including, without limitation, the exercise of
O.M.'s rights under Section III 4 hereof and/or the termination of the Xyan
Sublease.

7. Whenever any notice, approval, consent or request is given pursuant to this
Agreement, it shall be in writing. Communications, unless otherwise specified by
five (5) days' prior notice, shall be addressed to the parties addresses stated
in the header of this Agreement, with copies in the case of notices to O.M. to
Hale and Dorr LLP, 60 State Street, Boston, MA 02109, Attention: William R.
O'Reilly, Jr., Esq. and in the case of notice to Designs to Kenneth Cummins,
Esq., Designs, Inc. 66B Street, Needham, MA 02494 and Kramer, Levin Naftalis &
Frankel, LLP, 919 Third Avenue, New York, NY 10022-3852, Attention: Peter Smith,
Esq. Any communications so addressed shall be deemed duly served, (a) if mailed
by registered or certified mail, return receipt requested, postage prepaid upon
the earlier of (i) three (3) days after mailing within the Continental United
States, or (ii) receipt of same or refusal of delivery, (b) if delivered by
recognized overnight delivery service, upon the earlier of (i) one (1) business
day after deposit with such service, (ii) receipt of same, or (iii) refusal of
delivery, or (c) if delivered by hand, upon receipt of same or refusal of
delivery. Any party hereto may change its address for purposes of notices and
other communications by giving at least three (3) business days' prior notice to
the other party hereto as aforesaid.

8. No individual partner, member, trustee, stockholder, officer, director,
employee or beneficiary of O.M. or Designs shall be personally liable under this
Agreement. Designs shall look solely to O.M.'s interest in the Land and the
Building (as defined in the Existing Lease), including without limitation,
rents, income, profits and insurance related to the Land and the Building, but
not upon other assets of O.M. not related to the Land or Building, except in the
case of fraud or misapplication or funds, and to other security provided
pursuant to the terms hereof and the Escrow Agreement, in pursuit of its
remedies upon a default by O.M. hereunder, the general assets of the individual
partners, members, trustees, stockholders, officers, employees or beneficiaries
of O.M. and Designs shall not be subject to levy, execution or other enforcement
procedure for the satisfaction of the remedies of O.M. or Designs; provided that
the foregoing provisions of this sentence shall not constitute a waiver of any
obligation evidenced by this Agreement and provided further that the foregoing
provisions of this sentence shall not limit the right of either party to name
the other or any individual partner, member or trustee thereof as party
defendant in any action or suit in connection with this Agreement so long as no
personal money judgment shall be asked for or taken against any individual
partner, member, trustee, stockholder, officer, employee or beneficiary of O.M.
or Designs.

9. No consent or waiver, express or implied, by either party to or of any breach
of any agreement or duty shall be construed as a waiver or consent to or of any
other breach of the same or any other agreement or duty.

10. O.M. and Designs each hereby represents and warrants to the other that it
has not had any dealings with any broker in connection with the transaction
contemplated herein, and that it knows of no broker or agent who is entitled to
a commission in connection with the transactions contemplated herein. Each party
hereby agrees to indemnify, defend and hold the other harmless from and against
any all claims, demands, losses, liabilities, lawsuits, judgments, costs and
expenses (including, without limitation, reasonable attorneys' fees and
disbursements) with respect to any breach by such party of its representations
and warranties set forth in this Paragraph.

11. O.M. hereby represents and warrants that there is no mortgage encumbering
the Land and/or the Building in force or effect as of the date hereof other than
that certain mortgage held by debis Financial Services, Inc. ("debis") dated as
of March 17, 1999, filed for registration with the Norfolk Registry of District
of the Land Court as Document No. _________ on Certificate of Title No. ________
(the "debis Mortgage"), (ii) there is no ground lease encumbering the Land or
the Building in force or effect as of the date hereof, and (iii) that certain
Subordination, Nondisturbance and Attornment Agreement dated May 16, 1996 and
filed for registration with the Norfolk Registry District of the Land Court as
Document No. 738474, by and between Grove Bank and Designs, is no longer in
force or effect.

12. If any term, provision or condition contained in this Agreement shall, to
any extent, be invalid or unenforceable, the remainder of this Agreement, or the
application of such term, provision or condition, to persons or circumstances
other than those with respect to which it is invalid or unenforceable, shall not
be affected thereby and each and every other term, provision and condition of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.

13. Confidentiality. Each party hereto agrees to maintain the confidentiality of
the financial and other material terms and conditions of this Agreement, other
than information that is available from public sources other than as a result of
such party's actions. Either party may, however, disclose any of such
information to its agents, directors, officers, employees, advisors, attorneys,
affiliates or representatives who require such information for the purpose of
performing or assisting in the performance of its obligations or services
hereunder, and to investors or lenders or proposed investors or lenders in or to
such party, and to purchasers or proposed purchasers of the Premises, provided
that in all such cases such parties shall be informed of, and agree (orally or
in writing) to abide by, the confidential nature of such information. In
addition, (i) Designs, as a public company, may disclose material terms and
conditions of this Agreement in a Form 8-K and/or other filings with the SEC
and/or by press release following the execution hereof, and (ii) either party
hereto may also disclose any such information (x) to the extent required by law,
regulation (including SEC regulations) or court order provided that such party
shall have first, to the extent reasonably practicable, advised the other of the
requirement to disclose such information and shall have afforded the other an
opportunity to dispute such requirement and seek relief therefrom by legal
process (each party hereby agreeing to cooperate, upon written request made by
the other party, with the other party in good faith to promptly respond to any
such notice of advice as to disclosure required by any applicable law,
regulation or court order), (y) in connection with any suit, action, arbitration
or other proceedings between the parties hereto or their respective related
parties, or (z) to the extent required in connection with the preparation or
filing of any tax returns or other filings required by applicable law.
Notwithstanding the foregoing or any other provision hereof to the contrary, (i)
O.M. shall have the right to inform subtenants and other occupants of the
Building, purchasers or proposed purchasers of the Premises, lenders or
investors or proposed lenders or investors to or in O.M., brokers, attorneys for
O.M., building departmental and other comparable governmental officials and such
other persons or entities as O.M. may reasonably deem appropriate or necessary,
that O.M. and Designs have entered into an agreement pursuant to which O.M. has
the right to terminate the Existing Lease and recapture the Premises in
accordance with the time periods herein set forth (provided, that, except as
permitted above in this Section 13, O.M. shall not disclose the financial terms
or other material terms or conditions of this Agreement to any such person or
entity), and (ii) neither party shall be liable to the other for any disclosure
of any information by any other person or entity which obtained such information
from a party hereto in accordance with the terms and conditions of this Section.

14. No obligation or right of any party hereto under this Agreement or any
provision of this Agreement shall grant or confer, or be deemed to grant or
confer, any rights or benefits to any person which is not a party hereto.

15. This Agreement may be executed in counterparts, all of which executed
counterparts shall be considered the same agreement, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended to,
any other counterpart.

                      [This Space Intentionally Left Blank]

<PAGE>

         EXECUTED under seal as of the date written above.

                                            O.M. 66 B STREET, LLC, a Delaware
                                            limited liability company

                                            By:    O.M. Needham Holding Company,
                                            LLC, a Delaware limited liability
                                            company, its Sole Member

                                            By:    /S/ MARSHALL FIELD
                                            Name:  Marshall Field V
                                            Title: President

                                            DESIGNS, INC.

                                            By:    /S/ DAVID A. LEVIN
                                            Name:  DAVID A. LEVIN
                                                   President

                                             By:    /S/ DENNIS R. HERNREICH
                                             Name:  DENNIS HERNREICH
                                                    Treasurer

List of Attachments

Annex A - Termination Notice
Annex B - Escrow Agreement
Annex C - O.M. Surrender LC
Annex D - Confirmatory Acknowledgement of Termination
Annex E - Designs Security LC
Annex F - Description of New Lease Premises
Annex G - New Lease
Annex H - Surrender Notice
Annex I - List of Approved Property Inspectors

- h:\boulger_sean\legal\109167131\agmt_re_leases\11_01_00.docEXHIBIT

<PAGE>

                   STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,

                                     SELLER

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,

                                     TRUSTEE

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

                         POOLING AND SERVICING AGREEMENT

                          Dated as of November 1, 2000

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

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

                                  Series 2000-2

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
                                                     ARTICLE I

                                                    Definitions

                                                    ARTICLE II

                                           Conveyance of Mortgage Loans;
                                         Original Issuance of Certificates

         Section 2.01.     CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE.............................................II-1
         Section 2.02.     ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE.............................................II-3
         Section 2.03.     ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE AGREEMENT......................II-4
         Section 2.04.     SUBSTITUTION OF MORTGAGE LOANS......................................................II-5
         Section 2.05.     ISSUANCE OF CERTIFICATES............................................................II-6
         Section 2.06.     REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER................................II-6

                                                    ARTICLE III

                                  Administration and Servicing of Mortgage Loans

         Section 3.01.     MASTER SERVICER....................................................................III-1
         Section 3.02.     REMIC-RELATED COVENANTS............................................................III-1
         Section 3.03.     REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION..............................III-2
         Section 3.04.     UCC................................................................................III-2

                                                    ARTICLE IV

                                                     Accounts

         Section 4.01.     CERTIFICATE ACCOUNT.................................................................IV-1
         Section 4.02.     PERMITTED WITHDRAWALS AND TRANSFERS FROM THE CERTIFICATE ACCOUNT....................IV-2

                                                     ARTICLE V

                                                   Certificates

         Section 5.01.     CERTIFICATES.........................................................................V-1
         Section 5.02.     REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES................................V-4
         Section 5.03.     MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES....................................V-8
         Section 5.04.     PERSONS DEEMED OWNERS................................................................V-8
         Section 5.05.     TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES.......................................V-8
         Section 5.06.     RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES......................................V-9

                                       -i-

<PAGE>

         Section 5.07.     ERISA RESTRICTIONS..................................................................V-10
         Section 5.08.     RULE 144A INFORMATION...............................................................V-11

                                                    ARTICLE VI

                                          Payments to Certificateholders

         Section 6.01.     DISTRIBUTIONS ON THE CERTIFICATES...................................................VI-1
         Section 6.02.     ALLOCATION OF DEFERRED INTEREST.....................................................VI-2
         Section 6.03.     ALLOCATION OF LOSSES................................................................VI-3
         Section 6.04.     PAYMENTS............................................................................VI-4
         Section 6.05.     STATEMENTS TO CERTIFICATEHOLDERS....................................................VI-5
         Section 6.06.     MONTHLY ADVANCES....................................................................VI-7
         Section 6.07.     PREPAYMENT CHARGES..................................................................VI-7

