STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
                                    DEPOSITOR

                       LASALLE BANK NATIONAL ASSOCIATION,
                                     TRUSTEE

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

                                       and

                            EMC MORTGAGE CORPORATION
                               SELLER AND COMPANY

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


                         POOLING AND SERVICING AGREEMENT

                           Dated as of January 1, 2004

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


                  Structured Asset Mortgage Investments II Inc.
            Prime Mortgage Trust, Mortgage Pass-Through Certificates

                                 Series 2004-CL1




<PAGE>



                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                    ARTICLE I
                                   Definitions

                                   ARTICLE II
                          Conveyance of Mortgage Loans;
                        Original Issuance of Certificates
Section 2.01    Conveyance of Mortgage Loans to Trustee.......................42
Section 2.02    Acceptance of Mortgage Loans by Trustee.......................44
Section 2.03    Assignment of Interest in the Mortgage Loan Purchase
                Agreement.....................................................47
Section 2.04    Substitution of Mortgage Loans................................48
Section 2.05    Issuance of Certificates......................................49
Section 2.06    Representations and Warranties Concerning the Depositor.......49

                                   ARTICLE III
                 Administration and Servicing of Mortgage Loans
Section 3.01    Master Servicer...............................................51
Section 3.02    REMIC-Related Covenants.......................................52
Section 3.03    Monitoring of Servicers.......................................52
Section 3.04    Fidelity Bond.................................................53
Section 3.05    Power to Act; Procedures......................................53
Section 3.06    Due-on-Sale Clauses; Assumption Agreements....................54
Section 3.07    Release of Mortgage Files.....................................54
Section 3.08    Documents, Records and Funds in Possession of Master
                Servicer To Be Held for Trustee...............................55
Section 3.09    Standard Hazard Insurance and Flood Insurance Policies........56
Section 3.10    Presentment of Claims and Collection of Proceeds..............56
Section 3.11    Maintenance of the Primary Mortgage Insurance Policies........57
Section 3.12    Trustee to Retain Possession of Certain Insurance Policies
                and Documents.................................................57
Section 3.13    Realization Upon Defaulted Mortgage Loans.....................58
Section 3.14    Compensation for the Master Servicer..........................58
Section 3.15    REO Property..................................................59
Section 3.16    Annual Officer's Certificate as to Compliance.................59
Section 3.17    Annual Independent Accountant's Servicing Report..............60
Section 3.18    Reports Filed with Securities and Exchange Commission.........60
Section 3.19    The Company...................................................61
Section 3.20    UCC...........................................................61
Section 3.21    Optional Purchase of Defaulted Mortgage Loans.................61

                                   ARTICLE IV
                                    Accounts
Section 4.01    Protected Accounts............................................63


                                       -i-

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Section 4.02    Master Servicer Collection Account............................64
Section 4.03    Permitted Withdrawals and Transfers from the Master Servicer
                Collection Account............................................65
Section 4.04    Distribution Account..........................................66
Section 4.05    Permitted Withdrawals and Transfers from the Distribution
                Account.......................................................66

                                    ARTICLE V
                                  Certificates
Section 5.01    Certificates..................................................69
Section 5.02    Registration of Transfer and Exchange of Certificates.........77
Section 5.03    Mutilated, Destroyed, Lost or Stolen Certificates.............80
Section 5.04    Persons Deemed Owners.........................................80
Section 5.05    Transfer Restrictions on Residual Certificates................81
Section 5.06    Restrictions on Transferability of Certificates...............82
Section 5.07    ERISA Restrictions............................................82
Section 5.08    Rule 144A Information.........................................83

                                   ARTICLE VI
                         Payments to Certificateholders
Section 6.01    Distributions on the Certificates.............................85
Section 6.02    Allocation of Losses..........................................89
Section 6.03    Payments......................................................91
Section 6.04    Statements to Certificateholders..............................92
Section 6.05    Monthly Advances..............................................94
Section 6.06    Compensating Interest Payments................................94

                                   ARTICLE VII
                               The Master Servicer
Section 7.01    Liabilities of the Master Servicer............................96
Section 7.02    Merger or Consolidation of the Master Servicer................96
Section 7.03    Indemnification of the Trustee, the Master Servicer and
                the Securities Administrator..................................96
Section 7.04    Limitations on Liability of the Master Servicer and Others....96
Section 7.05    Master Servicer Not to Resign.................................98
Section 7.06    Successor Master Servicer.....................................98
Section 7.07    Sale and Assignment of Master Servicing.......................98

                                  ARTICLE VIII
                                     Default
Section 8.01    Events of Default............................................100
Section 8.02    Trustee to Act; Appointment of Successor.....................101
Section 8.03    Notification to Certificateholders...........................102
Section 8.04    Waiver of Defaults...........................................102
Section 8.05    List of Certificateholders...................................103



                                      -ii-

<PAGE>



                                   ARTICLE IX
             Concerning the Trustee and the Securities Administrator
Section 9.01    Duties of Trustee............................................104
Section 9.02    Certain Matters Affecting the Trustee and the Securities
                Administrator................................................106
Section 9.03    Trustee and Securities Administrator Not Liable for
                Certificates or Mortgage Loans...............................107
Section 9.04    Trustee and Securities Administrator May Own Certificates....108
Section 9.05    Trustee's and Securities Administrator's Fees and Expenses...108
Section 9.06    Eligibility Requirements for Trustee and Securities
                Administrator................................................108
Section 9.07    Insurance....................................................109
Section 9.08    Resignation and Removal of the Trustee and Securities
                Administrator................................................109
Section 9.09    Successor Trustee and Successor Securities Administrator.....110
Section 9.10    Merger or Consolidation of Trustee or Securities
                Administrator................................................111
Section 9.11    Appointment of Co-Trustee or Separate Trustee................111
Section 9.12    Federal Information Returns and Reports to Certificateholders;
                REMIC Administration.........................................112

                                    ARTICLE X
                                   Termination
Section 10.01   Termination Upon Repurchase by the Depositor or its Designee
                or Liquidation of the Mortgage Loans.........................114
Section 10.02   Additional Termination Requirements..........................116

                                   ARTICLE XI
                            Miscellaneous Provisions
Section 11.01   Intent of Parties............................................118
Section 11.02   Amendment....................................................118
Section 11.03   Recordation of Agreement.....................................119
Section 11.04   Limitation on Rights of Certificateholders...................119
Section 11.05   Acts of Certificateholders...................................120
Section 11.06   Governing Law................................................121
Section 11.07   Notices......................................................121
Section 11.08   Severability of Provisions...................................121
Section 11.09   Successors and Assigns.......................................121
Section 11.10   Article and Section Headings.................................122
Section 11.11   Counterparts.................................................122
Section 11.12   Notice to Rating Agencies....................................122


                                    EXHIBITS

Exhibit A-1         -    Form of Class A, Class X and Class PO Certificates
Exhibit A-2         -    Form of Class B Certificates
Exhibit A-3         -    Form of Class R Certificates


                                      -iii-

<PAGE>



Exhibit B           -    Mortgage Loan Schedule
Exhibit C           -    [Reserved]
Exhibit D           -    Request for Release of Documents
Exhibit E           -    Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1         -    Form of Investment Letter
Exhibit F-2         -    Form of Rule 144A and Related Matters Certificate
Exhibit G           -    Form of Custodial Agreement
Exhibit H-1 to H-28 -    Servicing Agreements
Exhibit I           -    Assignment Agreements
Exhibit J           -    Mortgage Loan Purchase Agreement
Exhibit K           -    Schedule of Foreclosure Restricted Loans
Exhibit L           -    Schedule of Section 3.13 Loans
Exhibit M                Schedule of Cash Flow Loans


                                      -iv-

<PAGE>



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

         Pooling and Servicing Agreement dated as of January 1, 2004, among
Structured Asset Mortgage Investments II Inc., a Delaware corporation, as
depositor (the "Depositor"), LaSalle Bank National Association, a national
banking association, not in its individual capacity but solely as trustee (the
"Trustee"), Wells Fargo Bank Minnesota, National Association, as master servicer
(in such capacity, the "Master Servicer") and as securities administrator (in
such capacity, the "Securities Administrator"), and EMC Mortgage Corporation, as
seller (in such capacity, the "Seller") and as company (in such capacity, the
"Company").

                              PRELIMINARY STATEMENT

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

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

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

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

         The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $1,321,312,079.34. The initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance. The Group I
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 $892,545,672.26. The Group II 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 $161,091,154.60. The Group III
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 $267,675,252.48.

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




<PAGE>



                                    ARTICLE I
                                   Definitions

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

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

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

         ACCRUED CERTIFICATE INTEREST: For any Certificate (other than the
Principal Only Certificates) for any Distribution Date, the interest accrued
during the related Interest Accrual Period at the applicable Pass-Through Rate
on the Current Principal Amount, or Notional Amount in the case of any Interest
Only Certificate, of such Certificate immediately prior to such Distribution
Date, 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 from the related Mortgage Loans and, after the Cross-Over
Date, the interest portion of any Realized Losses on the related Mortgage Loans
allocated thereto in accordance with Section 6.02(i) and (ii) in the case of a
Subordinate Certificate, such Certificate's share of any Net Interest Shortfall
from the related Mortgage Loans and the interest portion of any Realized Losses
on the related Mortgage Loans allocated thereto in accordance with Section
6.02(i).

         ADJUSTABLE RATE CERTIFICATES: The Class I-A-2, Class I-A-3, Class
I-A-4, Class II-A-2 and Class II-A-3 Certificates.

         ADJUSTMENT AMOUNT: The amount, if any, by which the Special Hazard Loss
Amount (without giving effect to the deduction of the Adjustment Amount for such
anniversary) exceeds the lesser of (A) an amount calculated by the Seller and
approved by the related Rating Agencies, which amount shall not be less than
$500,000, and (B) the greater of (x) 1.0% (or if greater than 1.0%, the highest
percentage of Mortgage Loans by principal balance secured by Mortgaged
Properties in any California zip code) of the outstanding principal balance of
all the Mortgage Loans on the Distribution Date immediately preceding such
anniversary and (y) twice the outstanding principal balance of the Mortgage Loan
which has the largest outstanding principal balance on the Distribution Date
immediately preceding such anniversary.

         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


                                       -2-

<PAGE>



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.

         ALLIANCE: Alliance Mortgage Company, as successor to First Union
Mortgage Corp., or its successor in interest.

         ALLIANCE SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as
of March 24, 1998, between Norwest Funding, Inc. and First Union Mortgage Corp.,
attached hereto as Exhibit H-1, pursuant to which First Union Mortgage Corp.
agreed to service in accordance with the Wells Fargo Guide.

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

         (a) as to any Distribution Date and amounts distributable pursuant to
clauses (i) and (iv) 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), (iii) 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 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 Class designation in
reduction of their respective Current Principal Amounts in the order of their
numerical Class designations.

         APPLICABLE CREDIT RATING: For any long-term deposit or security, a
credit rating of AAA in the case of each of S&P and Fitch Ratings or Aaa in the
case of Moody's. For any short-term deposit or security, or a rating of F1 in
the case of Fitch Ratings, A-1+ in the case of S&P or P-1 in the case of
Moody's.

         APPLICABLE STATE LAW: For purposes of Section 9.12(d), the Applicable
State Law shall be (a) the law of the State of New York and (b) such other state
law whose applicability shall have been


                                       -3-

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brought to the attention of the Securities Administrator and the Trustee by
either (i) an Opinion of Counsel reasonably acceptable to the Securities
Administrator and the Trustee delivered to it by the Master Servicer or the
Depositor, 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 AGREEMENTS: The Assignment, Assumption and Recognition
Agreements attached hereto as Exhibit I, whereby the Bank of America Servicing
Agreement, Cendant Servicing Agreement, CitiMortgage Servicing Agreement,
Countrywide Servicing Agreement, Morgan Stanley Servicing Agreement and WFHM
Servicing Agreement were assigned to the Trustee for the benefit of the
Certificateholders.

         ASSIGNMENT OF PROPRIETARY LEASE: With respect to a Cooperative Loan,
the assignment of the related Cooperative Lease from the Mortgagor to the
originator of the Cooperative Loan.

         ASSUMED FINAL DISTRIBUTION DATE: February 25, 2034, or if such day is
not a Business Day, the next succeeding Business Day.

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

         AVERAGE LOSS SEVERITY PERCENTAGE: With respect to any Distribution Date
and each Loan Group, the percentage equivalent of a fraction, the numerator of
which is the sum of the Loss Severity Percentages for each Mortgage Loan in such
Loan Group which had a Realized Loss and the denominator of which is the number
of Mortgage Loans in the related Loan Group which had Realized Losses.

         BANK OF AMERICA: Bank of America, N.A., or its successor in interest.

         BANK OF AMERICA SERVICING AGREEMENT: The Flow Mortgage Loan Sale and
Servicing Agreement dated as of March 1, 2003, attached hereto as Exhibit H-2,
as modified by the related Assignment Agreement.

         BANK OF OKLAHOMA: Bank of Oklahoma, N.A., or its successor in interest.

         BANK OF OKLAHOMA SERVICING AGREEMENT: The Mortgage Servicing Contract,
dated as of December 18, 1997, between Norwest Funding, Inc. and Bank of
Oklahoma, attached hereto as Exhibit H-3, pursuant to which Bank of Oklahoma
agreed to service in accordance with the Wells Fargo Guide.

         BANK ONE: Bank One Mortgage Corporation, or its successor in interest.



                                       -4-

<PAGE>



         BANK ONE SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as
of February 19, 1998, between Norwest Funding, Inc. and Bank One, attached
hereto as Exhibit H-4, pursuant to which Bank One agreed to service in
accordance with the Wells Fargo Guide.