                                                    ARTICLE VII

                                                  Indemnification

         Section 7.01.     INDEMNIFICATION OF THE TRUSTEE.....................................................VII-1

                                                   ARTICLE VIII

                                                      Default

         Section 8.01.     EVENTS OF DEFAULT.................................................................VIII-1
         Section 8.02.     TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR..........................................VIII-1
         Section 8.03.     NOTIFICATION TO CERTIFICATEHOLDERS................................................VIII-2
         Section 8.04.     WAIVER OF DEFAULTS................................................................VIII-2
         Section 8.05.     LIST OF CERTIFICATEHOLDERS........................................................VIII-2

                                                    ARTICLE IX

                                              Concerning the Trustee

         Section 9.01.     DUTIES OF TRUSTEE...................................................................IX-1
         Section 9.02.     CERTAIN MATTERS AFFECTING THE TRUSTEE...............................................IX-2
         Section 9.03.     TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS...............................IX-4
         Section 9.04.     TRUSTEE MAY OWN CERTIFICATES........................................................IX-4
         Section 9.05.     TRUSTEE'S FEES AND EXPENSES.........................................................IX-5
         Section 9.06.     ELIGIBILITY REQUIREMENTS FOR TRUSTEE................................................IX-5
         Section 9.07.     INSURANCE...........................................................................IX-5
         Section 9.08.     RESIGNATION AND REMOVAL OF THE TRUSTEE..............................................IX-5
         Section 9.09.     SUCCESSOR TRUSTEE...................................................................IX-6
         Section 9.10.     MERGER OR CONSOLIDATION OF TRUSTEE..................................................IX-7
         Section 9.11.     APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.......................................IX-7

                                      -ii-

<PAGE>

         Section 9.12.     FEDERAL INFORMATION RETURNS AND REPORTS TO CERTIFICATEHOLDERS; REMIC
                           ADMINISTRATION......................................................................IX-8

                                                     ARTICLE X

                                                    Termination

         Section 10.01.    TERMINATION UPON REPURCHASE BY THE SELLER OR ITS DESIGNEE OR LIQUIDATION OF THE
                           MORTGAGE LOANS......................................................................X-1
         Section 10.02.    ADDITIONAL TERMINATION REQUIREMENTS..................................................X-3

                                                    ARTICLE XI

                                             Miscellaneous Provisions

         Section 11.01.    INTENT OF PARTIES...................................................................XI-1
         Section 11.02.    AMENDMENT...........................................................................XI-1
         Section 11.03.    RECORDATION OF AGREEMENT............................................................XI-2
         Section 11.04.    LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS..........................................XI-2
         Section 11.06.    GOVERNING LAW.......................................................................XI-4
         Section 11.07.    NOTICES.............................................................................XI-4
         Section 11.08.    SEVERABILITY OF PROVISIONS..........................................................XI-4
         Section 11.09.    SUCCESSORS AND ASSIGNS..............................................................XI-4
         Section 11.10.    ARTICLE AND SECTION HEADINGS........................................................XI-4
         Section 11.11.    COUNTERPARTS........................................................................XI-4
         Section 11.12.    NOTICE TO RATING AGENCIES...........................................................XI-4
</TABLE>

                                      -iii-

<PAGE>

                                    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 A-4       -        Form of Class XP Certificates
Exhibit B         -        Mortgage Loan Schedule
Exhibit C         -        Representations and Warranties of EMC Concerning
                              the Mortgage Loans
Exhibit D         -        Request for Release of Documents
Exhibit E         -        Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1       -        Form of Investment Letter
Exhibit F-1       -        Form of Rule 144A and Related Matters Certificate
Exhibit G         -        Form of Initial Certification
Exhibit H         -        Form of Final Certification
Exhibit I         -        First Republic Servicing Agreements

                                      -iv-

<PAGE>

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

         Pooling and Servicing Agreement dated as of November 1, 2000, among
Structured Asset Mortgage Investments Inc., a Delaware corporation, as the
seller (the "Seller") and Wells Fargo Bank Minnesota, National Association, a
national banking association, not in its individual capacity but solely as
trustee (the "Trustee").

                              PRELIMINARY STATEMENT

         On or prior to the Closing Date, the Seller has acquired the Mortgage
Loans from EMC Mortgage Corporation ("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 in the Trust Fund to be treated for federal income tax purposes as a
REMIC. On the Startup Day, all the Classes of REMIC Regular Certificates will be
designated "regular interests" in the REMIC and the Class R Certificates will be
designated the "residual interests" in the 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 $238,202,708. 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:

                                       I-1

<PAGE>

                                    ARTICLE I

                                   Definitions

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

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

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

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

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

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

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

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

                                       I-2

<PAGE>

         Date, 0%; provided that if on a Distribution Date, the Current
         Principal Amount of any Class of Subordinate Certificates for which the
         related Class Prepayment Distribution Trigger was satisfied on such
         Distribution Date is reduced to zero, any amounts distributed pursuant
         to this clause (b), to the extent of such Class's remaining Allocable
         Share, shall be distributed to the remaining Classes of Subordinate
         Certificates which satisfy the related Class Prepayment Distribution
         Trigger and to the Class of Subordinate Certificates having the lowest
         numerical designation in reduction of their respective Current
         Principal Amounts in the order of their numerical Class designations.

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

         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 November 30, 2000, among EMC, the
Trustee and the Master Servicer.

         ASSUMED FINAL DISTRIBUTION DATE:  November 25, 2030.

         AVAILABLE FUNDS: With respect to any Distribution Date, an amount equal
to the aggregate of the following amounts with respect to the Mortgage Loans:
(a) all previously undistributed payments on account of principal (including the
principal portion of Scheduled Payments, Principal Prepayments and the principal
portion of Net Liquidation Proceeds) and 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 and (c)
any reimbursed amount in connection with losses on investments of deposits in an
account, except:

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

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

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

                                       I-3

<PAGE>

                  (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) amounts of Trustee's Fees for such Distribution Date and
         any expenses of the Trustee pursuant to Section 9.05.

         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 or California, or the
jurisdiction in which the Master Servicer is authorized or obligated by law or
executive order to be closed.

         CERTIFICATE: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the forms annexed hereto as Exhibits A-1, A-2, A-3 and
A-4, 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 "Wells Fargo
Bank Minnesota, National Association, as Trustee f/b/o holders of Structured
Asset Mortgage Investments Inc., Bear Stearns ARM Trust, Mortgage Pass-Through
Certificates, Series 2000-2 - Certificate Account."

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

         CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.

         CERTIFICATEHOLDER: A Holder of a Certificate.

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

         CLASS A CERTIFICATES: The Class A-1 Certificates and Class A-2
Certificates.

         CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Subordinate
Certificates for any Distribution Date, the Class Prepayment Distribution
Trigger is satisfied if the fraction (expressed as a percentage), the numerator
of which is the aggregate Current Principal Amount of such Class and each Class
of Subordinate Certificates subordinate thereto, if any, and the denominator of
which

                                       I-4

<PAGE>

is the Scheduled Principal Balance of all of the Mortgage Loans as of the
related Due Date, equals or exceeds such percentage calculated as of the Closing
Date.

         CLOSING DATE:  November 30, 2000.

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

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

         COOPERATIVE: A corporation that has been formed for the purpose of
cooperative apartment ownership.

         COOPERATIVE ASSETS: Shares issued by Cooperatives, the related Lease
and any other collateral securing the Cooperative Loans.

         COOPERATIVE BUILDING: The building and other property owned by a
Cooperative.

         COOPERATIVE LOAN: The indebtedness of a Mortgagor evidenced by a
Mortgage Note which is secured by Cooperative Assets and which is being sold to
the Purchaser pursuant to this Agreement, the Mortgage Loans so sold being
identified in the Final Mortgage Loan Schedule.

         COOPERATIVE UNIT: A specific dwelling unit in a Cooperative Building as
to which exclusive occupancy rights have been granted pursuant to a Lease.

         CORPORATE TRUST OFFICE: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55749.

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

         CURRENT PRINCIPAL AMOUNT: With respect to any Certificate as of any
Distribution Date, the initial principal amount of such Certificate, increased
by any Deferred Interest previously allocated to such Certificate (other than
the Class XP Certificates), 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 (other than the Class XP Certificates),
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, the Current Principal Amount
thereof will equal the sum of the Current Principal Amounts of all Certificates
in such Class. Notwithstanding the foregoing, solely for purposes of giving
consents, directions, waivers, approvals, requests and notices, the Class R
Certificates after the Distribution Date on which they receive the distribution
of the last dollar of their original

                                       I-5

<PAGE>

principal amount shall be deemed to have a Current Principal Amount equal to
their Current Principal Amount on the day immediately preceding such
Distribution Date.

         CUT-OFF DATE:  November 1, 2000.

         CUT-OFF DATE BALANCE:  $238,202,708.

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

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

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

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

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

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

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

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

         DETERMINATION DATE: 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

                                       I-6

<PAGE>

than certain farmers' cooperatives described in Section 521 of the Code) which
is exempt from the tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income), (iv)
rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of
the Code or (v) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the holding of an ownership interest in a Residual
Certificate by such Person may cause the Trust or any Person having an ownership
interest in the Residual Certificate (other than such Person) to incur a
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in a Residual Certificate
to such Person. The terms "United States," "State" and "international
organization" shall have the meanings set forth in Section 7701 of the Code or
successor provisions.

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

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

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

         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 9.01 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 of such
Certificate and the denominator of which is the Current Principal Amount of such
Class. With respect to the Certificates in the aggregate, the fractional
undivided interest evidenced by (i) a Class R Certificate and Class XP
Certificate will be deemed to equal 1% and 1%, respectively, multiplied by a
fraction, the numerator of which is the Current Principal Amount of such
Certificate and the denominator of which is the aggregate Current Principal
Amount of such

                                       I-7

<PAGE>

respective Class and (ii) a Certificate of any other Class will be deemed to
equal 98% 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).

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

         INDEMNIFIED PERSONS: The Trustee, its officers, directors, agents and
employees and any separate co-trustee and its officers, directors, agents and
employees.

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

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

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

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

                                       I-8

<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 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, or constitutes a
Neg Am 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; and

                  (d) As to any Neg Am Loan, the amount of Deferred Interest
         added to the Schedule Principal Balance thereof during the relevant Due
         Period in accordance with the terms of the related Mortgage Note.

         INVESTMENT LETTER: The letter to be furnished by each Institutional
Accredited Investor which purchases any Class B-4, Class B-5 and Class B-6
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) property protection expenses, (b) property
sales expenses, (c) foreclosure and sale costs, including

                                       I-9

<PAGE>

court costs and reasonable attorneys' fees, and (d) similar expenses reasonably
paid or incurred in connection with liquidation.

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

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

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

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

         MASTER SERVICER: As of the Closing Date, First Republic Bank and,
thereafter, its respective successors in interest who meet the qualifications
pursuant to 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 0.375%.

         MONTHLY ADVANCE: An advance of principal or interest required to be
made by the Master Servicer pursuant to Section 5.03 of the Servicing Agreements
or the Trustee pursuant to Section 6.06.