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

         BANKRUPTCY COVERAGE TERMINATION DATE: The Distribution Date upon which
the Bankruptcy Loss Amount has been reduced to zero or a negative number (or the
Cross-Over Date, if earlier).

         BANKRUPTCY LOSS AMOUNT: $100,000, minus the aggregate amount of
previous Bankruptcy Losses.

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

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

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

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

         CASH FLOW LOAN: Any Mortgage Loan which was 60 or more days delinquent
as of the Cut- Off Date but which had made at least one Scheduled Payment in the
last three months, as indicated on the schedule attached hereto as Exhibit M.

         CENDANT: Cendant Mortgage Corporation, as successor to Merrill Lynch
Credit Corporation, or its successor in interest.

         CENDANT SERVICING AGREEMENT: The Mortgage Loan Flow Purchase, Sale and
Servicing Agreement, dated as of April 26, 2001, among the Seller, Cendant and
Bishop's Gate Residential Mortgage Trust, attached hereto as Exhibit H-5, as
modified by the related Assignment Agreement.

         CENTRAL NATIONAL: Central National Bank, as successor to Farmers State
Bank and Trust Company, or its successor in interest.

         CENTRAL NATIONAL SERVICING AGREEMENT: The Mortgage Servicing Contract,
dated as of April 29, 1997, between Norwest Funding, Inc. and Farmers State Bank
and Trust Company, attached hereto as Exhibit H-6, pursuant to which Farmers
State Bank and Trust Company agreed to service in accordance with the Wells
Fargo Guide.


                                       -5-

<PAGE>



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

         CERTIFICATE GROUP: The Group I, Group II and Group III Senior
Certificates, as applicable.

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

         CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.

         CERTIFICATEHOLDER: A Holder of a Certificate.

         CHARTER: Charter Bank for Savings, F.S.B., or its successor in
interest.

         CHARTER SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as
of July 16, 1998, between Norwest Funding, Inc. and Charter, attached hereto as
Exhibit H-7, pursuant to which Charter agreed to service in accordance with the
Wells Fargo Guide.

         CHASE: Chase Manhattan Mortgage Corporation, in its own capacity and as
successor to North American Mortgage Company, or its successor in interest.

         CHASE SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as of
October 27, 1999, between Norwest Funding, Inc. and Chase, attached hereto as
Exhibit H-8, pursuant to which Chase agreed to service in accordance with the
Wells Fargo Guide.

         CHEVY CHASE: Chevy Chase Bank, F.S.B., or its successor in interest.

         CHEVY CHASE SERVICING AGREEMENT: The Mortgage Servicing Contract, dated
as of October 27, 1999, between Norwest Funding, Inc. and Chevy Chase, attached
hereto as Exhibit H-9, pursuant to which Chevy Chase agreed to service in
accordance with the Wells Fargo Guide.

         CITIMORTGAGE: CitiMortgage, Inc., as successor to Citicorp Mortgage,
Inc., or its successor in interest.

         CITIMORTGAGE SERVICING AGREEMENT: The Mortgage Loan Purchase and
Servicing Agreement, dated as of August 1, 2003, between the Seller and
CitiMortgage, attached hereto as Exhibit H-10, as modified by the related
Assignment Agreement.

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

         CLASS I-PO CERTIFICATE CASH SHORTFALL: For any Distribution Date, the
difference between (i) principal distributable to the Class I-PO Certificates in
accordance with priority FIFTH of clause (i) under subsection 6.01(a), and (ii)
principal actually distributed to the Class I-PO Certificates after giving
effect to clause (vii) under subsection 6.01(a).


                                       -6-

<PAGE>



         CLASS I-PO CERTIFICATE DEFERRED AMOUNT: As to each Distribution Date
through the Cross-Over Date, the aggregate of all amounts allocable on such
dates to the Class I-PO Certificates in respect of the principal portion of
Realized Losses in respect of Discount Mortgage Loans in Loan Group I and the
Class I-PO Certificate Cash Shortfall and all amounts previously allocated in
respect of such losses and such shortfalls to the Class I-PO Certificates, and
not distributed on prior Distribution Dates.

         CLASS II-PO CERTIFICATE CASH SHORTFALL: For any Distribution Date, the
difference between (i) principal distributable to the Class II-PO Certificates
in accordance with priority FOURTH of clause (ii) under subsection 6.01(a), and
(ii) principal actually distributed to the Class II-PO Certificates after giving
effect to clause (vii) under subsection 6.01(a).

         CLASS II-PO CERTIFICATE DEFERRED AMOUNT: As to each Distribution Date
through the Cross-Over Date, the aggregate of all amounts allocable on such
dates to the Class II-PO Certificates in respect of the principal portion of
Realized Losses in respect of Discount Mortgage Loans in Loan Group II and the
Class II-PO Certificate Cash Shortfall and all amounts previously allocated in
respect of such losses and such shortfalls to the Class II-PO Certificates, and
not distributed on prior Distribution Dates.

         CLASS PO CERTIFICATE CASH SHORTFALL: The Class I-PO Certificate Cash
Shortfall or Class II-PO Certificate Cash Shortfall, as applicable.

         CLASS I-PO CERTIFICATE PRINCIPAL DISTRIBUTION AMOUNT AND CLASS II-PO
CERTIFICATE PRINCIPAL DISTRIBUTION AMOUNT: With respect to the Class I-PO
Certificates and Class II-PO Certificates and each Distribution Date, an amount
equal to the sum, without duplication, of:

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

                  (ii) the applicable PO Percentage of the Scheduled Principal
         Balance of each Discount Mortgage Loan in the related Loan Group which
         was the subject of a prepayment in full received by the related Master
         Servicer during the applicable Prepayment Period;

                  (iii) the applicable PO Percentage of all partial prepayments
         of principal of each Discount Mortgage Loan in the related Loan Group
         received during the applicable Prepayment Period;

                  (iv) the lesser of (a) the applicable PO Percentage of the sum
         of (A) all Net Liquidation Proceeds allocable to principal on each
         Discount Mortgage Loan in the related Loan Group which became a
         Liquidated Mortgage Loan during the related Prepayment Period (other
         than a Discount Mortgage Loan described in clause (B)) and (B) the
         Scheduled Principal Balance of each such Discount Mortgage Loan in the
         related Loan Group purchased by an insurer from the Trustee during the
         related Prepayment Period pursuant to the related


                                       -7-

<PAGE>



         Primary Mortgage Insurance Policy, if any, or otherwise; and (b) the
         applicable PO Percentage of the sum of (A) the Scheduled Principal
         Balance of each Discount Mortgage Loan in the related Loan Group which
         became a Liquidated Mortgage Loan during the related Prepayment Period
         (other than a Discount Mortgage Loan described in clause (B)) and (B)
         the Scheduled Principal Balance of each such Mortgage Loan in the
         related Loan Group that was purchased by an insurer from the Trustee
         during the related Prepayment Period pursuant to the related Primary
         Mortgage Insurance Policy, if any, or otherwise; and

                  (v) the applicable PO Percentage of the sum of (a) the
         Scheduled Principal Balance of each Discount Mortgage Loan in the
         related Loan Group which was repurchased by the Seller in connection
         with such Distribution Date and (b) the difference, if any, between the
         Scheduled Principal Balance of a Discount Mortgage Loan in the related
         Loan Group that has been replaced by the Seller with a substitute
         Discount Mortgage Loan pursuant to the Agreement in connection with
         such Distribution Date and the Scheduled Principal Balance of such
         substitute Discount Mortgage Loan.

         CLASS PO CERTIFICATES: The Class I-PO Certificates and Class II-PO
Certificates, as applicable.

         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 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.

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

         CLOSING DATE: January 30, 2004.

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

         COLONIAL SAVINGS: Colonial Savings, F.A., or its successor in interest.

         COLONIAL SAVINGS SERVICING AGREEMENT: The Mortgage Servicing Contract,
dated as of October 20, 2000, between Wells Fargo Funding, Inc. and Colonial
Savings, attached hereto as Exhibit H-11, pursuant to which Colonial Savings
agreed to service in accordance with the Wells Fargo Guide.

         COLUMBIA: Columbia National, Inc., or its successor in interest.

         COLUMBIA SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as
of August 1, 1997, between Norwest Funding, Inc. and Columbia, attached hereto
as Exhibit H-12, pursuant to which Columbia agreed to service in accordance with
the Wells Fargo Guide.

         COMPENSATING INTEREST PAYMENT: As defined in Section 6.06.



                                       -8-

<PAGE>



         COOPERATIVE: A private, cooperative housing corporation which owns or
leases land and all or part of a building or buildings, including apartments,
spaces used for commercial purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.

         COOPERATIVE APARTMENT: A dwelling unit in a multi-dwelling building
owned or leased by a Cooperative, which unit the Mortgagor has an exclusive
right to occupy pursuant to the terms of a proprietary lease or occupancy
agreement.

         COOPERATIVE LEASE: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.

         COOPERATIVE LOAN: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) an
assignment of the Cooperative Lease, (iv) financing statements and (v) a stock
power (or other similar instrument), and ancillary thereto, a recognition
agreement between the Cooperative and the originator of the Cooperative Loan,
each of which was transferred and assigned to the Trustee pursuant to Section
2.01 and are from time to time held as part of the Trust Fund.

         COOPERATIVE STOCK: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.

         COOPERATIVE STOCK CERTIFICATE: With respect to a Cooperative Loan, the
stock certificate or other instrument evidencing the related Cooperative Stock.

         CORRESPONDING CERTIFICATES: With respect to each REMIC II Regular
Interest, the Class with the same designation.

         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 135 South LaSalle
Street, Suite 1625, Chicago, Illinois 60603, Attention: Global Securitization
Trust Services Group - Prime Mortgage Trust, Series 2004-CL1, or at such other
address as the Trustee may designate from time to time.

         COUNTRYWIDE: Countrywide Home Loans, Servicing LP, as successor to
Countrywide Funding Corporation, or its successor in interest.

         COUNTRYWIDE SERVICING AGREEMENT: The Seller's Warranties and Servicing
Agreement, dated as of September 1, 2002, as amended on January 1, 2003, between
the Seller and Countrywide, attached hereto as Exhibit H-13, as modified by the
related Assignment Agreement.



                                       -9-

<PAGE>



         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).

         CUNA: CUNA Mutual Mortgage Corporation, or its successor in interest.

         CUNA SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as of
November 13, 2000, between Wells Fargo Funding, Inc. and CUNA, attached hereto
as Exhibit H-14, pursuant to which CUNA agreed to service in accordance with the
Wells Fargo Guide.

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

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

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

         CUT-OFF DATE: January 1, 2004.

         CUT-OFF DATE BALANCE: $1,321,312,079.34.

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

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

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


                                      -10-

<PAGE>



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

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

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

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

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

         DISCOUNT FRACTION: With respect to any Group I Discount Mortgage Loan,
a fraction, (x) the numerator of which is equal to 6.750% minus the related Net
Mortgage Rate, and (y) the denominator of which is equal to 6.750% per annum.
With respect to any Group II Discount Mortgage Loan, a fraction, (x) the
numerator of which is equal to 6.500% minus the related Net Mortgage Rate, and
(y) the denominator of which is equal to 6.500% per annum.

         DISCOUNT MORTGAGE LOAN: Any Group I Mortgage Loan with a Net Mortgage
Rate less than 6.750% per annum and any Group II Mortgage Loan with a Net
Mortgage Rate less than 6.500% per annum.

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

         DISTRIBUTION ACCOUNT: The trust account or accounts created and
maintained pursuant to Section 4.04, which shall be denominated "LaSalle Bank
National Association, as Trustee f/b/o holders of Structured Asset Mortgage
Investments II Inc., Prime Mortgage Trust, Mortgage Pass-


                                      -11-
<PAGE>


Through Certificates, Series 2004-CL1 - Distribution Account." The Distribution
Account shall be an Eligible Account.

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

         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.

         DOWNEY: Downey Savings and Loan Association, F.A., or its successor in
interest.

         DOWNEY SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as
of April 23, 1999, between Norwest Funding, Inc. and Downey, attached hereto as
Exhibit H-15, pursuant to which Downey agreed to service in accordance with the
Wells Fargo Guide.

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

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

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

         ELIGIBLE ACCOUNT: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-2 or better by S&P, P-1 by Moody's, and F1 by Fitch Ratings
at the time of any deposit therein or (B) insured by the FDIC (to the limits
established by such Corporation), the uninsured deposits in which account are
otherwise secured such that, as evidenced by an Opinion of Counsel (obtained by
the Person requesting that the account be held pursuant to this clause (i))
delivered to the Trustee prior to the establishment of such account, the
Certificateholders will have a claim with respect to the funds in such account
and a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments, each of which shall mature not later
than the Business Day immediately preceding the Distribution Date next following
the date of investment in such collateral or the Distribution Date if such
Permitted Investment is an obligation of the institution that maintains the
Distribution Account) securing such funds that is superior to claims of any
other depositors or general creditors of the depository institution with which
such account is maintained, (ii) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or trust
company with trust powers acting in its fiduciary capacity or (iii) a segregated
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Distribution Account will not have an adverse effect on the
then-current ratings assigned to the Classes of Certificates then rated by the
Rating Agencies). Eligible Accounts may bear interest.


                                      -12-

<PAGE>



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

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

         EXCESS BANKRUPTCY LOSS: Any Bankruptcy Loss, or portion thereof (i)
occurring after the Bankruptcy Coverage Termination Date or (ii) if on or prior
to such date, in excess of the then- applicable Bankruptcy Loss Amount.

         EXCESS FRAUD LOSS: Any Fraud Loss or portion thereof (i) occurring
after the Fraud Coverage Termination Date with respect thereto or (ii) if on or
prior to such date, in excess of the then- applicable Fraud Loss Amount.

         EXCESS LOSS: Any Excess Fraud Loss, Excess Bankruptcy Loss, Excess
Special Hazard Loss or Extraordinary Loss.

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

         EXCESS SPECIAL HAZARD LOSS: Any Special Hazard Loss occurring after the
Special Hazard Termination Date.

         EXTRAORDINARY LOSS : Any Realized Loss resulting from damage to a
mortgaged property that was occasioned by war, civil insurrection, certain
governmental actions, nuclear reaction and certain other risks.

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

         FITCH RATINGS: Fitch, Inc.

         FDIC: Federal Deposit Insurance Corporation or any successor thereto.

         FIFTH THIRD: Fifth Third Mortgage Company, as successor to Old Kent
Mortgage Company, or its successor in interest.

         FIFTH THIRD SERVICING AGREEMENT: The Mortgage Servicing Contract, dated
as of August 31, 2000, between Wells Fargo Funding, Inc. and Old Kent Mortgage
Company, attached hereto as Exhibit H-16, pursuant to which Old Kent Mortgage
Company agreed to service in accordance with the Wells Fargo Guide.

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



                                      -13-

<PAGE>



         FINAL SCHEDULED DISTRIBUTION DATE: Solely for purposes of the face of
the Certificates, as follows: with respect to the Group II Certificates,
February 25, 2019; with respect to the Group I, Group III, Residual and
Subordinate Certificates, February 25, 2034. No event of default under this
Agreement will arise or become applicable solely by reason of the failure to
retire the entire Current Principal Amounts of the related Class or Classes of
Certificates on or before its Final Scheduled Distribution Date.

         FIRST TENNESSEE: First Tennessee Mortgage Services, Inc., as successor
to FT Mortgage Companies, or its successor in interest.

         FIRST TENNESSEE SERVICING AGREEMENT: The Mortgage Servicing Contract,
dated as of July 15, 1997, between Norwest Funding, Inc. and FT Mortgage
Companies, attached hereto as Exhibit H-17, pursuant to which FT Mortgage
Companies agreed to service in accordance with the Wells Fargo Guide.

         FORECLOSURE RESTRICTED LOAN: Any Mortgage Loan (other than a Cash Flow
Loan) which was 60 days or more delinquent as of the Cut-Off Date, as indicated
on the schedule attached hereto as Exhibit K.

         FRACTIONAL UNDIVIDED INTEREST: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount, or Notional
Amount in the case of the Interest Only Certificates, of such Certificate and
the denominator of which is the Current Principal Amount, or Notional Amount in
the case of the Interest Only Certificates, of such Class. With respect to the
Certificates in the aggregate, the fractional undivided interest evidenced by
(i) each class of Residual Certificates will be deemed to equal 0.25%, (ii) each
Class of Interest Only Certificates will be deemed to equal 1.0% multiplied by a
fraction, the numerator of which is the Notional Amount of such Certificate and
the denominator of which is the aggregate Notional Amount of its respective
Class and (iii) a Certificate of any other Class will be deemed to equal 94.25%
multiplied by a fraction, the numerator of which is the Current Principal Amount
of such Certificate and the denominator of which is the aggregate Current
Principal Amount of all the Certificates; provided, however, the percentage in
clause (iii) above shall be increased by 1.0% upon the retirement of each Class
of Interest Only Certificates.

         FRAUD COVERAGE TERMINATION DATE: The Distribution Date upon which the
Fraud Loss Amount has been reduced to zero or a negative number (or the
Cross-Over Date, if earlier).

         FRAUD LOSS: Any Realized Loss attributable to fraud in the origination
of the related Mortgage Loan, as reported by the applicable Servicer to the
Master Servicer.

         FRAUD LOSS AMOUNT: Upon the initial issuance of the Certificates, 1.00%
of the aggregate Scheduled Principal Balances of the Mortgage Loans. As of any
Distribution Date prior to the second anniversary of the Cut-off Date, the
initial Fraud Loss Amount minus the aggregate amount of Fraud Losses that would
have been allocated to the Subordinate Certificates in the absence of the Loss
Allocation Limit since the Cut-off Date. As of any Distribution Date from the
second and through the fifth anniversary of the Cut-off Date, (1) the lesser of
(a) the applicable Fraud Loss Amount as of the most recent anniversary of the
Cut-off Date and (b) 0.50% of the aggregate outstanding


                                      -14-

<PAGE>



principal balance of all Mortgage Loans as of the most recent anniversary of the
Cut-off Date minus (2) the Fraud Losses that would have been allocated to the
Subordinate Certificates in the absence of the Loss Allocation Limit since the
most recent anniversary of the Cut-off Date. After the fifth anniversary of the
Cut-off Date, the Fraud Loss Amount shall be zero.

         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).

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

         GMAC SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as of
October 31, 1997 between Norwest Funding, Inc. and GMAC, attached hereto as
Exhibit H-18, pursuant to which GMAC agreed to service in accordance with the
Wells Fargo Guide.

         GROUP I AVAILABLE FUNDS, GROUP II AVAILABLE FUNDS AND GROUP III
AVAILABLE FUNDS: With respect to any Distribution Date, an amount equal to the
aggregate of the following amounts with respect to the Mortgage Loans in the
related Loan Group: (a) all previously undistributed payments on account of
principal (including the principal portion of Scheduled Payments, Principal
Prepayments and the principal portion of Net Liquidation Proceeds) and all
previously undistributed payments on account of interest received after the
Cut-off Date and on or prior to the related Determination Date, (b) any Monthly
Advances and Compensating Interest Payments by the Servicers or 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;

                  (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;



                                      -15-

<PAGE>



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

                  (vii) amounts needed to pay the Servicing Fees or to reimburse
any Servicer or the Master Servicer for amounts due under the applicable
Servicing Agreement and the Agreement to the extent such amounts have not been
retained by, or paid previously to, such Servicer or the Master Servicer;

                  (viii) to pay any fees with respect to any lender-paid primary
mortgage insurance policy; and

                  (ix) any expenses or other amounts reimbursable to the
Trustee, the Securities Administrator and the Custodian pursuant to Section
7.04(c) or Section 9.05.

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

         GROUP I SENIOR CERTIFICATES: The Class I-A-1, Class I-A-2, Class I-A-3,
Class I-A-4, Class I-X, Class I-PO, Class R-I, Class R-II and Class R-III
Certificates.

         GROUP I SENIOR OPTIMAL PRINCIPAL AMOUNT, GROUP II SENIOR OPTIMAL
PRINCIPAL AMOUNT AND GROUP III SENIOR OPTIMAL PRINCIPAL AMOUNT: With respect to
each Distribution Date, an amount equal to the sum, without duplication, of the
following (but in no event greater than the aggregate Current Principal Amount
of the Group I, Group II or Group III Senior Certificates (other than the
Interest Only Certificates and Principal Only Certificates), as applicable,
immediately prior to such Distribution Date):

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

                  (2) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of the Scheduled Principal Balance of each Mortgage
Loan in the related Loan Group which was the subject of a Principal Prepayment
in full received by the Master Servicer during the related Prepayment Period;

                  (3) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of all Principal Prepayments in part received by
the Master Servicer during the related Prepayment Period with respect to each
Mortgage Loan in the related Loan Group;

                  (4) the lesser of (a) the applicable Senior Prepayment
Percentage of the applicable Non-PO Percentage of the sum of (A) all Net
Liquidation Proceeds allocable to principal received


                                      -16-

<PAGE>



in respect of each Mortgage Loan in the related Loan Group which became a
Liquidated Mortgage Loan during the related Prepayment Period (other than
Mortgage Loans described in the immediately following clause (B)) and (B) the
Scheduled Principal Balance of each such Mortgage Loan in the related Loan Group
purchased by an insurer from the Trustee during the related Prepayment Period
pursuant to the related Primary Mortgage Insurance Policy, if any, or otherwise;
and (b) the applicable Senior Percentage of the applicable Non-PO Percentage of
the sum of (A) the Scheduled Principal Balance of each Mortgage Loan in the
related Loan Group which became a Liquidated Mortgage Loan during the related
Prepayment Period (other than the Mortgage Loans described in the immediately
following clause (B)) and (B) the Scheduled Principal Balance of each such
Mortgage Loan in the related Loan Group that was purchased by an insurer from
the Trust during the related Prepayment Period pursuant to the related Primary
Mortgage Insurance Policy, if any or otherwise; and

                  (5) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of the sum of (a) the Scheduled Principal Balance
of each Mortgage Loan in the related Loan Group which was repurchased by the
Seller in connection with such Distribution Date and (b) the excess, if any, of
the Scheduled Principal Balance of a Mortgage Loan in the related Loan Group
that has been replaced by the Seller with a substitute Mortgage Loan pursuant to
the Mortgage Loan Purchase Agreement in connection with such Distribution Date
over the Scheduled Principal Balance of such substitute Mortgage Loan.

         GROUP I SENIOR PERCENTAGE: Initially, 97.42%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group I
Senior Certificates (other than the Principal Only Certificates) immediately
preceding such Distribution Date by the aggregate Scheduled Principal Balance of
the Group I Mortgage Loans (other than the PO Percentage thereof with respect to
the related Discount Mortgage Loans) of the beginning of the related Due Period.

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


Period (dates inclusive)                   Group I Senior Prepayment Percentage
--------------------------------------------------------------------------------
February 25, 2004 - January 25, 2009       100%
February 25, 2009 - January 25, 2010       Group I Senior Percentage plus 70% of
                                           the Group I Subordinate Percentage
February 25, 2010 - January 25, 2011       Group I Senior Percentage plus 60% of
                                           the Group I Subordinate Percentage
February 25, 2011 - January 25, 2012       Group I Senior Percentage plus 40% of
                                           the Group I Subordinate Percentage
February 25, 2012 - January 25, 2013       Group I Senior Percentage plus 20% of
                                           the Group I Subordinate Percentage
February 25, 2013 and thereafter           Group I Senior Percentage

         In addition, no reduction of the Group I Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the


                                      -17-

<PAGE>



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%; and (B) 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 February 2009 and
January 2010, (b) 35% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including February 2010 and January 2011,
(c) 40% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including February 2011 and January 2012, (d) 45% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including February 2012 and January 2013, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
February 2013.

         Notwithstanding the foregoing, if on any Distribution Date, the Group I
Senior Percentage exceeds the Group I Senior Percentage as of the Cut-off Date,
then the Group I Senior Prepayment Percentage with respect to the Group I Senior
Certificates for such Distribution Date will equal 100%.

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

         GROUP I SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group I
Mortgage Loans, on any Distribution Date, 100% minus the Group I Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group I Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (b) 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 100%, the Group I
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group I Senior Certificates have each been reduced to
zero, then the Group I Subordinate Prepayment Percentage will equal zero for
such Distribution Date.

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

         GROUP II SENIOR CERTIFICATES: Class II-A-1, Class II-A-2, Class II-A-3,
Class II-X and Class II-PO Certificates.

         GROUP II SENIOR PERCENTAGE: Initially, 97.41%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group II Senior Certificates (other than the Principal Only


                                      -18-

<PAGE>



Certificates) immediately preceding such Distribution Date by the aggregate
Scheduled Principal Balance of the Group II Mortgage Loans (other than the PO
Percentage thereof with respect to the related Discount Mortgage Loans) of the
beginning of the related Due Period.

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


Period (dates inclusive)                  Group II Senior Prepayment Percentage
--------------------------------------------------------------------------------
February 25, 2004 - January 25, 2009      100%
February 25, 2009 - January 25, 2010      Group II Senior Percentage plus 70% of
                                          the Group II Subordinate Percentage
February 25, 2010 - January 25, 2011      Group II Senior Percentage plus 60% of
                                          the Group II Subordinate Percentage
February 25, 2011 - January 25, 2012      Group II Senior Percentage plus 40% of
                                          the Group II Subordinate Percentage
February 25, 2012 - January 25, 2013      Group II Senior Percentage plus 20% of
                                          the Group II Subordinate Percentage
February 25, 2013 and thereafter          Group II Senior Percentage

         In addition, no reduction of the Group II Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (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 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 (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2009 and January 2010, (b) 35% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
February 2010 and January 2011, (c) 40% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including February 2011 and
January 2012, (d) 45% of the Original Subordinate Principal Balance if such
Distribution Date occurs between and including February 2012 and January 2013,
and (e) 50% of the Original Subordinate Principal Balance if such Distribution
Date occurs during or after February 2013.

         Notwithstanding the foregoing, if on any Distribution Date, the Group
II Senior Percentage exceeds the Group II Senior Percentage as of the Cut-off
Date, then the Group II Senior Prepayment Percentage with respect to the Group
II Senior Certificates for such Distribution Date will equal 100%.

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

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


                                      -19-

<PAGE>



any Distribution Date after the Current Principal Amounts of the Group II Senior
Certificates have each been reduced to zero, if (a) the weighted average of the
Subordinate Percentages on such Distribution Date equals or exceeds two times
the initial weighted average of the Subordinate Percentages and (b) 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 100%, the Group II Subordinate Prepayment
Percentage will equal 100%. If the test set forth in the preceding sentence is
not satisfied on any Distribution Date after the Current Principal Amount of the
Group II Senior Certificates have each been reduced to zero, then the Group II
Subordinate Prepayment Percentage will equal zero for such Distribution Date.