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

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

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

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of November 30, 2000, between EMC, as seller, and Structured Asset
Mortgage Investments Inc., as purchaser, and all amendments thereof and
supplements thereto.

                                      I-10

<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 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.

         NEG AM LOAN:  Any Mortgage Loan with a negative amortization feature.

         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 sum of the Master Servicing Fee Rate
and the Trustee's Fee 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.

         OFFERED CERTIFICATE: Any Class A, Class B-l, Class B-2, Class B-3 and
Class R Certificate.

         OFFERED SUBORDINATE CERTIFICATES: The Class B-l. Class B-2 and Class
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 and
delivered to the Trustee, as required by this Agreement.

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

                                      I-11

<PAGE>

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

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

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

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

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

         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

                                      I-12

<PAGE>

         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;

                  (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.

                                      I-13

<PAGE>

         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 B-4, Class B-5 and Class B-6
Certificates.

         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.

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

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

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

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

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

                                      I-14

<PAGE>

         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: That group of assets contained in the Trust Fund designated as a
"real estate mortgage investment conduit" (as defined under the Code),
consisting of (i) the Mortgage Loans, (ii) the Certificate Account, (iii) any
REO Property relating to the Mortgage Loans, (iv) the rights with respect to any
Servicing Agreements and (v) any proceeds of the foregoing.

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

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

         REMIC OPINION: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause the REMIC to fail to qualify as a REMIC while any regular interest in the
REMIC is outstanding, (ii) result in a tax on prohibited transactions with
respect to the REMIC or (iii) constitute a taxable contribution to the 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 pursuant to Article II
an amount equal to the sum of (i) 100% of the Outstanding Principal Balance of
such Mortgage Loan as of the date of repurchase (or if the related Mortgaged
Property was acquired with respect thereto, 100% of the Outstanding Principal
Balance at the date of the acquisition), 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.

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

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

         RESIDUAL CERTIFICATES:  The Class R Certificates.

                                      I-15

<PAGE>

         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) plus (ii) in the case of each Mortgage Loan which negatively amortizes,
any Deferred Interest added to principal through such Due Date and less (iii)
any Principal Prepayments (including the principal portion of Net Liquidation
Proceeds) received during or prior to the related Prepayment Period; provided
that the Scheduled Principal Balance of a Liquidated Mortgage Loan is zero.

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

         SECURITIES LEGEND: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER

                                      I-16

<PAGE>

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 MASTER SERVICER OR THE TRUSTEE,
WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A
GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION OR AN OPINION OF
COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF AN INSTITUTIONAL ACCREDITED INVESTOR."

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

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

         SENIOR CERTIFICATES: The Class A-1, Class A-2, Class XP and Class R
Certificates.

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

                  (i) the Senior Percentage of all scheduled payments of
         principal allocated to the Scheduled Principal Balance due on each
         Outstanding Mortgage Loan 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

                                      I-17

<PAGE>

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

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

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

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

         SENIOR PERCENTAGE: Initially 97.25%. On any Distribution Date, the
lesser of (i) 100% and (ii) the percentage (carried to six places rounded up)
obtained by dividing the aggregate Current Principal Amounts of all the Senior
Certificates immediately preceding such Distribution Date by the aggregate
Scheduled Principal Balance of the Mortgage Loans as of the beginning of the
related Due Period.

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

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

December 25, 2010 - November 25,                   Senior Percentage plus 70% of the Subordinate
2011                                               Percentage

December 25, 2011 - November 25,                   Senior Percentage plus 60% of the Subordinate
2012                                               Percentage

December 25, 2012 - November 25,                   Senior Percentage plus 40% of the Subordinate
2013                                               Percentage

December 25, 2013 - November 25,                   Senior Percentage plus 20% of the Subordinate
2014                                               Percentage
------------------------------------------------------------------------------------------------

                                      I-18

<PAGE>

December 25, 2014 and thereafter                   Senior Percentage
</TABLE>

         In addition, no reduction of the 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 Mortgage Loans delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and Mortgage Loans with respect
to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the sum of the aggregate
Current Principal Amount of the Subordinate Certificates does not exceed 50%, or
(y) the aggregate Scheduled Principal Balance of the Mortgage Loans delinquent
60 days or more (including for this purpose any such Mortgage Loans in
foreclosure and such Mortgage Loans with respect to which the related Mortgaged
Property has been acquired by the Trust), averaged over the last six months, as
a percentage of the aggregate Scheduled Principal Balances of the Mortgage Loans
averaged over the last six months, does not exceed 2.0%; and (ii) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including December 2010 and November 2011, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
December 2011 and November 2012, (c) 40% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including December 2012 and
November 2013, (d) 45% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including December 2013 and November 2014,
and (e) 50% of the Original Subordinate Principal Balance if such Distribution
Date occurs during or after December 2014; or (B) (i) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and such Mortgage Loans
with respect to which the related Mortgaged Property has been acquired by the
Trust), averaged over the last six months, does not exceed 4.0% of the
then-current aggregate Scheduled Principal Balance of the Mortgage Loans; and
(ii) cumulative Realized Losses on the Mortgage Loans do not exceed (a) 10% of
the Original Subordinate Principal Balance if such Distribution Date occurs
between and including December 2010 and November 2011, (b) 15% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including December 2011 and November 2012, (c) 20% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
December 2012 and November 2013, (d) 25% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including December 2013 and
November 2014, and (e) 30% of the Original Subordinate Principal Balance if such
Distribution Date occurs during or after December 2014.

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

                                      I-19

<PAGE>

December 25, 2003, then the Senior Prepayment Percentage for such Distribution
Date will equal the Senior Percentage plus 50% of the Subordinate Percentage.

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

         SENIOR SUPPORT CERTIFICATES:  Any of the Class A-2 Certificates.

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

         SERVICING AGREEMENTS: The Purchase, Warranties and Servicing Agreement,
dated as of September 1, 2000, and the Purchase, Warranties and Servicing
Agreement, dated as of November 1, 2000, each between the Master Servicer and
EMC.

         STARTUP DAY:  November 30, 2000.

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

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

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

                  (i) the Subordinate Percentage of the principal portion of all
         Monthly Payments due on each Outstanding Mortgage Loan 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 Subordinate Prepayment Percentage of each Principal
         Payment in part during the related Prepayment Period with respect to
         each Mortgage Loan and the Subordinate Prepayment Percentage of the
         Scheduled Principal Balance of each Mortgage Loan that was the subject
         of a Principal Prepayment in full during the related Prepayment Period;

                                      I-20

<PAGE>

                  (iii) the excess, if any, of (A) all Net Liquidation Proceeds
         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 Senior Optimal Principal Amount on such
         Distribution Date;

                  (iv) the Subordinate Prepayment Percentage of the sum of (a)
         the Scheduled Principal Balance of each 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
         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 Senior Certificates have all been reduced to zero, 100%
         of any Senior Optimal Principal Amount.

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

         SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus the
applicable Senior Percentage.

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

         SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Trustee
pursuant to Section 2.04, in each case, (i) which has an Outstanding Principal
Balance not greater nor materially less than the Mortgage Loan for which it is
to be substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less
than, and not materially greater than, such Mortgage Loan; (iii) which has a
maturity date not materially earlier or later than such Mortgage Loan and not
later than the latest maturity date of any Mortgage Loan; (iv) which is of the
same property type and occupancy type as such Mortgage Loan; (v) which has a
Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such Mortgage
Loan; (vi) which is current in payment of principal and interest as of the date
of substitution; and (vii) as to which the payment terms do not vary in any
material respect from the payment terms of the Mortgage Loan for which it is to
be substituted.

         SUPER SENIOR CERTIFICATES:  The Class A-1 Certificates.

         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 the Residual Certificates shall
be the Tax Matters Person for the REMIC, as more particularly set forth in
Section 9.13 hereof.

                                      I-21

<PAGE>

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

         TRUSTEE'S FEES: With respect to each Distribution Date, the amount to
be paid to the Trustee calculated monthly on a Mortgage Loan by Mortgage Loan
basis, equal to the sum of the product of (x) the Scheduled Principal Balance of
such Mortgage Loan on the Due Date in the month prior to the month of such
Distribution Date and (y) one-twelfth of 0.005%.

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

                                      I-22

<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, and (ix) any proceeds of the foregoing. Although it is
the intent of the parties to this Agreement that the conveyance of the Seller's
right, title and interest in and to the Mortgage Loans and other assets in the
Trust Fund pursuant to this Agreement shall constitute a purchase and sale and
not a loan, in the event that such conveyance is deemed to be a loan, it is the
intent of the parties to this Agreement that the Seller shall be deemed to have
granted to the Trustee a first priority perfected security interest in all of
the Seller's right, title and interest in, to and under the Mortgage Loans and
other assets in the Trust Fund, and that this Agreement shall constitute a
security agreement under applicable law.

         (b) In connection with the above transfer and assignment, the Seller
hereby deposits with the Trustee, with respect to (A) each Mortgage Loan, other
than Cooperative Loans (i) the original Mortgage Note, endorsed without recourse
to the order of the Trustee and showing an unbroken chain of endorsements from
the original payee thereof to the Person endorsing it to the Trustee, (ii) the
original Security Instrument, which shall have been recorded, with evidence of
such recording indicated thereon, (iii) a certified copy of the assignment
(which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to the Trustee of the
Security Instrument, with evidence of recording with respect to each Mortgage
Loan in the name of the Trustee thereon (or if clause (x) in the proviso below
applies, shall be in recordable form), (iv) all intervening assignments of the
Security Instrument, if applicable and only to the extent available to the
Seller with evidence of recording thereon, (v) the original or a copy of the
policy or certificate of primary mortgage guaranty insurance, to the extent
available, if any, (vi) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title insurance and
(vii) originals of all modification agreements, if applicable and available and
(B) each Cooperative Loan (i) the original Mortgage Note, endorsed, without
recourse to the order of the Trustee, and showing, to the extent available, an
unbroken chain of title from the originator to the Trustee or, in the case of a
Mortgage Loan that is subject to the terms of a consolidation and modification
agreement, an assignment of such agreement to the Trustee; (ii) the original
duly executed assignment of security agreement to the Trustee; (iii) the
original Mortgage; (iv) the acknowledgment copy of the original executed Form
UCC-1 (or certified copy thereof) with respect

                                      II-1

<PAGE>

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

PROVIDED, HOWEVER, that in lieu of the foregoing, the Seller may deliver the
following documents, under the circumstances set forth below: (x) in lieu of the
original Security Instrument, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will, upon
receipt of recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording and have
not been returned to the Seller in time to permit their delivery as specified
above, the Seller may deliver a true copy thereof with a certification by the
Seller or the 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"; and (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 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). With respect to the Cooperative Loans,
the Seller will, promptly after the Closing Date, cause the related financing
statements (if not yet filed) and an assignment thereof from the Seller to the
Trustee to be filed in the appropriate offices. The Seller need not cause to be
recorded any assignment in any jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered by the Seller to the Trustee, the
Custodian and the Rating Agencies, the recordation of such assignment is not
necessary to protect the Trustee's interest in the related Mortgage Loan;
provided, however, notwithstanding the delivery of any Opinion of Counsel, each
assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Trust 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

                                      II-2

<PAGE>

bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the
occurrence of a servicing transfer as described in Section 8.02 hereof and (v)
if the Seller is not the Master Servicer and with respect to any one assignment,
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage. Notwithstanding the foregoing, if the
Seller fails to pay the cost of recording the assignments, such expense will be
paid by the Trustee and the Trustee shall be reimbursed for such expenses by the
Trust 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 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 EMC. EMC shall correct or cure any such defect within 90
days from the date of notice from the Trustee of the defect and if EMC 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, EMC will, subject to Section 2.04, within 90 days from the
Trustee's notification 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 EMC 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, EMC shall not be required to purchase such Mortgage Loan if EMC
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 EMC 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 EMC 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

                                      II-3

<PAGE>

recording, and delivery to the Trustee shall be effected by EMC 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 EMC (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). EMC shall correct or cure any such
defect or shall deliver to the Trustee an Opinion of Counsel to the effect that
such defect does not materially or adversely affect the interests of
Certificateholders in such Mortgage Loan within 90 days from the date of notice
from the Trustee of the defect and if EMC 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, EMC shall, subject to
Section 2.04, within 120 days from the Trustee's notification purchase such
Mortgage Loan at the Repurchase Price, PROVIDED, HOWEVER, that if such defect
relates solely to the inability of EMC 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, EMC shall not be required to purchase such Mortgage
Loan, if EMC 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 EMC in accordance
with Subsections 2.02(a) or (b) above, EMC shall provide the Repurchase Price to
the Trustee for deposit in the Certificate Account and shall provide to the
Trustee written notification detailing the components of the Repurchase Price.
Upon deposit of the Repurchase Price in the Certificate Account, the Trustee
shall release to EMC the related Mortgage File and shall execute and deliver all
instruments of transfer or assignment, without recourse, furnished to it by EMC
as are necessary to vest in EMC 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 EMC 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

                                      II-4

<PAGE>

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 EMC 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 or the Trustee discovers a breach of any of the
representations and warranties set forth in Exhibit C or Section 7 of the
Mortgage Loan Purchase Agreement and such breach existed on the date the
representation and warranty was made, which breach materially and adversely
affects the value of the interests of Certificateholders or the Trustee in the
related Mortgage Loan, the party discovering the breach shall give prompt
written notice of the breach to the other parties. EMC within 90 days of its
discovery or receipt of notice that such breach has occurred (whichever occurs
earlier), shall cure the breach in all material respects or, subject to Section
2.04, shall purchase 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 Exhibit C and the Mortgage Loan or the related
property acquired with respect thereto has been sold, then EMC 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 EMC to the extent not
required by law to be paid to the borrower.) Any such purchase by 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 EMC the
related Mortgage File and shall execute and deliver all instruments of transfer
or assignment furnished to it by EMC, without recourse, as are necessary to vest
in EMC title to and rights under the Mortgage Loan or any property acquired with
respect thereto. Such purchase shall be deemed to have occurred on the date on
which the Repurchase Price in available funds is received by the Trustee. The
Trustee shall amend the Mortgage Loan Schedule to reflect such repurchase and
shall promptly notify the Master Servicer and the Rating Agencies of such
amendment. Enforcement of the obligation of EMC, 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 Sections 2.02 or 2.03, EMC may, no later than the date by which such
purchase by EMC would otherwise be required, tender to the Trustee a Substitute
Mortgage Loan accompanied by a certificate of an authorized officer of EMC that
such Substitute Mortgage Loan conforms to the requirements set forth in the
definition of "Substitute Mortgage Loan"; PROVIDED, HOWEVER, that substitution
pursuant to this Section 2.04 in lieu of purchase shall not be permitted after
the termination of the two-year period beginning on the Startup Day. The Trustee
shall examine the Mortgage File for any Substitute Mortgage Loan in the manner
set forth in Section 2.02(a) and shall notify EMC in writing, within five
Business Days after

                                      II-5

<PAGE>

receipt, whether or not the documents relating to the Substitute Mortgage Loan
satisfy the requirements of the third sentence of Subsection 2.02(a). Within two
Business Days after such notification, EMC shall provide to the Trustee for
deposit in the Certificate Account the amount, if any, by which the Outstanding
Principal Balance as of the next preceding Due Date of the Mortgage Loan for
which substitution is being made, after giving effect to Scheduled Principal due
on such date, exceeds the Outstanding Principal Balance as of such date of the
Substitute Mortgage Loan, after giving effect to Scheduled Principal due on such
date, which amount shall be treated for the purposes of this Agreement as if it
were the payment by EMC of the Repurchase Price for the purchase of a Mortgage
Loan by EMC. After such notification to EMC and, if any such excess exists, upon
receipt of such deposit, the Trustee shall accept such Substitute Mortgage Loan
which shall thereafter be deemed to be a Mortgage Loan hereunder. In the event
of such a substitution, accrued interest on the Substitute Mortgage Loan for the
month in which the substitution occurs and any Principal Prepayments made
thereon during such month shall be the property of the Trust Fund and accrued
interest for such month on the Mortgage Loan for which the substitution is made
and any Principal Prepayments made thereon during such month shall be the
property of EMC 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 EMC and the Scheduled Principal on the Mortgage Loan for which the
substitution is made due on such Due Date shall be the property of the Trust
Fund. Upon acceptance of the Substitute Mortgage Loan, the Trustee shall release
to EMC the related Mortgage File related to any Mortgage Loan released pursuant
to this Section 2.04 and shall execute and deliver all instruments of transfer
or assignment, without recourse, in form as provided to it as are necessary to
vest in EMC title to and rights under any Mortgage Loan released pursuant to
this Section 2.04. EMC shall deliver the documents related to the Substitute
Mortgage Loan in accordance with the provisions of Subsections 2.01(b) and
2.02(b), with the date of acceptance of the Substitute Mortgage Loan deemed to
be the Closing Date for purposes of the time periods set forth in those
Subsections. The representations and warranties set forth in the applicable
Servicing Agreements and Exhibit C shall be deemed to have been made by EMC with
respect to each Substitute Mortgage Loan as of the date of acceptance of such
Mortgage Loan by the Trustee. The Trustee shall amend the Mortgage Loan Schedule
to reflect such substitution and shall provide a copy of such amended Mortgage
Loan Schedule to the Master Servicer and the Rating Agencies.

         Section 2.05. ISSUANCE OF CERTIFICATES. 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.

         Section 2.06. REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER. The
Seller hereby represents and warrants to the Trustee 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

                                      II-6

<PAGE>

         a material adverse effect on the Seller's business as presently
         conducted or on the Purchaser's ability to enter into this Agreement
         and to consummate the transactions contemplated hereby;

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

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

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

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

                  (vi) there are no actions, suits or proceedings pending or, to
         the knowledge of the Seller, threatened against the Seller, before or
         by any court, administrative agency, arbitrator or governmental body
         (i) with respect to any of the transactions contemplated by this
         Agreement or (ii) with respect to any other matter which in the
         judgment of the Seller will be determined adversely to the Seller and
         will if determined adversely to the Seller materially and adversely
         affect the Seller's ability to enter into this Agreement or perform its
         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.

                                      II-7

<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 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 the 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 received a REMIC Opinion prepared
at the expense of the Trust Fund; and (b) other than with respect to a
substitution pursuant to Section 2.04, accept any contribution to the REMIC
after the Startup Day without receipt of a REMIC Opinion.

                                      III-1

<PAGE>

         Section 3.03. REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.
Within 15 days after each Distribution Date, the Trustee shall, in accordance
with industry standards, file with the Commission via the Electronic Data
Gathering and Retrieval System ("EDGAR"), a Form 8-K with a copy of the
statement to the Certificateholders for such Distribution Date as an exhibit
thereto. Prior to January 30, 2001, the Trustee shall, in accordance with
industry standards and only if instructed by the Seller, file a Form 15
Suspension Notice with respect to the Trust Fund, if applicable. Prior to March
30, 2001, the Trustee shall file a Form 10-K, in substance conforming to
industry standards, with respect to the Trust Fund. The Seller hereby grants to
the Trustee a limited power of attorney to execute and file each such document
on behalf of the Seller. Such power of attorney shall continue until either the
earlier of (i) receipt by the Trustee from the Seller of written termination of
such power of attorney and (ii) the termination of the Trust Fund. The Seller
agrees to promptly furnish to the Trustee, from time to time upon request, such
further information, reports and financial statements within its control related
to this Agreement and the Mortgage Loans as the Trustee reasonably deems
appropriate to prepare and file all necessary reports with the Commission. The
Trustee shall have no responsibility to file any items other than those
specified in this Section 3.03; provided, however, the Trustee will cooperate
with the Seller in connection with any additional filings with respect to the
Trust Fund as the Seller deems necessary under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Copies of all reports filed by the
Trustee under the Exchange Act shall be sent to: the Seller c/o Bear, Stearns &
Co. Inc., Attn: Managing Director-Analysis and Control, One Metrotech Center
North, Brooklyn, New York 11202-3859. Fees and expenses incurred by the Trustee
in connection with this Section 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 in connection with the Trust.

                                      III-2

<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 EMC pursuant to Sections 2.02 or 2.03, any amounts which
         are to be treated pursuant to Section 2.04 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 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 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
Certificate Account from time to time shall be for the account of the Trustee.
The

                                      IV-1

<PAGE>

Trustee shall be permitted to withdraw any and all investment earnings from the
Certificate Account at any time. If there is any loss on a Permitted Investment
or demand deposit, the Trustee 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, 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 each Distribution Date, the Trustee shall pay the amount
distributable to the Holders of the Certificates in accordance with Section 6.01
from the funds in the Certificate Account. The Trustee shall direct any
investments of the Certificate Account and may retain for its own account the
amount of investment earnings, net of losses, from the Certificate Account.

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

                                      IV-2

<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 November 30, 2000
(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) The REMIC will be evidenced by (x) the Certificates (other than the
Class R Certificates) (the "REMIC Regular Certificates"), which are hereby
designated as the "regular interests" in the REMIC and (y) the Class R
Certificate, which is hereby designated as the single

                                       V-1

<PAGE>

"residual interest" in the REMIC. Any amounts with respect to the Mortgage Loans
payable to the Certificates other than the Residual Certificates shall be
payable to the REMIC Regular Certificates.