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

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

         GROUP III SENIOR PERCENTAGE: Initially, 97.45%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group III Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group III Mortgage Loans of the
beginning of the related Due Period.

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


Period (dates inclusive)                 Group III Senior Prepayment Percentage
--------------------------------------------------------------------------------
February 25, 2004 - January 25, 2009     100%
February 25, 2009 - January 25, 2010     Group III Senior Percentage plus 70% of
                                         the Group III Subordinate Percentage
February 25, 2010 - January 25, 2011     Group III Senior Percentage plus 60% of
                                         the Group III Subordinate Percentage
February 25, 2011 - January 25, 2012     Group III Senior Percentage plus 40% of
                                         the Group III Subordinate Percentage
February 25, 2012 - January 25, 2013     Group III Senior Percentage plus 20% of
                                         the Group III Subordinate Percentage
February 25, 2013 and thereafter         Group III Senior Percentage

         In addition, no reduction of the Group III Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (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 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


                                      -20-

<PAGE>



does not exceed 50%; and (B) 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 February 2009 and January 2010,
(b) 35% of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including February 2010 and January 2011, (c) 40% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including February 2011 and January 2012, (d) 45% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2012 and January 2013, and (e) 50% of the Original
Subordinate Principal Balance if such Distribution Date occurs during or after
February 2013.

         Notwithstanding the foregoing, if on any Distribution Date, the Group
III Senior Percentage exceeds the Group III Senior Percentage as of the Cut-off
Date, then the Group III Senior Prepayment Percentage with respect to the Group
III Senior Certificates for such Distribution Date will equal 100%.

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

         GROUP III SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
III Mortgage Loans, on any Distribution Date, 100% minus the Group III Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group III Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (b) 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 100%, the Group III
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group III Senior Certificates have each been reduced to
zero, then the Group III Subordinate Prepayment Percentage will equal zero for
such Distribution Date.

         HIBERNIA: Hibernia National Bank, or its successor in interest.

         HIBERNIA SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as
of April 20, 1998 between Norwest Funding, Inc. and Hibernia, attached hereto as
Exhibit H-19, pursuant to which Hibernia agreed to service in accordance with
the Wells Fargo Guide.

         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 Depositor, 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.


                                      -21-

<PAGE>



         HSBC: HSBC Mortgage Corporation (USA), as successor to Marine Midland
Mortgage Corporation, or its successor in interest.

         HSBC SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as of
April 6, 1998 between Norwest Funding, Inc. and Marine Midland Mortgage
Corporation, attached hereto as Exhibit H-20, pursuant to which Marine Midland
Mortgage Corporation agreed to service in accordance with the Wells Fargo Guide.

         HUNTINGTON: Huntington Mortgage Company, or its successor in interest.

         HUNTINGTON SERVICING AGREEMENT: The Mortgage Servicing Contract, dated
as of May 12, 1997 between Norwest Funding, Inc. and Huntington, attached hereto
as Exhibit H-21, pursuant to which Huntington agreed to service in accordance
with the Wells Fargo Guide.

         INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the Custodian
and the Securities Administrator and their officers, directors, agents and
employees and, with respect to the Trustee, any separate 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 Depositor or the Master
Servicer and of any Affiliate of the Depositor or the Master Servicer, (b) does
not have any direct financial interest or any material indirect financial
interest in the Depositor or the Master Servicer or any Affiliate of the
Depositor or the Master Servicer and (c) is not connected with the Depositor 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.

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

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

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

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

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


                                      -22-

<PAGE>



I-A-2, Class I-A-3, Class I-A-4, Class II-A-2 and Class II-A-3 Certificates
which have an interest accrual period beginning on the 25th day of the month
preceding the month in which the Distribution Date occurs and ending on the 24th
day of the month in which the Distribution Date occurs, in each case commencing
in January 2004.

         INTEREST DETERMINATION DATE: With respect to each Distribution Date,
the second LIBOR Business Day immediately preceding the commencement of the
related Interest Accrual Period.

         INTEREST ONLY CERTIFICATES: The Class I-A-3, Class I-A-4, Class I-X,
Class II-A-3 and Class II-X Certificates.

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

         (a) Partial principal prepayments received during the relevant
Prepayment Period: The difference between (i) one month's interest at the
applicable Net Mortgage 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 Mortgage 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 Mortgage 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 Mortgage
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 Mortgage 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 Mortgage Rate required to be paid
by the Mortgagor as limited by application of the Relief Act.

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

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

         LIBOR: With respect to any Distribution Date, the arithmetic mean of
the London interbank offered rate quotations for one-month U.S. Dollar deposits,
expressed on a per annum basis, determined in accordance with Section 1.02.



                                      -23-

<PAGE>



         LIBOR BUSINESS DAY: Any day other than (i) a Saturday or Sunday or (ii)
a day on which banking institutions in London, England and New York City are
required or authorized to by law to be closed.

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

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

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

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

         LOAN GROUP: Loan Group I, Loan Group II or Loan Group III, as
applicable.

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

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

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

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

         LOSS ALLOCATION LIMIT: The meaning specified in Section 6.02(e) hereof.

         LOSS SEVERITY PERCENTAGE: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the amount of
Realized Losses incurred on a Mortgage Loan and the denominator of which is the
Scheduled Principal Balance of such Mortgage Loan immediately prior to the
liquidation of such Mortgage Loan.



                                      -24-

<PAGE>



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

         MASTER SERVICER: As of the Closing Date, Wells Fargo Bank Minnesota,
National Association and, thereafter, its respective successors in interest who
meet the qualifications of the Servicing Agreements and this Agreement.

         MASTER SERVICER CERTIFICATION: A written certification covering
servicing of the Mortgage Loans by all Servicers and signed by an officer of the
Master Servicer that complies with (i) the Sarbanes-Oxley Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the Staff
of the Division of Corporation Finance of the Securities and Exchange Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the Closing Date
(a) the Sarbanes-Oxley Act of 2002 is amended, (b) the Statement referred to in
clause (ii) is modified or superceded by any subsequent statement, rule or
regulation of the Securities and Exchange Commission or any statement of a
division thereof, or (c) any future releases, rules and regulations are
published by the Securities and Exchange Commission from time to time pursuant
to the Sarbanes-Oxley Act of 2002, which in any such case affects the form or
substance of the required certification and results in the required
certification being, in the reasonable judgment of the Master Servicer,
materially more onerous than the form of the required certification as of the
Closing Date, the Master Servicer Certification shall be as agreed to by the
Master Servicer and the Depositor following a negotiation in good faith to
determine how to comply with any such new requirements.

         MASTER SERVICER COLLECTION ACCOUNT: The trust account or accounts
created and maintained pursuant to Section 4.02, which shall be denominated
"LaSalle Bank National Association, as Trustee f/b/o holders of Structured Asset
Mortgage Investments II Inc., Prime Mortgage Trust, Mortgage Pass-Through
Certificates, Series 2004-CL1 - Master Servicer Collection Account." The Master
Servicer Collection Account shall be an Eligible Account.

         MASTER SERVICING COMPENSATION: The meaning specified in Section 3.14.

         MATERIAL DEFECT: The meaning specified in Section 2.02(a).

         MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

         MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.

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

         MOM LOAN: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof, or as
nominee for any subsequent assignee of the originator pursuant to an assignment
of mortgage to MERS.


                                      -25-

<PAGE>



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

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

         MORGAN STANLEY: Morgan Stanley Dean Witter Credit Corporation, as
successor to NOVUS Financial Corporation, or its successor in interest.

         MORGAN STANLEY SERVICING AGREEMENT: The Master Servicing Agreement,
dated as of January 29, 1999, between Norwest Funding, Inc. and NOVUS Financial
Corporation, attached hereto as Exhibit H-22, as modified by the related
Assignment Agreement.

         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 initially equal to the "Mortgage Interest Rate" set forth with respect
thereto on the Mortgage Loan Schedule.

         MORTGAGE LOAN: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule (which shall include, without
limitation, (i) with respect to each Cooperative Loan, the related Mortgage
Note, Security Agreement, Assignment of Proprietary Lease, Cooperative Stock
Certificate, Cooperative Lease and Mortgage File and all rights appertaining
thereto, and (ii) with respect to each Mortgage Loan other than a Cooperative
Loan, each related Mortgage Note, Mortgage and Mortgage File and all rights
appertaining thereto), including a mortgage loan the property securing which has
become an REO Property.

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of January 30, 2004, between EMC Mortgage Corporation, as seller, and
Structured Asset Mortgage Investments II Inc., as purchaser, and all amendments
thereof and supplements thereto, attached as Exhibit J.

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

         MORTGAGE 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, or, in the case of a Cooperative Loan, the related
Cooperative Lease and Cooperative Stock.



                                      -26-

<PAGE>



         MORTGAGOR: The obligor on a Mortgage Note.

         NAT CITY: National City Mortgage Co., or its successor in interest.

         NAT CITY SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as
of July 28, 1997 between Norwest Funding, Inc. and Nat City, attached hereto as
Exhibit H-23, pursuant to which Nat City agreed to service in accordance with
the Wells Fargo Guide.

         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 related Servicer or the Master Servicer in accordance with the related
Servicing Agreement or this Agreement and (ii) unreimbursed advances by the
related Servicer or the Master Servicer and Monthly Advances.

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

         NON-DISCOUNT MORTGAGE LOAN: Any Group I Mortgage Loan with a Net
Mortgage Rate equal to or greater than 6.750% per annum and any Group II
Mortgage Loan with a Net Mortgage Rate equal to or greater than 6.500% per
annum.

         NON-OFFERED SUBORDINATE CERTIFICATES: The Class B-4, Class B-5 and
Class B-6 Certificates.

         NON-PO PERCENTAGE: With respect to any Group I Mortgage Loan with a Net
Mortgage Rate less than 6.750% per annum, a fraction, expressed as a percentage,
equal to (x) the Net Mortgage Rate thereof divided by (y) 6.750% per annum. With
respect to any Group II Mortgage Loan with a Net Mortgage Rate less than 6.500%
per annum, a fraction, expressed as a percentage, equal to (x) the Net Mortgage
Rate thereof divided by (y) 6.500% per annum.

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

         NOTIONAL AMOUNT: The Notional Amount of the Class I-A-3 Certificates
and Class I-A-4 Certificates, as of any date of determination, is equal to the
Current Principal Amount of the Class I-A-2 Certificates. For federal income tax
purposes, however, the notional amount of the Class I-A-3 Certificates and Class
I-A-4 Certificates is the Uncertificated Principal Balance of REMIC II Regular
Interest I-A-2. The Notional Amount of the Class II-A-3 Certificates, as of any
date of determination, is equal to the Current Principal Amount of the Class
II-A-2 Certificates. For federal income tax


                                      -27-

<PAGE>



purposes, however, the notional amount of the Class II-A-3 Certificates is the
Uncertificated Principal Balance of REMIC II Regular Interest II-A-2. The
Notional Amount of the Class I-X Certificates, as of any date of determination,
is equal to the aggregate Scheduled Principal Balance of the Group I Mortgage
Loans with a Net Mortgage Rate greater than or equal to 6.750%. For federal
income tax purposes, however, the notional amount of the Class I-X Certificates
is the Uncertificated Principal Balance of REMIC II Regular Interest I-X. The
Notional Amount of the Class II-X Certificates, as of any date of determination,
is equal to the aggregate Scheduled Principal Balance of the Group II Mortgage
Loans with a Net Mortgage Rate equal to or greater then 6.500%. For federal
income tax purposes, however, the notional amount of the Class II-X Certificates
is the Uncertificated Principal Balance of REMIC II Regular Interest II-X.

         OFFERED CERTIFICATES: The Senior Certificates and Offered Subordinate
Certificates.

         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 or
the Depositor, as applicable, and delivered to the Trustee, as required by this
Agreement.

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

         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 Depositor.

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

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

         PASS-THROUGH RATE: As to each Class of Certificates, the REMIC I
Regular Interests and the REMIC II Regular Interests, the rate of interest
determined as provided with respect thereto, in


                                      -28-

<PAGE>



Section 5.01(c). Any monthly calculation of interest at a stated rate shall be
based upon annual interest at such rate divided by twelve.

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

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

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

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

                  (iv) securities bearing interest or sold at a discount issued
by any corporation (including the Trustee or the Master Servicer or its
Affiliates) 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;



                                      -29-

<PAGE>



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

                  (viii) any money market or common trust fund having the
Applicable Credit Rating or better from each Rating Agency, including any such
fund for which the Trustee or Master Servicer or any affiliate of the Trustee or
Master Servicer acts as a manager or an advisor; provided, however, that no
instrument or security shall be a Permitted Investment if such instrument or
security evidences a right to receive only interest payments with respect to the
obligations underlying such instrument or if such security provides for payment
of both principal and interest with a yield to maturity in excess of 120% of the
yield to maturity at par or if such instrument or security is purchased at a
price greater than par.

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

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

         PHYSICAL CERTIFICATES: The Residual Certificates and the Private
Certificates.

         PLYMOUTH: Plymouth Savings Bank, or its successor in interest.

         PLYMOUTH SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as
of April 21, 1997 between Norwest Funding, Inc. and Plymouth, attached hereto as
Exhibit H-24, pursuant to which Plymouth agreed to service in accordance with
the Wells Fargo Guide.

         PO PERCENTAGE: With respect to any Group I Mortgage Loan with a Net
Mortgage Rate less than 6.750% per annum, 6.750% per annum minus the Net
Mortgage Rate thereof divided by 6.750% per annum. With respect to any Group II
Mortgage Loan with a Net Mortgage Rate less than 6.500% per annum, 6.500% per
annum minus the Net Mortgage Rate thereof divided by 6.500% per annum.