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

       DESIGNATION        INITIAL PRINCIPAL AMOUNT         PASS-THROUGH RATE
       -----------        ------------------------         -----------------
            A-1              $       226,292,500                 (1)
            A-2              $         5,359,400                 (1)
             XP              $               100                 (1)
            B-1              $         1,786,500                 (1)
            B-2              $           952,800                 (1)
            B-3              $           952,800                 (1)
            B-4              $         1,191,000                 (1)
            B-5              $           714,600                 (1)
            B-6              $           952,909                 (1)
              R              $               100                 (1)

-------------
(1) The Certificates will bear interest at a variable Pass-Through Rate equal to
the weighted average of the Net Rates of the Mortgage Loans, weighted on the
basis of the respective Scheduled Principal Balances of each 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 7.4956% 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 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 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, A-3 and A-4. 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

                                       V-2

<PAGE>

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
Class B-4, Class B-5, Class B-6 Certificates will be issued in certificated
fully-registered form in 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 Class R Certificates and Class XP
Certificates shall each be issued in certificated fully-registered form in the
denomination of $100. 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,

                                       V-3

<PAGE>

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 the
REMIC within the meaning of Section 860G(a)(9) of the Code.

         (k) For federal income tax purposes, the 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 the REMIC to timely
elect to be treated as a real estate mortgage investment conduit under Section
860D of the Code. Any inconsistencies or ambiguities in this Agreement or in the
administration of any Trust established hereby shall be resolved in a manner
that preserves the validity of such elections.

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

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

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

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

                  (ii) The Trustee shall register the transfer of any Individual
         Certificate if (x) the transferor has advised the Trustee in writing
         that the Certificate is being transferred to an

                                       V-4

<PAGE>

         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).

                  (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:

                                       V-5

<PAGE>

                  (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 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

                                       V-6

<PAGE>

Trust Office, sign, countersign and deliver at such Corporate Trust Office, to
the transferee (in the case of transfer) or holder (in the case of exchange) or
send by first class mail at the risk of the transferee (in the case of transfer)
or holder (in the case of exchange) to such address as the transferee or holder,
as applicable, may request, an Individual Certificate or Certificates, as the
case may require, for a like aggregate Fractional Undivided Interest and in such
authorized denomination or denominations as may be requested. The presentation
for transfer or exchange of any Individual Certificate shall not be valid unless
made at the Corporate Trust Office by the registered holder in person, or by a
duly authorized attorney-in-fact.

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

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

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

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

         (m) The following legend shall be placed on the Class XP, Class R,
Class B-4, Class B-5 and Class B-6 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

                                       V-7

<PAGE>

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

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

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

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

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

         (b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Trustee and the Seller an affidavit in the form attached
hereto as Exhibit E

                                       V-8

<PAGE>

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

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

         (d) By accepting a Residual Certificate, the purchaser thereof agrees
to be a Tax Matters Person, and appoints the 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

                                       V-9

<PAGE>

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 Class XP, Class B-4, Class B-5 and Class B-6 Certificates shall
each bear a Securities Legend.

         Section 5.07. ERISA RESTRICTIONS. (a) Subject to the provisions of
subsection (b), no Residual Certificates or any Class XP, Class B-4, Class B-5
or Class B-6 Certificates may be acquired directly or indirectly by, or on
behalf of, an employee benefit plan or other retirement arrangement which is
subject to Title I of ERISA and/or Section 4975 of the Code, unless the proposed
transferee provides either (i) the Trustee and the Master Servicer with an
Opinion of Counsel satisfactory to the Trustee and the Master Servicer, which
opinion will not be at the expense of the Trustee or the Master Servicer, that
the purchase of such Certificates by or on behalf of such Plan is permissible
under applicable law, will not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Trustee or the Master Servicer to any obligation in addition to those undertaken
in the Agreement or (ii) a representation or certification to the Trustee (upon
which the Trustee is authorized to rely) to the effect that the proposed
transfer and/or holding of such a Certificate and the servicing, management and
operation of the Trust: (I) will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code which is not covered under an
individual or class prohibited transaction exemption including but not limited
to Department of Labor Prohibited Transaction Exemption ("PTE") 84-14 (Class
Exemption for Plan Asset Transactions Determined by Independent Qualified
Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTE 95-60 (Class Exemption for Certain Transactions Involving
Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan
Asset Transactions Determined by In-House Asset Managers and (II) will not
subject the Seller, the Master Servicer or the Trustee to any obligation in
addition to those undertaken in the Agreement.

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

                                      V-10

<PAGE>

         (c) The Trustee will not 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.

                                      V-11

<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 December 2000, in an aggregate amount equal to the Available
Funds for such Distribution Date.

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

                           FIRST, the Accrued Certificate Interest on each Class
                           of Senior Certificates for such Distribution Date,
                           less any Net Interest Shortfalls allocated thereto in
                           accordance with Section 6.03(g);

                           SECOND, any Accrued Certificate Interest on each
                           Class of Senior Certificates remaining undistributed
                           from previous Distribution Dates, to the extent of
                           remaining Available Funds, any shortfall in available
                           amounts being allocated among such Classes in
                           proportion to the amount of such Accrued Certificate
                           Interest remaining undistributed for each such Class
                           for such Distribution Date;

                           THIRD, on the Distribution Date in December, 2005, to
                           the Class XP Certificates in reduction of the Current
                           Principal Amounts thereof, until the Current
                           Principal Amount thereof has been reduced to zero;

                           FOURTH, to the Senior Certificates in reduction of
                           the Current Principal Amounts thereof:

                                    Senior Optimal Principal Amount, in the
                                    following order of priority:

                                            first, to the Class R Certificates
                                            until the Current Principal Amount
                                            thereof has been reduced to zero;
                                            and

                                            second, concurrently on a pro rata
                                            basis, to the Class A-1 and Class
                                            A-2 Certificates, until the Current
                                            Principal Amount thereof has been
                                            reduced to zero;

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

                                      VI-1

<PAGE>

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

         (b) On each Distribution Date, 50% of the amounts representing
Prepayment Charges in respect of the Mortgage Loans received during the related
Prepayment Period will be withdrawn from the Certificate Account and distributed
by the Trustee to the Holders of the Class XP Certificates and shall not be
available for distribution to the Holders of any other Class of Certificates.
The payment of the foregoing amounts to the Holders of the Class XP Certificates
shall not reduce the Certificate Principal Balances thereof.

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

         (d) On each Distribution Date, any Available Funds remaining after
payment of interest and principal as described above will be distributed to the
Class R 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 is less than the Accrued Certificate Interest on the Senior
Certificates for such Distribution Date prior to reduction for Net Interest
Shortfall and the interest portion of Realized Losses, the shortfall will be
allocated among the holders of each Class of Senior Certificates in 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 the REMIC, to
the extent that such expenses relate to the assets of the REMIC.

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

                                      VI-2

<PAGE>

         (b) With respect to any Distribution Date, the aggregate amount of
Deferred Interest, if any, that is added to the principal balance of the related
negatively amortizing Mortgage Loans on the Due Date occurring in the month in
which such Distribution Date occurs will be added to the Current Principal
Amounts of the Certificates (other than the Class XP Certificates)as an interest
shortfall, on a pro rata basis based on a fraction, the numerator of which is
the Current Principal Amount of each such Class and the denominator of which is
the aggregate Current Principal Amount of such Classes of Certificates, in each
case immediately prior to such Distribution Date. Deferred Interest allocated to
any Certificate on any Distribution Date will be added to the Current Principal
Amount thereof on such Distribution Date and will thereafter bear interest at
the then applicable Pass-Through Rate.

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

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

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

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

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

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

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

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

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

                                    seventh, to the Senior Support Certificates,
         until its Current Principal Amount has been reduced to zero, and then,
         to the Super Senior Certificates; and

                                    eighth, to the Super Senior Certificates,
         until its Current Principal Amount has been reduced to zero.

                                      VI-3

<PAGE>

         No Realized Losses will be allocated to the Class XP Certificates.

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

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

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

         (f) On each Distribution Date, the Trustee shall determine the
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 Cross-Over Date, the Current Principal Amounts of
the Subordinate Certificates, in the reverse order of their numerical Class
designations and (ii) from and after the Cross-Over Date, the Senior
Certificates (other than the Class XP Certificates), pro rata based on their
respective Current Principal Amounts, which reduction shall occur on such
Distribution Date after giving effect to distributions made on such Distribution
Date.

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

         Section 6.04. PAYMENTS. (a) On each Distribution Date, other than the
final Distribution Date, the Trustee shall distribute to each Certificateholder
of record on the directly preceding Record Date the Certificateholder's PRO RATA
share of its Class (based on the aggregate Fractional Undivided Interest
represented by such Holder's Certificates) of all amounts required to be
distributed on such Distribution Date to such Class. The Trustee shall calculate
the amount to be distributed to each Class and, based on such amounts, the
Trustee shall determine the amount to be distributed to each Certificateholder.
All of the Trustee's calculations of payments shall be based solely on
information

                                      VI-4

<PAGE>

provided to the Trustee by the Master Servicer. The Trustee shall not be
required to confirm, verify or recompute any such information but shall be
entitled to rely conclusively on such information.

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

         Section 6.05. STATEMENTS TO CERTIFICATEHOLDERS. (a) Concurrently with
each distribution to Certificateholders, the Trustee shall make available via
the Trustee's internet website as set forth below, the following information,
expressed with respect to clauses (i) through (vii) in the aggregate and as a
Fractional Undivided Interest representing an initial Current Principal Amount
of $1,000 or in the case of the Residual Certificates, an initial Current
Principal Amount of $100 for Class R:

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

                  (ii) the amount of the distribution allocable to principal on
         each applicable Class of Certificates and the amount of the
         distribution made to the Holders of the Class XP Certificates allocable
         to Prepayment Charges;

                  (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 (separately stating the
         amount, if any, of Deferred Interest) and any other adjustments to
         interest at the related Pass-Through Rate necessary to account for any
         difference between interest accrued and aggregate interest distributed
         with respect to each Class of Certificates;

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

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

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

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

                                      VI-5

<PAGE>

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

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

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

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

                  (xiii) the number of Mortgage Loans in the foreclosure process
         as of the end of the related Due Period and the aggregate Outstanding
         Principal Balance of such Mortgage Loans;

                  (xiv) the number and aggregate Outstanding Principal Balance
         of all Mortgage Loans as to which the Mortgaged Property was REO
         Property as of the end of the related Due Period;

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

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

                  (xvii) the Average Loss Severity for the prior calendar month;
         and

                  (xviii) the then applicable Senior Percentage, Senior
         Prepayment Percentage, Subordinate Percentage and Subordinate
         Prepayment Percentage.

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

                                      VI-6

<PAGE>

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

         (b) By April 30 of each year beginning in 2001, the Trustee will
furnish a report to each Holder of the Certificates of record at any time during
the prior calendar year as to the aggregate of amounts reported pursuant to
subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Trustee may determine to be necessary and/or to be
required by the Internal Revenue Service or by a federal or state law or rules
or regulations to enable such Holders to prepare their tax returns for such
calendar year. Such obligations shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Trustee pursuant to the requirements of the Code.

         Section 6.06. MONTHLY ADVANCES. Pursuant to Section 5.03 of the
Servicing Agreements, the Master Servicer shall make Monthly Advances. On the
Business Day prior to each Distribution Date, if a Mortgage Loan is more than 90
days delinquent, the Master Servicer will be obligated to make a Monthly Advance
by deposit into the Certificate 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. The Trustee shall be obligated to make such Monthly
Advance on the Distribution Date if the Master Servicer fails to do so. The
Trustee shall be reimbursed for any Monthly Advance in the same manner that the
Master Servicer would be reimbursed for a Monthly Advance.

         Section 6.07. PREPAYMENT CHARGES. For any Mortgage Loan in which a
Prepayment Charge is due, the Trustee will verify that the Master Servicer
remitted an amount with respect to such Prepayment Charge. The Trustee is not
responsible for verifying the correctness of such Prepayment Charge. If the
Master Servicer fails to remit a Prepayment Charge to the Trustee, and the
Trustee notified the Master Servicer that such Prepayment Charge due but not
received and the Master Servicer fails to remit such Prepayment Charge within
four Business Days, the Trustee will promptly provide notice in writing of such
failure to the Seller.

                                      VI-7

<PAGE>

                                   ARTICLE VII

                                 Indemnification

         Section 7.01. INDEMNIFICATION OF THE TRUSTEE. The Trust shall indemnify
the Indemnified Persons for, and will hold them harmless against, any loss,
liability or expense incurred on their part, arising out of, or in connection
with, this Agreement and the Certificates, including the costs and expenses
(including reasonable legal fees and expenses) of defending themselves against
any such claim other than (i) any loss, liability or expense related to such
Indemnified Person's failure to perform such Indemnified Person's duties in
strict compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) and (ii) any
loss, liability or expense incurred by reason of such Indemnified Person's
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. This indemnity shall survive the resignation or removal of the
Trustee and the termination of this Agreement.

                                      VII-1

<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 this Agreement to the contrary, the
Trustee shall be entitled to be reimbursed by the Master Servicer

                                     VIII-1

<PAGE>

(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.

                                     VIII-2

<PAGE>

                                   ARTICLE IX

                             Concerning the Trustee

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

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

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

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

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

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

                  (iii) The Trustee shall not be liable with respect to any
         action taken, suffered or omitted to be taken by it in good faith in
         accordance with the directions of the Holders of

                                      IX-1

<PAGE>

         Certificates evidencing Fractional Undivided Interests aggregating not
         less than 25% of the Trust Fund, if such action or non-action relates
         to the time, method and place of conducting any proceeding for any
         remedy available to the Trustee, or exercising any trust or other power
         conferred upon the Trustee, under this Agreement;

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

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

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

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

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

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

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

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

                                      IX-2

<PAGE>

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

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

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

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

                  (vi) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or through
         Affiliates, 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. The Trustee shall not
         be liable or responsible for the misconduct or negligence of any of the
         Trustee's agents or attorneys or a custodian or paying agent appointed
         hereunder by the Trustee with due care and, when required, with the
         consent of the Master Servicer;

                                      IX-3

<PAGE>

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

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

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

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

         Section 9.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein and in the Certificates (other than the signature
and countersignature of the Trustee on the Certificates) shall be taken as the
statements of the Seller, and the Trustee shall have no responsibility for their
correctness. The Trustee makes no representation as to the validity or
sufficiency of the Certificates (other than the signature and countersignature
of the Trustee on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 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. The Trustee shall not be accountable for the
use or application by the Seller of any of the Certificates or of the proceeds
of such Certificates, or for the use or application of any funds paid to the
Seller with respect to the Mortgage Loans. Subject to the provisions of Section
2.05, the Trustee shall not be responsible for the legality or validity of this
Agreement or any document or instrument relating to this Agreement, the validity
of the execution of this Agreement or of any supplement hereto or instrument of
further assurance, or the validity, priority, perfection or sufficiency of the
security for the Certificates issued hereunder or intended to be issued
hereunder. The Trustee shall at no time have any responsibility or liability for
or with respect to the legality, validity and enforceability of any Mortgage or
any Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust Fund or its ability to generate the payments to be
distributed to Certificateholders, under this Agreement. The Trustee shall have
no responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection of
any security interest or lien granted to it hereunder or to record this
Agreement other than any continuation statements filed by the Trustee pursuant
to Section 3.04.

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

                                      IX-4

<PAGE>

         Section 9.05. TRUSTEE'S FEES AND EXPENSES. The Seller covenants and
agrees to pay to the Trustee the Trustee's Fees as set forth herein and in
accordance with such understanding as may be agreed to between such parties. The
Trustee will be entitled to recover from the Certificate Account pursuant to
Section 4.02(c) all reasonable out-of-pocket expenses, disbursements and
advances and the expenses of the Trustee 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
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 shall recover such expenses from the Seller. Such compensation and
reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust.

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

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

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

                                      IX-5

<PAGE>

Trustee. If no successor Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

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

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

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

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

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

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

                                      IX-6

<PAGE>

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

         Section 9.11. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust or property constituting the same may at the time be located, the 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 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

                                      IX-7

<PAGE>

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 the REMIC shall be a calendar year and the Trustee shall
maintain or cause the maintenance of the books of the REMIC on the accrual
method of accounting.

         (b) The Trustee shall prepare, sign and file or cause to be filed with
the Internal Revenue Service Federal tax information returns or elections
required to be made hereunder with respect to the REMIC, 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 Trustee shall timely prepare
and file 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 the REMIC (the "REMIC Reporting Agent"). The
Trustee shall make an election to treat the Trust Fund as a REMIC (which
election shall apply to the taxable period ending December 31, 2000 and each
calendar year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe. The Trustee shall sign all tax information returns
filed pursuant to this Section and any other returns as may be required by the
Code. The Holder of the Class R Certificate is hereby designated as the "Tax
Matters Person" (within the meaning of Treas. Reg. ss.ss.1.860F-4(d)) for the
REMIC. 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 the REMIC 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.

                                      IX-8

<PAGE>

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

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

         (f) The Trustee agrees 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 breach of the Trustee's covenants set forth in this Section 9.12.

                                      IX-9

<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 and the Trustee
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 through and including the last day of the month of
         repurchase, plus (b) the appraised value of any related REO Property,
         less the good faith estimate of the Seller of liquidation expenses to
         be incurred in connection with its disposal thereof (but not more than
         the Outstanding Principal Balance of the related Mortgage Loan,
         together with interest at the applicable Mortgage Interest Rate accrued
         on that balance but unpaid through and including the last day of the
         month of repurchase), such appraisal to be calculated by an appraiser
         mutually agreed upon by the Seller and the Trustee at the expense of
         the Seller; or

                  (ii) 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, living on the date of this Agreement.

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

         (d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Rating Agencies, upon which the
Certificateholders shall surrender their Certificates to the

                                       X-1

<PAGE>

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 the REMIC.

         Upon the presentation and surrender of the Certificates, the Trustee
shall distribute an amount equal to (i) the amount otherwise distributable to
the Certificateholders (other than the holder of the Residual Certificates) on
such Distribution Date but for such repurchase, (ii) the Current Principal
Amount and any accrued but unpaid interest at the Pass-Through Rate to the
Certificateholders of each Class, and (iii) the remainder to the Class R
Certificateholder. If the Available Funds are not sufficient to pay all of the
related Certificates in full, any such deficiency will be allocated to the
outstanding Class or Classes of Subordinate Certificates having the highest
numerical designation or, if after the Cross-Over Date, to the Senior
Certificates pro rata. 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 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

                                       X-2

<PAGE>

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 REMIC shall be terminated in accordance with the
following additional requirements, unless the Trustee has been furnished with an
Opinion of Counsel to the effect that the failure of the Trust to comply with
the requirements of this Section 10.02 will not (i) result in the imposition of
taxes on "prohibited transactions" as defined in Section 860F of the Code on the
REMIC or (ii) cause the 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 the REMIC provided to it by the Seller meeting the
         requirements of a "Qualified Liquidation" under Section 860F of the
         Code and any regulations thereunder.

                  (ii) at or after the time of adoption of such a plan of
         complete liquidation of the REMIC and at or prior to the final
         Distribution Date, the Trustee shall sell for cash all of the assets of
         the REMIC or to or at the direction of the Seller; and

                  (iii) at the time of the making of the final payment on any
         Certificates, the Trustee shall distribute or credit from the
         Certificate Account (or cause to be distributed or credited) (i) to the
         Certificateholders, other than the Holder of the corresponding Residual
         Certificates, the Current Principal Amount of the Certificates plus 30
         days' interest thereon at the applicable Pass-Through Rate, and (ii) to
         the corresponding Residual Certificateholder, all cash on hand from the
         Certificate Account (other than cash retained to meet claims); and the
         REMIC shall terminate at such time.

         (b) By their acceptance of the Residual Certificates, the Holders
thereof hereby (i) agree to adopt such a plan of complete liquidation of 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 appropriate statement on the final
tax return of the REMIC. Upon complete liquidation or final distribution of all
of the assets of the Trust Fund, the REMIC shall terminate.

                                       X-3

<PAGE>

                                   ARTICLE XI

                            Miscellaneous Provisions

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

         Section 11.02. AMENDMENT. (a) This Agreement may be amended from time
to time by the Seller 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 that may be defective or
inconsistent with any other provisions herein, to comply with any changes in the
Code or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this Agreement; PROVIDED, HOWEVER, that such action shall not, as evidenced
by an Opinion of Independent Counsel, adversely affect in any material respect
the interests of any Certificateholder.

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

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

         (d) In the case of an amendment under Subsection 11.02(b) above, it
shall not be necessary for the Certificateholders to approve the particular form
of such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.

                                      XI-1

<PAGE>

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

         Section 11.03. RECORDATION OF AGREEMENT. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Seller shall
effect such recordation, at the expense of the Trust upon the request in writing
of a Certificateholder, but only if such direction is accompanied by an Opinion
of Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.

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

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

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

         (d) No one or more Certificateholders shall have any right by virtue of
any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.04,

                                      XI-2

<PAGE>

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

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

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

         (c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the 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 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 Seller, the Master Servicer or any
Affiliate thereof shall be disregarded, except as otherwise provided in Section
11.02(b) and except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Certificates which the Trustee knows to be so owned
shall be so disregarded. Certificates which have been pledged in good faith to
the Trustee, the 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 Seller, or the Master
Servicer, as the case may be.

                                      XI-3

<PAGE>

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

         Section 11.07. NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (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 with a copy to 11000 Broken Land Parkway,
Columbia, Maryland 21044 (Attention: SAMI 00-2), or such other address as may
hereafter be furnished to the other parties hereto in writing; or (iii) in the
case of the Rating Agencies, Fitch, Inc., One State Street Plaza, 32nd Floor,
New York, New York 10004 and Standard & Poor's, a division of the McGraw-Hill
Companies, Inc., 26 Broadway, New York, New York, 10004, Attention: Residential
Mortgage Surveillance. Any notice delivered to the Seller, the Master Servicer
or the Trustee under this Agreement shall be effective only upon receipt. Any
notice required or permitted to be mailed to a Certificateholder, unless
otherwise provided herein, shall be given by first-class mail, postage prepaid,
at the address of such Certificateholder as shown in the Certificate Register.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice.