         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 INTEREST SHORTFALL: With respect to any Distribution Date,
the aggregate shortfall, if any, in collections of interest (adjusted to the
related Net Mortgage Rates) on Mortgage Loans resulting from (a) prepayments in
full received during the related Prepayment Period and (b) the partial
prepayments received during the related Prepayment Period to the extent applied
prior to the Due Date in the month of the Distribution Date.

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


                                      -30-

<PAGE>



         PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related Security Instrument, if any or any
replacement policy therefor through the related Interest Accrual Period for such
Class relating to a Distribution Date.

         PRINCIPAL ONLY CERTIFICATES: The Class I-PO Certificates and Class
II-PO Certificates.

         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 Repurchase Proceeds, but excluding the principal portion of Net Liquidation
Proceeds.

         PRIVATE CERTIFICATES: The Class B-4, Class B-5 and Class B-6
Certificates.

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

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

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

         RATING AGENCIES: Fitch Ratings and S&P.

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

         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, except for the Class I-A-2, Class I-A-3, Class I-A-4,
Class II-A-2 and Class II-A-3 Certificates, which have a record date of the
Business Day prior to the 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).



                                      -31-

<PAGE>



         RELIEF ACT: The Servicemembers Civil Relief Act, or similar state law.

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

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

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

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

         REMIC I REGULAR INTERESTS: REMIC I Regular Interests I-A, I-X, I-PO,
I-ZZZ, II-A, II-X, II- PO, II-ZZZ, III-A and III-ZZZ.

         REMIC I SUBORDINATED BALANCE RATIO: The ratio among the Uncertificated
Principal Balances of each of the REMIC I Regular Interests ending with the
designation "A," equal to the ratio among, with respect to each such REMIC I
Regular Interest, the excess of (x) the aggregate Scheduled Principal Balance of
the Mortgage Loans in the related Loan Group over (y) the Current Principal
Amount of the Senior Certificates in the related Loan Group.

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

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

         REMIC II REGULAR INTERESTS: REMIC II Regular Interests I-A-1, I-A-2,
I-X, I-PO, II-A-1, II-A- 2, II-X, II-PO, III-A-1, B-1, B-2, B-3, B-4, B-5 and
B-6.

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

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

         REMIC III REGULAR CERTIFICATES: The Class I-A-1, Class I-A-2, Class
I-A-3, Class I-A-4, Class I-X , Class I-PO, Class II-A-1, Class II-A-2, Class
II-A-3, Class II-X, Class II-PO, Class III-A-1, Class B-1, Class B-2, Class B-3
, Class B-4, Class B-5 and Class B-6 Certificates.

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


                                      -32-

<PAGE>



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

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

         REPURCHASE PRICE: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Seller pursuant
to the Mortgage Loan Purchase Agreement or Article II of this Agreement, an
amount equal to the sum of (i)(a) 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 (b) 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, plus (c) any unreimbursed
Monthly Advances and servicing advances payable to the Servicer of the Mortgage
Loan or to the Master Servicer and (ii) any costs and damages (if any) incurred
by the Trust in connection with any violation of such Mortgage Loan of any
predatory lending laws.

         REPURCHASE PROCEEDS: the Repurchase Price in connection with any
repurchase of a Mortgage Loan by the Seller and any cash deposit in connection
with the substitution of a Mortgage Loan.

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

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

         RESIDUAL CERTIFICATES: Any of the Class R Certificates.

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

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

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



                                      -33-

<PAGE>



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

         SCHEDULED PRINCIPAL: The principal portion of any Scheduled Payment.

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

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

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

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


                                      -34-

<PAGE>



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, OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED [in the case of a Residual
Certificate or a Private Certificate] UNLESS THE OPINION OF COUNSEL REQUIRED BY
SECTION 5.07 OF THE POOLING AND SERVICING AGREEMENT IS PROVIDED [in the case of
the Class B-4, Class B-5 and Class B-6 Certificates]:, UNLESS THE TRANSFEREE
CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE
AND THE SERVICING, MANAGEMENT AND 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 OBLIGATIONS ON
THE PART OF THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER,
ANY SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A
BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A
REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON BEHALF OF AN
INSTITUTIONAL ACCREDITED INVESTOR."

         SECURITY AGREEMENT: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.

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

         SENIOR CERTIFICATES: The Class I-A-1, Class I-A-2, Class I-A-3,Class
I-A-4, Class I-X, Class I-PO, Class II-A-1, Class II-A-2, Class II-A-3, Class
II-X, Class II-PO, Class III-A-1, Class R-I, Class R-II and Class R-III
Certificates.

         SENIOR OPTIMAL PRINCIPAL AMOUNT: The Group I Senior Optimal Principal
Amount, Group II Senior Optimal Principal Amount and Group III Senior Optimal
Principal Amount, as applicable.

         SENIOR PERCENTAGE: The Group I Senior Percentage, Group II Senior
Percentage and Group III Senior Percentage, as applicable.

         SENIOR PREPAYMENT PERCENTAGE: The Group I Senior Prepayment Percentage,
Group II Senior Prepayment Percentage and Group III Senior Prepayment
Percentage, as applicable.

         SERVICER: With respect to each Mortgage Loan, Alliance, Bank of
America, Bank of Oklahoma, Bank One, Cendant, Central National, Charter, Chase,
Chevy Chase, CitiMortgage,


                                      -35-

<PAGE>



Colonial Savings, Columbia, Countrywide, CUNA, Downey, Fifth Third, First
Tennessee, GMAC, Hibernia, HSBC, Huntington, Morgan Stanley, Nat City, Plymouth,
SunTrust, U.S. Bank, WAMU or WFHM.

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

         SERVICING AGREEMENTS: The Alliance Servicing Agreement, Bank of America
Servicing Agreement, Bank of Oklahoma Servicing Agreement, Bank One Servicing
Agreement, Cendant Servicing Agreement, Central National Servicing Agreement,
Charter Servicing Agreement Chase Servicing Agreement, Chevy Chase Servicing
Agreement, CitiMortgage Servicing Agreement, Colonial Savings Servicing
Agreement, Columbia Servicing Agreement, Countrywide Servicing Agreement, CUNA
Servicing Agreement, Downey Servicing Agreement, Fifth Third Servicing
Agreement, First Tennessee Servicing Agreement, GMAC Servicing Agreement,
Hibernia Servicing Agreement, HSBC Servicing Agreement, Huntington Servicing
Agreement, Morgan Stanley Servicing Agreement, Nat City Servicing Agreement,
Plymouth Servicing Agreement, SunTrust Servicing Agreement, U.S. Bank Servicing
Agreement, WAMU Servicing Agreement or WFHM Servicing Agreement.

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

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

         SERVICING OFFICER: Any officer of the related Servicer or Master
Servicer involved in or responsible for the administration and servicing or
master servicing, as applicable, of the Mortgage Loans as to which officer
evidence, reasonably acceptable to the Trustee, of due authorization of such
officer by such Servicer or Master Servicer, has been furnished from time to
time to the Trustee.

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

         SPECIAL HAZARD LOSS AMOUNT: Upon the initial issuance of the
Certificates, $13,213,121. As of any Distribution Date, the Special Hazard Loss
Amount will equal the initial Special Hazard Loss Amount, minus the sum of (i)
the aggregate amount of Special Hazard Losses that would have been previously
allocated to the Subordinate Certificates in the absence of the Loss Allocation
Limit and (ii) the Adjustment Amount.

         SPECIAL HAZARD TERMINATION DATE: The Distribution Date upon which the
Special Hazard Loss Amount has been reduced to zero or a negative number (or the
Cross-Over Date, if earlier).


                                      -36-

<PAGE>



         STARTUP DAY: January 30, 2004.

         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 the 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 Group I, Group II
and Group III Mortgage Loans (but in no event greater than the aggregate Current
Principal Amount of the Subordinate Certificates immediately prior to such
Distribution Date):

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

                  (ii) the applicable Subordinate Prepayment Percentage of the
                  Non-PO Percentage of the Scheduled Principal Balance of each
                  Mortgage Loan in the related Loan Group that was the subject
                  of a Principal Prepayment in full received by the Master
                  Servicer during the related Prepayment Period;

                  (iii) the applicable Subordinate Prepayment Percentage of the
                  Non-PO Percentage of each Principal Prepayment in part
                  received during the related Prepayment Period with respect to
                  each Mortgage Loan in the related Loan Group;

                  (iv) the excess, if any, of (a) all Net Liquidation Proceeds
                  allocable to principal received during the related Prepayment
                  Period in respect of each Liquidated Mortgage Loan in the
                  related Loan Group over (b) the sum of the amounts
                  distributable to the related Senior Certificateholders
                  pursuant to clause (4) of the related definition of Senior
                  Optimal Principal Amount and Class PO Certificate Deferred
                  Amount on such Distribution Date;

                  (v) the applicable Subordinate Prepayment Percentage of the
                  Non-PO Percentage of the sum of (a) the Scheduled Principal
                  Balance of each Mortgage Loan in the related Loan Group which
                  was purchased with respect to such Distribution Date and (b)
                  the difference, if any, between the Scheduled Principal
                  Balance of a Mortgage Loan in the related Loan Group that has
                  been replaced by the Seller with a Substitute


                                      -37-

<PAGE>



                  Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement
                  in connection with such Distribution Date over the Scheduled
                  Principal Balance of such Substitute Mortgage Loan; and

                  (vi) on the Distribution Date on which the Current Principal
                  Amounts of the Group I Senior Certificates (other than the
                  Class I-A-3, Class I-A-4, Class I-X and Class I-PO
                  Certificates), Group II Senior Certificates (other than the
                  Class II-A-3, Class II-X and Class II-PO Certificates) or
                  Group III Senior Certificates, have all been reduced to zero,
                  100% of the related Senior Optimal Principal Amount. After the
                  aggregate Current Principal Amount of the Subordinate
                  Certificates has been reduced to zero, the Subordinate Optimal
                  Principal Amount shall be zero.

         SUBORDINATE PERCENTAGE: The Group I Subordinate Percentage, Group II
Subordinate Percentage or Group III Subordinate Percentage with respect to the
Group I Mortgage Loans, Group II Mortgage Loans and Group III Mortgage Loans,
respectively.

         SUBORDINATE PREPAYMENT PERCENTAGE: The Group I Subordinate Prepayment
Percentage, Group II Subordinate Prepayment Percentage or Group III Subordinate
Prepayment Percentage with respect to the Group I Mortgage Loans, Group II
Mortgage Loans and Group III Mortgage Loans, respectively.

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

         SUNTRUST: SunTrust Mortgage, Inc., or its successor in interest.

         SUNTRUST SERVICING AGREEMENT: The Mortgage Servicing Contract, dated as
of July 10, 1997 between Norwest Funding, Inc. and SunTrust, attached hereto as
Exhibit H-25, pursuant to which SunTrust agreed to service in accordance with
the Wells Fargo Guide.

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

         TERMINATION PURCHASE PRICE: The price, calculated as set forth in
Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 10.01.



                                      -38-

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

         UNCERTIFICATED PRINCIPAL BALANCE: With respect to any REMIC I Regular
Interest or REMIC II Regular Interest as of any Distribution Date, the initial
principal amount of such Regular Interest, reduced by (i) all amounts
distributed on previous Distribution Dates on such Regular Interest with respect
to principal, and (ii) the principal portion of all Realized Losses allocated
prior to such Distribution Date to such Regular Interest, taking account of the
Loss Allocation Limit.

         UNDERLYING SELLER: With respect to each Mortgage Loan, Wells Fargo
Asset Securities Corporation.

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

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

         U.S. BANK: U.S. Bank, N.A., as successor to Great Financial Bank, or
its successor in interest.

         U.S. BANK SERVICING AGREEMENT: The Mortgage Servicing Contract, dated
as of October 24, 1997 between Norwest Funding, Inc. and Great Financial Bank,
attached hereto as Exhibit H-26, pursuant to which Great Financial Bank agreed
to service in accordance with the Wells Fargo Guide.

         WAMU: Washington Mutual Bank, F.A., in its own capacity and as
successor to Homeside Lending, Inc., Bank United, F.S.B., North American
Mortgage Company, Fleet Mortgage Corp.,


                                      -39-

<PAGE>



People's Bank, Home Savings of America, F.S.B. and Washington Mutual Bank, N.A.,
or its successor in interest.

         WAMU SERVICING AGREEMENTS: The Master Servicing Contract, dated as of
September 17, 1998, between Bank United and Norwest Funding, Inc., the Master
Servicing Contract, dated September 3, 1998, between North American Mortgage
Company and Norwest Funding, Inc., the Mortgage Servicing Contract, dated
October 21, 1997, between People's Bank and Norwest Funding, Inc. and the
Mortgage Servicing Contract, dated September 23, 1998, between Home Savings of
America, FSB and Norwest Funding, Inc., each attached hereto as Exhibit H-27,
pursuant to which Bank United, North American Mortgage Company, People's Bank
and Home Savings of America each agreed to service in accordance with the Wells
Fargo Guide.

         WELLS FARGO GUIDE: The Norwest Bank Minnesota, N.A. Master Servicing
Guide dated January 1997, as amended.

         WELLS FARGO GUIDE MORTGAGE LOANS: Those Mortgage Loans that are
serviced by the Wells Fargo Guide Servicers.

         WELLS FARGO GUIDE SERVICERS: Alliance, Bank of Oklahoma, Bank One,
Central National, Charter, Chase, Chevy Chase, Columbia, CUNA, Downey, Fifth
Third, First Tennessee, GMAC, Hibernia, HSBC, Huntington, Nat City, Plymouth,
SunTrust and WAMU.