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

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

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

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

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

                                      XI-4

<PAGE>

         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 or the
                  Trustee;

         4.       The repurchase or substitution of Mortgage Loans;

         5.       The final payment to Certificateholders; and

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

                                      XI-5

<PAGE>

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

                                       STRUCTURED ASSET MORTGAGE
                                       INVESTMENTS INC., as Seller

                                       By:
                                          ------------------------------------
                                          Name:       Joseph T. Jurkowski, Jr.
                                          Title:      Vice President

                                       WELLS FARGO BANK MINNESOTA, NATIONAL
                                          ASSOCIATION, as Trustee

                                       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 November, 2000 before me, a notary public in and for
said State, personally appeared Joseph T. Jurkowski, known to me to be a Vice
President of Structured Asset Mortgage Investments Inc., the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

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

<PAGE>

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

         On the 30th day of November, 2000 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 November, 2000 before me, a notary public in and for
said State, personally appeared ______________________, known to me to be a
____________________ of EMC Mortgage Corporation, the corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

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

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

<PAGE>

                                                                     EXHIBIT A-1

                        FORM OF CLASS [A-___]CERTIFICATE

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

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

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

                                       A-1

<PAGE>

Certificate No. __                   Variable Pass-Through Rate

Class [A-___] Senior

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

First Distribution Date:             Initial Current Principal Amount of this
December 26, 2000                    Certificate as of the Cut-off Date:
                                     $___________________

Master Servicer:
First Republic Bank

Assumed Final Distribution Date:     CUSIP __________
November 25, 2030

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2000-2

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

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

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

                                       A-2

<PAGE>

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

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

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

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

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

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

                                       A-3

<PAGE>

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

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

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

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

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

                                       A-4

<PAGE>

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

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

                                       A-5

<PAGE>

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

Dated: November 30, 2000               WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION
                                       Not in its individual capacity but solely
                                       as Trustee

                                       By:______________________________________
                                                Authorized Signatory

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

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

                                       WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION
                                       Authorized signatory of Wells Fargo Bank
                                       Minnesota, National Association, not
                                       in its individual capacity but solely
                                       as Trustee

                                       By:______________________________________
                                                Authorized Signatory

                                       A-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

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

________________________________________________________________________________

________________________________________________________________________________

Dated:                     _____________________________________________________
                                    Signature by or on behalf of assignor

                                       _________________________________________
                                               Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

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

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

<PAGE>

                                                                     EXHIBIT A-2

                        FORM OF CLASS [B-__] CERTIFICATE

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

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

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

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

                                      A-2-1

<PAGE>

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

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

                                      A-2-2

<PAGE>

Certificate No. 1                  Variable Pass-Through Rate

Class [B-__]

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

First Distribution Date:           Initial Current Principal Amount of this
December 26, 2000                  Certificate as of the Cut-off Date: $________

Master Servicer:
First Republic Bank

Assumed Final Distribution         CUSIP __________
Date:  November 25, 2030

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2000-2

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

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

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

                                      A-2-3

<PAGE>

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

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

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

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

          This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"), issued in ten
Classes. The Certificates, in the aggregate,

                                      A-2-4

<PAGE>

evidence the entire beneficial ownership interest in the Trust Fund formed
pursuant to the Agreement.

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

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

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

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

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

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

                                      A-2-5

<PAGE>

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

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

                                      A-2-6

<PAGE>

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

Dated: November 30, 2000               WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION
                                       Not in its individual capacity but solely
                                       as Trustee

                                       By:______________________________________
                                                Authorized Signatory

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

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

                                       WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION

                                       Authorized signatory of Wells Fargo Bank
                                       Minnesota, National Association, not in
                                       its individual capacity but solely as
                                       Trustee

                                       By:______________________________________
                                                  Authorized Signatory

                                      A-2-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

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

________________________________________________________________________________
________________________________________________________________________________

Dated:                     _____________________________________________________
                                    Signature by or on behalf of assignor

                                           _____________________________________
                                                     Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS
                            -------------------------

          The assignee should include the following for purposes of
distribution:

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

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

                                      A-2-8

<PAGE>

                                                                     EXHIBIT A-3

                           FORM OF CLASS R CERTIFICATE

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

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

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

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

                                      A-3-1

<PAGE>

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

                                      A-3-2

<PAGE>

Certificate No. 1                    Variable Pass-Through Rate

Class R Senior

Date of Pooling and Servicing        Aggregate Initial Current Principal
Agreement and Cut-off Date:          Amount of this Certificate as of the
November 1, 2000                     Cut-off Date:  $100.00

First Distribution Date:             Initial Current Principal Amount of this
December 26, 2000                    Certificate as of the Cut-off Date: $100.00

Master Servicer:
First Republic Bank

Assumed Final Distribution           CUSIP __________
Date:  November 25, 2030

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2000-2

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

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

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

                                      A-3-3

<PAGE>

to the Pooling and Servicing Agreement dated as of the Cut-off Date specified
above (the "Agreement"), between SAMI, as seller (the "Seller") and Wells Fargo
Bank Minnesota, National Association, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, capitalized terms used herein shall have the meaning
ascribed to them in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of its acceptance hereof
assents and by which such Holder is bound.

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

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

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

                                      A-3-4

<PAGE>

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

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

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

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

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

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

                                      A-3-5

<PAGE>

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

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

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

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

                                      A-3-6

<PAGE>

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

Dated: November 30, 2000           WELLS FARGO BANK MINNESOTA,
                                            NATIONAL ASSOCIATION
                                   Not in its individual capacity but solely
                                   as Trustee

                                   By:_____________________________________
                                            Authorized Signatory

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

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

                                          WELLS FARGO BANK MINNESOTA,
                                              NATIONAL ASSOCIATION
                                    Authorized signatory of Wells Fargo Bank
                                    Minnesota, National Association, not in its
                                    individual capacity but solely as Trustee

                                    By:________________________________________
                                                  Authorized Signatory

                                      A-3-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

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

Dated:                     _____________________________________________________
                                    Signature by or on behalf of assignor

                                       _________________________________________
                                                   Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

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

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

                                      A-3-8

<PAGE>

                                                                     EXHIBIT A-4

                          FORM OF CLASS XP CERTIFICATE

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

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

                                      A-4-1

<PAGE>

Certificate No.                   : __
Cut-off Date                      : With respect to any Mortgage Loan, the
                                    later of (i) the date of origination of
                                    such Mortgage Loan or (ii) November 1, 2000

First Distribution Date           : December 26, 2000

Initial Certificate Principal
Balance of this Certificate
("Denomination")                  : $100.00

Original Class Certificate
Principal Balance of this Class   : $100.00

Percentage Interest               : 100.00%

Class                             : XP

                                      A-4-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2000-2
                                    Class XP

     evidencing the Percentage  Interest in the distributions  allocable to
     the  Certificates  of the  above-referenced  Class with respect to the
     Trust  consisting of first lien,  adjustable  rate mortgage loans (the
     "Mortgage Loans")

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class XP
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class XP
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Structured Asset Mortgage Investments Inc., the Master
Servicer, or the Trustee referred to below or any of their respective
affiliates.

     This certifies that _________________ is the registered owner of the
Percentage Interest evidenced by this Class XP Certificate (obtained by dividing
the Denomination of this Class XP Certificate by the Original Class Certificate
Principal Balance) in certain distributions with respect to a Trust consisting
primarily of the Mortgage Loans deposited by Structured Asset Mortgage
Investments Inc. (the "Company"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of November 1, 2000 (the "Agreement") between
the Company and Wells Fargo Bank Minnesota, National Association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class XP Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class XP Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.

     This Certificate does not have a pass-through rate and will be entitled to
distributions only to the extent set forth in the Agreement.

     No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Company in writing the facts surrounding the
transfer. In the event that such a transfer is not to be made pursuant to Rule
144A of the Act, there shall be delivered to the Trustee and the Company of an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Act, which Opinion of Counsel shall not be obtained at the expense of the
Trustee, the Master Servicer or the Company; or there shall be delivered to the
Trustee and the Company a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Company against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.

                                      A-4-3

<PAGE>

     No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.

     Reference is hereby made to the further provisions of this Class XP
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

     This Class XP Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                      A-4-4

<PAGE>

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

Dated:  November 30, 2000                   WELLS FARGO BANK MINNESOTA, NATIONAL
                                            ASSOCIATION
                                            as Trustee

                                            By:_________________________________
                                            Authorized Signatory

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

     This is one of the Class XP Certificates referred to in the within-
mentioned Agreement.

                                            WELLS FARGO BANK MINNESOTA, NATIONAL
                                            ASSOCIATION
                                            as Trustee

                                            By:_________________________________
                                            Authorized Signatory

                                      A-4-5

<PAGE>

                        [Reverse of Class XP Certificate]

                          Bear Stearns ARM Trust 2000-2
                       Mortgage Pass-Through Certificates,
                                  Series 2000-2

     This Certificate is one of a duly authorized issue of Certificates
designated as Bear Stearns ARM Trust, Mortgage Pass-Through Certificates, Series
2000-2 (herein collectively called the "Certificates"), and representing a
beneficial ownership interest in the Trust created by the Agreement.

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

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

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

<PAGE>

     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

     No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Company, the Master Servicer and the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Trustee nor any such agent shall be affected by any notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Company may purchase, in whole, from the Trust the Mortgage Loans at a purchase
price determined as provided in the Agreement. In the event that no such
optional termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the Trustee upon the earliest of (i) the
Distribution Date on which the Certificate Principal Balances of the Regular
Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in November 2030.

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.

                                      A-4-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
      (Please print or typewrite name and address including postal zip code
                                  of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

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

Dated:________________

                                         _____________________________________
                                         Signature by or on behalf of assignor

                                      A-4-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

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

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

                                      A-4-9

<PAGE>

                                                                       EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

          The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:

(a)  the loan number;

(b)  the Mortgagor's name;

(c)  the street address (including city, state and zip code) of the Mortgaged
     Property;

(d)  the property type;

(e)  the Mortgage Rate;

(f)  the Master Servicing Rate;

(g)  the Net Rate;

(h)  the original term;

(i)  the maturity date;

(j)  the stated remaining term to maturity;

(k)  the original principal balance;

(l)  the first payment date;

(m)  the principal and interest payment in effect as of the Cut-off Date;

(n)  the unpaid principal balance as of the Cut-off Date;

(o)  the Loan-to-Value Ratio at origination;

(p)  paid-through date;

(q)  the insurer of any Primary Mortgage Insurance Policy;

(r)  the Mortgage Loan Group;

(s)  the Gross Margin, if applicable;

(t)  the Maximum Lifetime Mortgage Rate, if applicable;

                                       B-1

<PAGE>

(u)  the Minimum Lifetime Mortgage Rate, if applicable;

(v)  the Periodic Rate Cap, if applicable; and

(w)  the number of days delinquent, if any.