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

         WFHM SERVICING AGREEMENT: The Master Seller's Warranties and Servicing
Agreement dated as of April 1, 2003 between the Seller and WFHM, attached hereto
as Exhibit H-28, as modified by the related Assignment Agreement.


                                      -40-

<PAGE>



         Section 1.02.     CALCULATION OF LIBOR.

         LIBOR applicable to the calculation of the Pass-Through Rate on the
Adjustable Rate Certificates for any Interest Accrual Period will be determined
on each Interest Determination Date. On each Interest Determination Date, LIBOR
shall be established by the Securities Administrator and, as to any Interest
Accrual Period, will equal the rate for one month United States dollar deposits
that appears on the Telerate Screen Page 3750 as of 11:00 a.m., London" time, on
such Interest Determination Date. "Telerate Screen Page 3750" means the display
designated as page 3750 on the Telerate Service (or such other page as may
replace page 3750 on that service for the purpose of displaying London interbank
offered rates of major banks). If such rate does not appear on such page (or
such other page as may replace that page on that service, or if such service is
no longer offered, LIBOR shall be so established by use of such other service
for displaying LIBOR or comparable rates as may be reasonably selected by the
Securities Administrator), the rate will be the Reference Bank Rate. The
"Reference Bank Rate" will be determined on the basis of the rates at which
deposits in U.S. Dollars are offered by the reference banks (which shall be any
three major banks that are engaged in transactions in the London interbank
market, selected by the Securities Administrator) as of 11:00 a.m., London time,
on the Interest Determination Date to prime banks in the London interbank market
for a period of one month in amounts approximately equal to the aggregate
Current Principal Amount of the Adjustable Rate Certificates then outstanding.
The Securities Administrator will request the principal London office of each of
the reference banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the arithmetic mean of the quotations
rounded up to the nearest whole multiple of 0.03125%. If on such date fewer than
two quotations are provided as requested, the rate will be the arithmetic mean
of the rates quoted by one or more major banks in New York City, selected by the
Securities Administrator, as of 11:00 a.m., New York City time, on such date for
loans in U.S. Dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Current Principal Amount of the
Adjustable Rate Certificates then outstanding. If no such quotations can be
obtained, the rate will be LIBOR for the prior Distribution Date; PROVIDED
HOWEVER, if, under the priorities described above, LIBOR for a Distribution Date
would be based on LIBOR for the previous Distribution Date for the third
consecutive Distribution Date, the Securities Administrator shall select an
alternative comparable index (over which the Securities Administrator has no
control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.
The establishment of LIBOR by the Securities Administrator on any Interest
Determination Date and the Securities Administrator's subsequent calculation of
the Pass-Through Rate applicable to the Adjustable Rate Certificates for the
relevant Interest Accrual Period, in the absence of manifest error, will be
final and binding. Promptly following each Interest Determination Date the
Securities Administrator shall supply the Master Servicer with the results of
its determination of LIBOR on such date.




                                      -41-

<PAGE>



                                   ARTICLE II
                          Conveyance of Mortgage Loans;
                        Original Issuance of Certificates

         Section 2.01 CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE. (a) The Depositor
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Trust without recourse all its right, title and interest in
and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule,
including all interest and principal due with respect to the Mortgage Loans
after the Cut-off Date, but excluding any payments of principal and interest due
on or prior to the Cut-off Date; (ii) such assets as shall from time to time be
credited or are required by the terms of this Agreement to be credited to the
Master Servicer Collection Account, (iii) such assets relating to the Mortgage
Loans as from time to time may be held by the Servicers in Protected Accounts,
the Master Servicer in the Master Servicer Collection Account and the Trustee in
the Distribution Account, (iv) any REO Property, (v) the Required Insurance
Policies and any amounts paid or payable by the insurer under any Insurance
Policy (to the extent the mortgagee has a claim thereto), (vi) the Mortgage Loan
Purchase Agreement to the extent provided in Subsection 2.03(a), (vii) the
rights with respect to the Servicing Agreements and the Assignment Agreements
and (viii) any proceeds of the foregoing. Although it is the intent of the
parties to this Agreement that the conveyance of the Depositor'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 Depositor shall be deemed to have granted
to the Trustee a first priority perfected security interest in all of the
Depositor'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 Depositor
hereby delivers to the Custodian, as agent for the Trustee, with respect to (I)
each Mortgage Loan (other than a Cooperative Loan):

                  (i) the original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee, or lost note
affidavit together with a copy of the related Mortgage Note;

                  (ii) the original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language indicating that such
Mortgage Loan is a MOM Loan, which shall have been recorded (or if the original
is not available, a copy), with evidence of such recording indicated thereon (or
if clause (w) in the proviso below applies, shall be in recordable form);

                  (iii) unless the Mortgage Loan is a MOM Loan, 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 "LaSalle Bank
National Association, as Trustee", with evidence of recording with respect to
each Mortgage Loan in the name of the Trustee thereon (or if clause (w) in the
proviso below applies or for Mortgage Loans with respect to which the related
Mortgaged Property is located in a state other than Maryland or an Opinion of
Counsel has been provided as set forth in this Section 2.01(b), shall be in
recordable form);


                                      -42-

<PAGE>




                  (iv) all intervening assignments of the Security Instrument,
if applicable and only to the extent available to the Depositor 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 (II) with respect to each Cooperative Loan so assigned:

                  (i) the original Mortgage Note, endorsed without recourse to
the order of the Trustee and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee, or lost note
affidavit, together with a copy of the related Mortgage Note;

                  (ii) a counterpart of the Cooperative Lease and the Assignment
of Proprietary Lease to the originator of the Cooperative Loan with intervening
assignments showing an unbroken chain of title from such originator to the
Trustee;

                  (iii) the related Cooperative Stock Certificate, representing
the related Cooperative Stock pledged with respect to such Cooperative Loan,
together with an undated stock power (or other similar instrument) executed in
blank;

                  (iv) the original recognition agreement by the Cooperative of
the interests of the mortgagee with respect to the related Cooperative Loan and
any transfer documents related to the recognition agreement;

                  (v) the Security Agreement;

                  (vi) copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative Loan as
secured party, each with evidence of recording thereof, evidencing the interest
of the originator under the Security Agreement and the Assignment of Proprietary
Lease;

                  (vii) copies of the filed UCC-3 assignments of the security
interest referenced in clause (vi) above showing an unbroken chain of title from
the originator to the Trustee, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement and the
Assignment of Proprietary Lease;

                  (viii) an executed assignment of the interest of the
originator in the Security Agreement and Assignment of Proprietary Lease,
showing an unbroken chain of title from the originator to the Trustee; and



                                      -43-

<PAGE>



                  (ix) the original of each modification, assumption agreement
or preferred loan agreement, if any, relating to such Cooperative Loan;

PROVIDED, HOWEVER, that in lieu of the foregoing, the Depositor may deliver to
the Custodian, as agent of the Trustee, the following documents, under the
circumstances set forth below: (w) 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
Depositor in time to permit their delivery as specified above, the Depositor may
deliver a true copy thereof with a certification by the Depositor, 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"; (x) 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 Depositor to such effect) the
Depositor 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; (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans identified on Exhibit 5 to the Mortgage
Loan Purchase Agreement, the Depositor may deliver lost note affidavits from the
Seller; and (z) the Depositor shall not be required to deliver intervening
assignments or Mortgage Note endorsements between the related Underlying Seller
and the Seller, between the Seller and the Depositor, and between the Depositor
and the Trustee; and provided, further, however, that in the case of Mortgage
Loans which have been prepaid in full after the Cut-off Date and prior to the
Closing Date, the Depositor, in lieu of delivering the above documents, may
deliver to the Trustee or the Custodian, as its agent, a certification to such
effect and shall deposit all amounts paid in respect of such Mortgage Loans in
the Master Servicer Collection Account on the Closing Date. The Depositor shall
deliver such original documents (including any original documents as to which
certified copies had previously been delivered) to the Trustee or the Custodian,
as its agent, promptly after they are received. The Depositor shall cause the
Seller, at its expense, to cause each assignment of the Security Instrument to
the Trustee to be recorded not later than 180 days after the Closing Date,
unless (a) such recordation is not required by the Rating Agencies or an Opinion
of Counsel addressed to the Trustee has been provided to the Trustee (with a
copy to the Custodian) which states that recordation of such Security Instrument
is not required to protect the interests of the Certificateholders in the
related Mortgage Loans or (b) MERS is identified on the Mortgage or on a
properly recorded assignment of the Mortgage as the mortgagee of record solely
as nominee for the Seller and its successor and assigns; provided, however,
notwithstanding the foregoing, each assignment shall be submitted for recording
by the Seller in the manner described above, at no expense to the Trust or the
Trustee or the Custodian, as its agent, upon the earliest to occur of: (i)
reasonable direction by the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust, (ii) the
occurrence of an Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Seller and (iv) the occurrence of a
servicing transfer as described in Section 8.02 hereof. Notwithstanding the
foregoing, if the Seller fails to pay the cost of recording the assignments,
such expense will be paid by the Trustee and the Trustee shall be reimbursed for
such expenses by the Trust in accordance with Section 9.05.

         Section 2.02 ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust Fund to it by the
Depositor and receipt of, subject to


                                      -44-

<PAGE>



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 the Custodian, as its agent, pursuant to Section 2.01, and
declares that it will continue to hold those documents and any amendments,
replacements or supplements thereto and all other assets of the Trust Fund
delivered to it as Trustee in trust for the use and benefit of all present and
future Holders of the Certificates. On the Closing Date, the Custodian, with
respect to the Mortgage Loans, shall acknowledge with respect to each Mortgage
Loan by delivery to the Depositor and the Trustee of an Initial Certification
receipt of the Mortgage File, but without review of such Mortgage File, except
to the extent necessary to confirm that such Mortgage File contains the related
Mortgage Note or lost note affidavit. No later than 90 days after the Closing
Date (or, with respect to any Substitute Mortgage Loan, within five Business
Days after the receipt by the Trustee or Custodian thereof), the Trustee agrees,
for the benefit of the Certificateholders, to review or cause to be reviewed by
the Custodian on its behalf (under the Custodial Agreement), each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Depositor and the Trustee an Interim Certification. In
conducting such review, the Trustee or Custodian will ascertain whether all
required documents have been executed and received, and based on the Mortgage
Loan Schedule, whether those documents relate, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans it has received, as identified in the Mortgage Loan Schedule. In
performing any such review, the Trustee or the Custodian, as its agent, may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. If the
Trustee or the Custodian, as its agent, finds any document constituting part of
the Mortgage File has not been executed or 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 (a "Material Defect"), the Trustee or the Custodian, as
its agent, shall promptly notify the Seller. In accordance with the Mortgage
Loan Purchase Agreement, the Seller shall correct or cure any such Material
Defect within ninety (90) days from the date of notice from the Trustee or the
Custodian, as its agent, of the Material Defect and if the Seller fails to
correct or cure the Material Defect within such period, and such Material Defect
materially and adversely affects the interests of the Certificateholders in the
related Mortgage Loan, the Trustee shall enforce the Seller's obligation under
the Mortgage Loan Purchase Agreement to, within 90 days from the Trustee's or
the Custodian's notification, provide a Substitute Mortgage Loan (if within two
years of the Closing Date) or purchase such Mortgage Loan at the Repurchase
Price; provided that, if such Material 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 Material Defect relates
solely to the inability of the Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because the
originals of such documents, or a certified copy have not been returned by the
applicable jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan if the Seller delivers such original documents or certified copy
promptly upon receipt, but in no event later than 360 days after the Closing
Date. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver such original or copy of any document submitted for
recording to the appropriate recording office in the applicable jurisdiction
because such document has not been returned by such office; provided that the
Seller shall instead deliver a recording receipt of such recording office or, if
such receipt is not available, a certificate confirming that such documents have
been accepted for recording, and


                                      -45-

<PAGE>



delivery to the Trustee or the Custodian, as its agent, shall be effected by the
Seller within thirty days of its receipt of the original recorded document.

         (b) No later than 180 days after the Closing Date, the Trustee or the
Custodian, as its agent, will review, for the benefit of the Certificateholders,
the Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Depositor and the Trustee a Final Certification.
In conducting such review, the Trustee or the Custodian, as its agent, will
ascertain whether an original of each document required to be recorded has been
returned from the recording office with evidence of recording thereon or a
certified copy has been obtained from the recording office. If the Trustee or
the Custodian, as its agent, finds a Material Defect, the Trustee or the
Custodian, as its agent, shall promptly notify the Seller (provided, however,
that with respect to those documents described in subsections (b)(I)(iv), (v)
and (vii) of Section 2.01 and subsection (b)(II)(ix) of Section 2.01, the
Trustee's and Custodian's obligations shall extend only to the documents
actually delivered to the Custodian pursuant to such subsections). In accordance
with the Mortgage Loan Purchase Agreement, the Seller shall correct or cure any
such Material Defect within 90 days from the date of notice from the Trustee or
the Custodian, as its agent, of the Material Defect and if the Seller is unable
to cure such Material Defect within such period, and if such Material Defect
materially and adversely affects the interests of the Certificateholders in the
related Mortgage Loan, the Trustee shall enforce the Seller's obligation under
the Mortgage Loan Purchase Agreement to, within 90 days from the Trustee's or
Custodian's notification, provide a Substitute Mortgage Loan (if within two
years of the Closing Date) or purchase such Mortgage Loan at the Repurchase
Price, provided that, if such Material 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, repurchase or substitution must occur within 90 days from
the date such breach was discovered, provided, however, that if such Material
Defect relates solely to the inability of the Seller to deliver the original
Security Instrument or intervening assignments thereof, or a certified copy,
because the originals of such documents or a certified copy, have not been
returned by the applicable jurisdiction, the Seller shall not be required to
purchase such Mortgage Loan, if the Seller delivers such original documents or
certified copy promptly upon receipt, but in no event later than 360 days after
the Closing Date. The foregoing repurchase obligation shall not apply in the
event that the Seller cannot deliver such original or copy of any document
submitted for recording to the appropriate recording office in the applicable
jurisdiction because such document has not been returned by such office;
provided that the Seller shall instead deliver a recording receipt of such
recording office or, if such receipt is not available, a certificate confirming
that such documents have been accepted for recording, and delivery to the
Trustee or the Custodian, as its agent, shall be effected by the Seller within
thirty days of its receipt of the original recorded document.

         (c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with Subsections 2.02(a) or (b) above, the Seller shall remit to the
Master Servicer the Repurchase Price for deposit in the Master Servicer
Collection Account and the Seller shall provide to the Securities Administrator
and the Trustee written notification detailing the components of the Repurchase
Price. Upon deposit of the Repurchase Price in the Master Servicer Collection
Account, the Depositor shall notify the Trustee and the Custodian, as agent of
the Trustee (upon receipt of a Request for Release in the form of Exhibit D
attached hereto with respect to such Mortgage Loan), shall release to the Seller
the related Mortgage File and the Trustee shall execute and deliver all
instruments of transfer or assignment, without recourse, representation or
warranty, furnished to it by the Seller, as are


                                      -46-

<PAGE>



necessary to vest in the Seller title to and rights under the Mortgage Loan.
Such purchase shall be deemed to have occurred on the date on which the
Repurchase Price in available funds is received by the Trustee. The Master
Servicer shall amend the Mortgage Loan Schedule, which was previously delivered
to it by the Depositor in a form agreed to between the Depositor and the Master
Servicer, to reflect such repurchase and shall promptly notify the Rating
Agencies and the Master Servicer of such amendment. The obligation of the Seller
to repurchase or substitute for any Mortgage Loan a Substitute Mortgage Loan as
to which such a Material Defect in a constituent document exists shall be the
sole remedy respecting such defect available to the Certificateholders or to the
Trustee on their behalf.

         (d) Anything in this Section 2.02 to the contrary notwithstanding, a
Material Defect will be deemed not to materially and adversely affect the
interest of the Certificateholders in the related Mortgage Loan unless such
defect materially interferes with the applicable Servicer's ability to foreclose
on the related Mortgaged Property.

         Section 2.03 ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE
AGREEMENT. (a) The Depositor 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 the Depositor's rights and
obligations pursuant to the Servicing Agreements. The obligations of the Seller
to substitute or repurchase, as applicable, a Mortgage Loan shall be the
Trustee's and the Certificateholders' sole remedy for any breach thereof. At the
request of the Trustee, the Depositor 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 Depositor, the Securities Administrator or the Trustee
discovers a breach of any of the representations and warranties set forth in the
Mortgage Loan Purchase Agreement, which breach materially and adversely affects
the value of the interests of Certificateholders or the Trustee in the related
Mortgage Loan, the party discovering the breach shall give prompt written notice
of the breach to the other parties. The Seller, within 90 days of its discovery
or receipt of notice that such breach has occurred (whichever occurs earlier),
shall cure the breach in all material respects or, subject to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, shall
purchase the Mortgage Loan or any property acquired with respect thereto from
the Trustee; provided, however, that if there is a breach of any representation
set forth in the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, and the Mortgage Loan or the related property acquired
with respect thereto has been sold, then the Seller shall pay, in lieu of the
Repurchase Price, any excess of the Repurchase Price over the Net Liquidation
Proceeds received upon such sale. If the Net Liquidation Proceeds exceed the
Repurchase Price, any excess shall be paid to the Seller to the extent not
required by law to be paid to the borrower. Any such purchase by the Seller
shall be made by providing an amount equal to the Repurchase Price to the Master
Servicer for deposit in the Master Servicer Collection Account and written
notification detailing the components of such Repurchase Price. The Depositor
shall notify the Trustee and submit to the Custodian, as agent for the Trustee,
a Request for Release, and the Custodian shall release, or the Trustee shall
cause the Custodian to release, to the Seller the related Mortgage File and the
Trustee shall execute and deliver all instruments of transfer or assignment
furnished to it by the Seller, without recourse, representation or warranty as
are necessary to vest in the Seller title to and rights


                                      -47-

<PAGE>



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 Master Servicer shall
amend the Mortgage Loan Schedule to reflect such repurchase and shall promptly
notify the Trustee and the Rating Agencies of such amendment. Enforcement of the
obligation of the Seller to purchase (or substitute a Substitute Mortgage Loan
for) any Mortgage Loan or any property acquired with respect thereto (or pay the
Repurchase Price as set forth in the above proviso) as to which a breach has
occurred and is continuing shall constitute the sole remedy respecting such
breach available to the Certificateholders or the Trustee on their behalf.

         Section 2.04 SUBSTITUTION OF MORTGAGE LOANS. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this Agreement, the Seller may, no later than the date by which such purchase by
the Seller would otherwise be required, tender to the Trustee a Substitute
Mortgage Loan accompanied by a certificate of an authorized officer of the
Seller that such Substitute Mortgage Loan conforms to the requirements set forth
in the definition of "Substitute Mortgage Loan" in this Agreement; provided,
however, that substitution pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, in lieu of purchase shall not be
permitted after the termination of the two-year period beginning on the Startup
Day; provided, further, that if the breach would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code,
any such cure or substitution must occur within 90 days from the date the breach
was discovered. The Custodian, as agent for the Trustee, shall examine the
Mortgage File for any Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and the Trustee or the Custodian, as its agent, shall notify the
Seller, in writing, within five Business Days after receipt, whether or not the
documents relating to the Substitute Mortgage Loan satisfy the requirements of
the fifth sentence of Subsection 2.02(a). Within two Business Days after such
notification, the Seller shall provide to the Trustee for deposit in the
Distribution Account the amount, if any, by which the Outstanding Principal
Balance as of the next preceding Due Date of the Mortgage Loan for which
substitution is being made, after giving effect to the Scheduled Principal due
on such date, exceeds the Outstanding Principal Balance as of such date of the
Substitute Mortgage Loan, after giving effect to Scheduled Principal due on such
date, which amount shall be treated for the purposes of this Agreement as if it
were the payment by the Seller of the Repurchase Price for the purchase of a
Mortgage Loan by the Seller. After such notification to the Seller and, if any
such excess exists, upon receipt of such deposit, the Trustee shall accept such
Substitute Mortgage Loan which shall thereafter be deemed to be a Mortgage Loan
hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the Trust Fund and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon during
such month shall be the property of the Seller. The Scheduled Principal on a
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of the Seller and the Scheduled Principal on the Mortgage Loan
for which the substitution is made due on such Due Date shall be the property of
the Trust Fund. Upon acceptance of the Substitute Mortgage Loan (and delivery to
the Custodian of a Request for Release for such Mortgage Loan), the Custodian,
as agent for the Trustee, shall release to the Seller the related Mortgage File
related to any Mortgage Loan released pursuant to the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, and shall


                                      -48-

<PAGE>



execute and deliver all instruments of transfer or assignment, without recourse,
representation or warranty in form as provided to it as are necessary to vest in
the Seller title to and rights under any Mortgage Loan released pursuant to the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable. The Seller shall deliver to the Custodian the documents related to
the Substitute Mortgage Loan in accordance with the provisions of the Mortgage
Loan Purchase Agreement or Subsections 2.01(b) and 2.02(b) of this Agreement, as
applicable, with the date of acceptance of the Substitute Mortgage Loan deemed
to be the Closing Date for purposes of the time periods set forth in those
Subsections. The representations and warranties set forth in the Mortgage Loan
Purchase Agreement shall be deemed to have been made by the Seller with respect
to each Substitute Mortgage Loan as of the date of acceptance of such Mortgage
Loan by the Trustee. The Master Servicer shall amend the Mortgage Loan Schedule
to reflect such substitution and shall provide a copy of such amended Mortgage
Loan Schedule to the Trustee and the Rating Agencies.

         Section 2.05      ISSUANCE OF CERTIFICATES.

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

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

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

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

                  (i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and (b) is
qualified and in good standing as a foreign corporation to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not reasonably be expected to have a material adverse effect


                                      -49-

<PAGE>



on the Depositor's business as presently conducted or on the Depositor's ability
to enter into this Agreement and to consummate the transactions contemplated
hereby;

                  (ii) the Depositor 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 Depositor of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Depositor; 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 Depositor or its properties
or the articles of incorporation or by-laws of the Depositor, except those
conflicts, breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Depositor's ability to enter into this Agreement
and to consummate the transactions contemplated hereby;

                  (iv) the execution, delivery and performance by the Depositor
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
Depositor and, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid and binding obligation of the Depositor
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 Depositor, threatened against the Depositor, 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 Depositor will be
determined adversely to the Depositor and will if determined adversely to the
Depositor materially and adversely affect the Depositor's ability to enter into
this Agreement or perform its obligations under this Agreement; and the
Depositor 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 Depositor 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.



                                      -50-

<PAGE>



                                   ARTICLE III
                 Administration and Servicing of Mortgage Loans

         Section 3.01 MASTER SERVICER. The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Mortgage Loans in accordance with the terms of the applicable
Servicing Agreements and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with each
Servicer as necessary from time-to-time to carry out the Master Servicer's
obligations hereunder, shall receive, review and evaluate all reports,
information and other data provided to the Master Servicer by each Servicer and
shall cause each Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by such Servicer under its applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to the Servicers' and Master Servicer's records, and based on such
reconciled and corrected information, the Master Servicer shall provide such
information to the Securities Administrator as shall be necessary in order for
it to prepare the statements specified in Section 6.04, and prepare any other
information and statements required to be forwarded by the Master Servicer
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicers pursuant to the
applicable Servicing Agreements.

         Not later than the Closing Date, the Master Servicer shall notify the
Wells Fargo Guide Servicers that they are now servicing the Wells Fargo Guide
Mortgage Loans on behalf of the Master Servicer and the Trustee for the benefit
of the Certificateholders. Such notice shall also provide that, upon the
occurrence of an Event of Default under this Agreement and the termination of
the Master Servicer hereunder the Wells Fargo Guide Servicers shall, upon
receipt of notice of such termination from the Master Servicer, the Trustee or
the successor master servicer, service and administer the Wells Fargo Guide
Mortgage Loans for the benefit of the Trustee and the successor master servicer
and remit all amounts collected with respect to the Wells Fargo Guide Mortgage
Loans in accordance with the instructions provided by the Trustee or the
successor master servicer. The Master Servicer shall instruct the Wells Fargo
Guide Servicers to provide all remittances, reports, information and other data
or correspondence with respect to each related Wells Fargo Guide Mortgage Loan
to the Master Servicer in accordance with instructions to be provided by the
Master Servicer.

         Notwithstanding anything in this Agreement or any Servicing Agreement
to the contrary, the Master Servicer shall have no duty or obligation to
supervise, monitor or oversee, and shall have no liability to any
Certificateholder or to any other Person for the activities of any Servicer with
respect to the servicing and administration of any defaulted Cash Flow Loan.

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



                                      -51-

<PAGE>



         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.

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

         Section 3.02 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
Depositor, the related Servicer or the Master Servicer to assure such continuing
treatment. In particular, the Trustee shall not (a) sell or affirmatively 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 addressed to the Trustee prepared at the expense of the Trust Fund; and
(b) other than with respect to a substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as applicable, accept any
contribution to any REMIC after the Startup Day without receipt of a REMIC
Opinion addressed to the Trustee.

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

         (b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and act as servicer of the related Mortgage Loans or to
cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided,


                                      -52-

<PAGE>



however, it is understood and acknowledged by the parties hereto that there will
be a period of transition (not to exceed 90 days) before the actual servicing
functions can be fully transferred to such successor Servicer. Such enforcement,
including, without limitation, the legal prosecution of claims, termination of
Servicing Agreements and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, provided that the Master Servicer shall not be
required to prosecute or defend any legal action except to the extent that the
Master Servicer shall have received reasonable indemnity for its costs and
expenses in pursuing such action.

         (c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer or
the transfer and assumption of servicing by the Master Servicer with respect to
any Servicing Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with an evaluation
of the potential termination of the Servicer as a result of an event of default
by such Servicer and (ii) all costs and expenses associated with the complete
transfer of servicing, including all servicing files and all servicing data and
the completion, correction or manipulation of such servicing data as may be
required by the successor servicer to correct any errors or insufficiencies in
the servicing data or otherwise to enable the successor servicer to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such costs and expenses from the Master Servicer
Collection Account.