Such schedule also shall set forth for all of the Mortgage Loans, the total
number of Mortgage Loans, the total of each of the amounts described under (xi)
and (xiv) above, the weighted average by principal balance as of the Cut-off
Date of each of the rates described under (v), (vi) and (vii) above, and the
weighted average remaining term to maturity by unpaid principal balance as of
the Cut-off Date.

                                       B-2

<PAGE>

                                                                       EXHIBIT C

                      REPRESENTATIONS AND WARRANTIES OF EMC
                          CONCERNING THE MORTGAGE LOANS

               [SEE SECTION 8 OF MORTGAGE LOAN PURCHASE AGREEMENT]

                                       C-1

<PAGE>

                                                                       EXHIBIT D

                        REQUEST FOR RELEASE OF DOCUMENTS

To:  Wells Fargo Bank Minnesota, National Association
     1015 10th Avenue S.E.
     Minneapolis, MN 55414

RE:  Pooling and Servicing Agreement dated as of
     November 1, 2000, between SAMI
     and Wells Fargo Bank Minnesota,
     National Association as Trustee

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

MORTGAGE LOAN NUMBER:

MORTGAGOR NAME, ADDRESS & ZIP CODE:

REASON FOR REQUESTING DOCUMENTS (CHECK ONE):

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

_______    2.   Foreclosure

_______    3.   Substitution

_______    4.   Other Liquidation

_______    5.   Nonliquidation            Reason: _____________________________

_______    6.   California Mortgage Loan paid in full

                                          By:__________________________________
                                                       (authorized signer)

                                              Issuer:__________________________
                                              Address:_________________________

                                              Date:____________________________

                                       D-1

<PAGE>

                                                                      EXHIBIT E

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

STATE OF          )
                  )ss:
COUNTY OF         )

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

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

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

     3. That the Investor is one of the following: (i) a citizen or resident of
the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for federal income tax purposes) created
or organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), provided that no partnership or other entity treated
as a partnership for United States federal income tax purposes shall be treated
as a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are United States Persons, (iii) an
estate whose income is subject to United States federal income tax regardless of
its source, or (iv) a trust other than a "foreign trust," as defined in Section
7701 (a)(31) of the Code.

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

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

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

                                       E-1

<PAGE>

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

     IN WITNESS WHEREOF, the Investor has caused this instrument to be executed
on its behalf, pursuant to authority of its Board of Directors, by its [Title of
Officer] this ____ day of __________, 20_.

                          [NAME OF INVESTOR]

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

                             Address of Investor for receipt of tax information:

                                       E-2

<PAGE>

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

     Subscribed and sworn before me this ___ day of _____________, 20__.

NOTARY PUBLIC

COUNTY OF

STATE OF

My commission expires the ___ day of _____________, 20__.

                                       E-3

<PAGE>

                                                                     EXHIBIT F-1

                            FORM OF INVESTMENT LETTER

                                                                          [Date]
[SELLER]

Wells Fargo Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044

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

     Re:  SAMI Series 2000-2 Mortgage Pass-Through Certificates (the
          "Certificates"), including the [Class XP, Class B-4, Class B-5,
          Class B-6] Certificates (the "Privately Offered Certificates")
          ---------------------------------------------------------------

Dear Ladies and Gentlemen:

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

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

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

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

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

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

                                      F-1-1

<PAGE>

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

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

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

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

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

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

                                      F-1-2

<PAGE>

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

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

                                      F-1-3

<PAGE>

               PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL
               OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT
               LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, PTE
               91-38, PTE 90-1, PTE 95-60, PTE 96-23 OR SECTION 401(C) OF ERISA
               AND THE REGULATIONS TO BE PROMULGATED THEREUNDER AND (II) WILL
               NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY DUTIES ON THE PART OF
               THE SELLER, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE
               DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A
               GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION OR
               AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF A HOLDER
               OF A PRIVATE CERTIFICATE."

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

     Terms not otherwise defined herein shall have the meanings assigned to them
in the Pooling and Servicing Agreement, dated as of November 1, 2000, between
Structured Asset Mortgage Investments Inc. and Wells Fargo Bank Minnesota,
National Association, as Trustee (the "Pooling and Servicing Agreement").

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

Name of Nominee (if any):____________________________

                                      F-1-4

<PAGE>

     IN WITNESS WHEREOF, this document has been executed by the undersigned who
is duly authorized to do so on behalf of the undersigned Eligible Purchaser on
the ____ day of _______, 20_.

                                            Very truly yours,

                                            [PURCHASER]

                                            By:_________________________________
                                                     (Authorized Officer)

                                            [By:________________________________
                                                     Attorney-in-fact]

                                      F-1-5

<PAGE>

                             Nominee Acknowledgment

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

                                            [NAME OF NOMINEE]

                                            By:_________________________________
                                                     (Authorized Officer)

                                            [By:________________________________
                                                     Attorney-in-fact]

                                      F-1-6

<PAGE>

                                                                     EXHIBIT F-2

                FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE

                                                                          [Date]
[SELLER]

Wells Fargo Bank Minnesota, National Association
11000 Broken Land Parkway
Columbia, Maryland 21044

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

            Re:  SAMI Series 2000-2 Mortgage Pass-Through Certificates,
                 Class XP, Class B-4, Class B-5 and Class B-6 Certificates
                 (the "Privately Offered Certificates")
                 ---------------------------------------------------------

Dear Ladies and Gentlemen:

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

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

     Date: ______________ , 20__ (must be on or after the close of its most
     recent fiscal year)

     Amount: $______________ ; and

2.   The dollar amount set forth above is:

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

          (x)  / /  an insurance company as defined in Section 2(13) of the
                    Act1; or

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

                                      F-2-1

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

     The undersigned further certifies that it is purchasing a Privately Offered
Certificate for its own account or for the account of others that independently
qualify as "Qualified Institutional Buyers" as defined in Rule 144A. It is aware
that the sale of the Privately Offered Certificates is being made in reliance on
its continued compliance with Rule 144A. It is aware that the transferor may
rely on the exemption from the provisions of Section 5 of the Act provided by
Rule 144A. The

                                      F-2-2

<PAGE>

undersigned understands that the Privately Offered Certificates may be resold,
pledged or transferred only to (i) a person reasonably believed to be a
Qualified Institutional Buyer that purchases for its own account or for the
account of a Qualified Institutional Buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance in Rule 144A, or (ii) an
institutional "accredited investor," as such term is defined under Rule 501 of
the Act in a transaction that otherwise does not constitute a public offering.

     The undersigned agrees that if at some future time it wishes to dispose of
or exchange any of the Privately Offered Certificates, it will not transfer or
exchange any of the Privately Offered Certificates to a Qualified Institutional
Buyer without first obtaining a Rule 144A and Related Matters Certificate in the
form hereof from the transferee and delivering such certificate to the
addressees hereof. Prior to making any transfer of Privately Offered
Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement, dated as of November 1, 2000, between Structured Asset
Mortgage Investments Inc. and Wells Fargo Bank Minnesota, National Association,
as Trustee, pursuant to Certificates were issued.

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

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

                                      F-2-3

<PAGE>

Name of Nominee (if any):

IN WITNESS WHEREOF, this document has been executed by the undersigned who is
duly authorized to do so on behalf of the undersigned Eligible Purchaser on the
___ day of ________, 20__.
                                     Very truly yours,

                                     [PURCHASER]

                                     By:___________________________________
                                              (Authorized Officer)

                                     [By:__________________________________
                                              Attorney-in-fact]

                                      F-2-4

<PAGE>

                             Nominee Acknowledgment

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

                                         [NAME OF NOMINEE]

                                         By:___________________________________
                                                  (Authorized Officer)

                                         [By:__________________________________
                                                  Attorney-in-fact]

                                      F-2-5

<PAGE>

                                                                       EXHIBIT G

                          FORM OF INITIAL CERTIFICATION

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

            Re: Pooling and Servicing Agreement dated as of November 1,
                2000, between Structured Asset Mortgage Investments
                Inc., as seller and Wells Fargo Bank Minnesota, National
                Association, as trustee, issuing Mortgage Pass-Through
                Certificates, Series 2000-2
                --------------------------------------------------------

Ladies and Gentlemen:

     In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as otherwise
noted on the attached exception report, that as to each Mortgage Loan listed on
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on the attachment hereto) it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: (i) all documents required to be included
in the Mortgage File pursuant to the Pooling and Servicing Agreement are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face, have, where applicable, been executed and relate to such Mortgage
Loan; and (iii) based on examination by it, and only as to such documents, the
information set forth in the Mortgage Loan Schedule as to Mortgagor Name,
original principal balance and loan number respecting such Mortgage Loan is
correct and accurately reflects the information in the Mortgage Loan File.

     The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation that any documents specified in subclauses (iv), (v) and (vii) of
Section 2.01(b) should be included in any Mortgage File. The undersigned makes
no representations as to: (i) the validity, legality, enforceability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.

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

                                           [              ]

                                           By:__________________________________
                                              Name:
                                              Title:

                                       G-1

<PAGE>

                                                                       EXHIBIT H

                           FORM OF FINAL CERTIFICATION

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

[Service]

          Re:  Pooling and Servicing Agreement dated as of November 1,
               2000, among Structured Asset Mortgage Investments Inc., as
               seller and Wells Fargo Bank Minnesota, National Association,
               as trustee, issuing Mortgage Pass-Through Certificates,
               Series 2000-2
               ------------------------------------------------------------

Ladies and Gentlemen:

     In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as
otherwise noted on the attached exception report, that as to each Mortgage
Loan listed on the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or listed on the attachment hereto) it has received the
documents set forth in Section 2.01 and has determined that (i) all
documents required to be included in the Mortgage File pursuant to the
Pooling and Servicing Agreement are in its possession; (ii) such documents
have been reviewed by it and appear regular on their face, have, where
applicable, been executed and relate to such Mortgage Loan; and (iii) based
on examination by it, and only as to such documents, the information set
forth in the Mortgage Loan Schedule as to Mortgagor name, original
principal balance and loan number respecting such Mortgage Loan is correct
and accurately reflects the information in the Mortgage Loan File.

     The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in
the above-referenced Pooling and Servicing Agreement. The undersigned makes
no representation that any documents specified in subclauses (iv), (v) and
(vii) of Section 2.01(b) should be included in any Mortgage File. The
undersigned makes no representations as to: (i) the validity, legality,
enforceability or genuineness of any of the documents contained in each
Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan
Schedule or (ii) the collectability, insurability, effectiveness or
suitability of any such Mortgage Loan.

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

                                          [                           ]

                                          By:___________________________________
                                              Name:
                                              Title:

                                    H-1

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