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

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

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

         Section 3.05 POWER TO ACT; PROCEDURES. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, to do any and all
things that it may deem necessary or desirable in connection with the master
servicing and administration of the Mortgage Loans, including but not limited to
the power and authority (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation Proceeds, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in


                                      -53-

<PAGE>



each case, in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable; provided, however, that the Master Servicer
shall not (and, consistent with its responsibilities under Section 3.03, shall
not permit any Servicer to) knowingly or intentionally take any action, or fail
to take (or fail to cause to be taken) any action reasonably within its control
and the scope of duties more specifically set forth herein, that, under the
REMIC Provisions, if taken or not taken, as the case may be, would cause any
REMIC to fail to qualify as a REMIC or result in the imposition of a tax upon
the Trust Fund (including but not limited to the tax on prohibited transactions
as defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code) unless the Master Servicer has
received an Opinion of Counsel (but not at the expense of the Master Servicer)
to the effect that the contemplated action would not cause any REMIC to fail to
qualify as a REMIC or result in the imposition of a tax upon any REMIC. The
Trustee shall furnish the Master Servicer, upon written request from a Servicing
Officer, with any powers of attorney empowering the Master Servicer or any
Servicer to execute and deliver instruments of satisfaction or cancellation, or
of partial or full release or discharge, and to foreclose upon or otherwise
liquidate Mortgaged Property, and to appeal, prosecute or defend in any court
action relating to the Mortgage Loans or the Mortgaged Property, in accordance
with the applicable Servicing Agreement and this Agreement, and the Trustee
shall execute and deliver such other documents, as the Master Servicer may
request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer or
any Servicer). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 9.11 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action in
the name of the Trustee, be deemed to be the agent of the Trustee.

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

         Section 3.07 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by any Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution Date,
the Servicer will, if required under the applicable Servicing Agreement (or if
the Servicer does not, the Master Servicer may), promptly furnish to the
Custodian, on behalf of the Trustee, two copies of a certification substantially
in the form of Exhibit D hereto signed by a Servicing Officer or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the


                                      -54-

<PAGE>



Protected Account maintained by the applicable Servicer pursuant to Section 4.01
or by the applicable Servicer pursuant to its Servicing Agreement have been or
will be so deposited) and shall request that the Custodian, on behalf of the
Trustee, deliver to the applicable Servicer the related Mortgage File. Upon
receipt of such certification and request, the Custodian, on behalf of the
Trustee, shall promptly release the related Mortgage File to the applicable
Servicer and the Trustee and Custodian shall have no further responsibility with
regard to such Mortgage File. Upon any such payment in full, each Servicer is
authorized, to give, as agent for the Trustee, as the mortgagee under the
Mortgage that secured the Mortgage Loan, an instrument of satisfaction (or
assignment of mortgage without recourse, representation or warranty) regarding
the Mortgaged Property subject to the Mortgage, which instrument of satisfaction
or assignment, as the case may be, shall be delivered to the Person or Persons
entitled thereto against receipt therefor of such payment, it being understood
and agreed that no expenses incurred in connection with such instrument of
satisfaction or assignment, as the case may be, shall be chargeable to the
Protected Account.

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

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

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


                                      -55-

<PAGE>



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

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

         Section 3.09 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.

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

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

         Section 3.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to prepare and present on behalf of the
Trustee and the Certificateholders all claims under the Insurance Policies and
take such actions (including the negotiation, settlement, compromise or
enforcement of the insured's claim) as shall be necessary to realize recovery
under such policies. Any proceeds


                                      -56-

<PAGE>



disbursed to the Master Servicer (or disbursed to a Servicer and remitted to the
Master Servicer) in respect of such policies, bonds or contracts shall be
promptly deposited in the Master Servicer Collection Account upon receipt,
except that any amounts realized that are to be applied to the repair or
restoration of the related Mortgaged Property as a condition precedent to the
presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).

         Section 3.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES.

         (a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of the Master
Servicer or such Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause each Servicer (to the
extent required under the related Servicing Agreement) to keep in force and
effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain
such insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
any Servicer (to the extent required under the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.

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

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

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


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<PAGE>



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

(b) Notwithstanding paragraph (a) of this Section 3.13, in the event that a
Foreclosure Restricted Loan goes into foreclosure, if acquiring title to the
related Mortgaged Property by foreclosure or by deed in lieu of foreclosure
would cause (i) the adjusted basis (for federal income tax purposes) of the
Mortgaged Properties underlying the Foreclosure Restricted Loans that are
currently owned by REMIC I after foreclosure (along with any other assets owned
by REMIC I other than "qualified mortgages" and "permitted investments" within
the meaning of Section 860G of the Code) plus (ii) the aggregate Scheduled
Principal Balance of the Mortgage Loans listed on Exhibit L, to exceed 0.75% of
the adjusted basis of the assets of REMIC I, the Master Servicer, upon notice
from a Servicer that title is about to be taken to such Mortgaged Property as
REO Property on behalf of the Trust Fund, shall not permit such Servicer to
acquire title to such Mortgaged Property on behalf of REMIC I. Instead, the
Master Servicer shall notify the Seller that title is about to be taken to the
related Mortgaged Property as REO Property on behalf of the Trust Fund, and the
Seller shall repurchase such Foreclosure Restricted Loan from the Trust Fund at
the Repurchase Price. In the event that Seller fails to repurchase such Mortgage
Loan, the Master Servicer shall cause the related Servicer to dispose of the
Mortgage Loan for cash in the foreclosure sale. If such Mortgage Loan is not
purchased at foreclosure sale, such Mortgage Loan will be written-off in
accordance with the related Servicer's standard procedures. In addition, if the
Master Servicer determines that following a distribution on any Distribution
Date (i) the adjusted bases of the Mortgaged Properties underlying the
Foreclosure Restricted Loans in foreclosure (along with any other assets owned
by REMIC I other than "qualified mortgages" and "permitted investments" within
the meaning of Section 860G of the Code) plus (ii) the aggregate Scheduled
Principal Balance of the Mortgaged Loan listed on Exhibit L, exceed 1.0% of the
adjusted bases of the assets of REMIC I immediately after the distribution, then
prior to such Distribution Date, the Seller shall purchase enough of such
Mortgaged Properties in foreclosure, for cash, at the Repurchase Price, so that
the adjusted bases of (i) such Mortgaged Properties in foreclosure (along with
any other assets owned by REMIC I other than "qualified mortgages" and
"permitted investments" within the meaning of Section 860G of the Code) plus
(ii) the aggregate Scheduled Principal Balance of the Mortgaged Loans listed on
Exhibit L, will be less than 1.0% of the adjusted bases of the assets of REMIC
I.

         Section 3.14      COMPENSATION FOR THE MASTER SERVICER.

         The Master Servicer will be entitled to all income and gain realized
from any investment of funds in the Distribution Account and the Master Servicer
Collection Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not including
any prepayment premium or penalty) shall be retained by the applicable Servicer
and shall not be deposited in the Protected Account. The Master Servicer shall
be required to pay all expenses incurred by it in connection with its activities
hereunder and shall not be entitled to reimbursement therefor except as provided
in this Agreement.


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<PAGE>



         Section 3.15      REO PROPERTY.

         (a) In the event the Trust Fund acquires ownership of any REO Property
in respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall cause the
applicable Servicer to protect and conserve, such REO Property in the manner and
to the extent required by the applicable Servicing Agreement, in accordance with
the REMIC Provisions and in a manner that does not result in a tax on "net
income from foreclosure property" or cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code.

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

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

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

         Section 3.16      ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.

         (a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before March 1 of each year, commencing on March 1, 2005, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that any Servicer has failed
to perform any of its duties, responsibilities and obligations under its
Servicing Agreement in


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<PAGE>



all material respects throughout such year, or, if there has been a material
default in the performance or fulfillment of any such duties, responsibilities
or obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof.

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

         Section 3.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT. If the
Master Servicer has, during the course of any fiscal year, directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense shall cause a
nationally recognized firm of independent certified public accountants to
furnish a statement to the Trustee, the Rating Agencies and the Depositor on or
before March 1 of each year, commencing on March 1, 2005 to the effect that,
with respect to the most recently ended fiscal year, such firm has examined
certain records and documents relating to the Master Servicer's performance of
its servicing obligations under this Agreement and pooling and servicing and
trust agreements in material respects similar to this Agreement and to each
other and that, on the basis of such examination conducted substantially in
compliance with the audit program for mortgages serviced for Freddie Mac or the
Uniform Single Attestation Program for Mortgage Bankers, such firm is of the
opinion that the Master Servicer's activities have been conducted in compliance
with this Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other exceptions as are set forth in such statement and
(iii) such exceptions that the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages Serviced by Freddie Mac requires it
to report. Copies of such statements shall be provided to any Certificateholder
upon request by the Master Servicer, or by the Trustee at the expense of the
Master Servicer if the Master Servicer shall fail to provide such copies (unless
(i) the Master Servicer shall have failed to provide the Trustee with such
statement or (ii) the Trustee shall be unaware of the Master Servicer's failure
to provide such statement). If such report discloses exceptions that are
material, the Master Servicer shall advise the Trustee whether such exceptions
have been or are susceptible of cure, and will take prompt action to do so.

         Section 3.18 REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.
Within 15 days after each Distribution Date, the Securities Administrator shall,
in accordance with industry standards, file with the Commission via the
Electronic Data Gathering and Retrieval System ("EDGAR"), a Form 8-K with a copy
of the statement to the Certificateholders for such Distribution Date as an
exhibit thereto. Prior to January 30 in any year, the Securities Administrator
shall, in accordance with industry standards and only if instructed by the
Depositor, file a Form 15 Suspension Notice with respect to the Trust Fund, if
applicable. Prior to (i) March 15, 2005 and (ii) unless and until a Form 15
Suspension Notice shall have been filed, prior to March 15 of each year
thereafter, the Master Servicer shall provide the Securities Administrator with
a Master Servicer Certification, together with a copy of the annual independent
accountant's servicing report and annual statement of compliance of each
Servicer, in each case, required to be delivered pursuant to the related
Servicing Agreement, and, if applicable, the annual independent accountant's
servicing report and annual statement of compliance to be delivered by the
Master Servicer pursuant to Sections 3.16 and 3.17.


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Prior to (i) March 31, 2005, or such earlier filing date as may be required by
the Commission, and (ii) unless and until a Form 15 Suspension Notice shall have
been filed, March 31 of each year thereafter, or such earlier filing date as may
be required by the Commission, the Securities Administrator shall file a Form
10-K, in substance conforming to industry standards, with respect to the Trust.
Such Form 10-K shall include the Master Servicer Certification and other
documentation provided by the Master Servicer pursuant to the second preceding
sentence. The Depositor hereby grants to the Securities Administrator a limited
power of attorney to execute and file each such document on behalf of the
Depositor. Such power of attorney shall continue until either the earlier of (i)
receipt by the Securities Administrator from the Depositor of written
termination of such power of attorney and (ii) the termination of the Trust
Fund. The Depositor agrees to promptly furnish to the Securities Administrator,
from time to time upon request, such further information, reports and financial
statements within its control related to this Agreement and the Mortgage Loans
as the Securities Administrator reasonably deems appropriate to prepare and file
all necessary reports with the Commission. The Securities Administrator shall
have no responsibility to file any items other than those specified in this
Section 3.18; provided, however, the Securities Administrator will cooperate
with the Depositor in connection with any additional filings with respect to the
Trust Fund as the Depositor deems necessary under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Fees and expenses incurred by the
Securities Administrator in connection with this Section 3.18 shall not be
reimbursable from the Trust Fund.

         Section 3.19 THE COMPANY. On the Closing Date, the Company will receive
from the Depositor a payment of $5,000.

         Section 3.20 UCC. The Depositor shall inform the Trustee in writing of
any Uniform Commercial Code financing statements that were filed on the Closing
Date in connection with the Trust with stamped recorded copies of such financing
statements to be delivered to the Trustee promptly upon receipt by the
Depositor. The Trustee agrees to monitor and notify the Depositor if any
continuation statements for such Uniform Commercial Code financing statements
need to be filed. If directed by the Depositor in writing, the Trustee will file
any such continuation statements solely at the expense of the Depositor. The
Depositor shall file any financing statements or amendments thereto required by
any change in the Uniform Commercial Code.

         Section 3.21      OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.

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



                                      -61-

<PAGE>



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




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<PAGE>



                                   ARTICLE IV
                                    Accounts

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

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

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

                  (i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by such Servicer pursuant to its Servicing
Agreement which were due on or before the related Due Date, net of the amount
thereof comprising its Servicing Fee or any fees with respect to any lender-paid
primary mortgage insurance policy;



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<PAGE>



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

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

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

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

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

                  (i) Any amounts withdrawn from a Protected Account;

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

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

                  (iv) The Repurchase Price with respect to any Mortgage Loans
purchased by the Seller pursuant to the Mortgage Loan Purchase Agreement or
Sections 2.02 or 2.03 hereof, any amounts which are to be treated pursuant to
Section 2.04 of this Agreement as the payment of a Repurchase Price in
connection with the tender of a Substitute Mortgage Loan by the Seller, the
Repurchase Price with respect to any Mortgage Loans purchased by the Company
pursuant to Section 3.21, and all proceeds of any Mortgage Loans or property
acquired with respect thereto repurchased by the Depositor or its designee
pursuant to Section 10.01;

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

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



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<PAGE>



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

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

         Section 4.03 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER
SERVICER COLLECTION ACCOUNT. (a) The Master Servicer will, from time to time on
demand of a Servicer or the Securities Administrator, make or cause to be made
such withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the related Servicing Agreement. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 10.01 and
remove amounts from time to time deposited in error.

         (b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account (i) any expenses, costs and liabilities
recoverable by the Trustee, the Master Servicer or the Securities Administrator
or the Custodian pursuant to Sections 3.03, 7.04 and 9.05 and (ii) any amounts
payable to the Master Servicer as set forth in Section 3.14; provided however,
that the Master Servicer shall be obligated to pay from its own funds any
amounts which it is required to pay under Section 7.03(a).



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<PAGE>



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

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

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

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

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

         Section 4.05 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION
ACCOUNT. (a) The Trustee will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master


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<PAGE>



Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the Servicing Agreements or as the Securities Administrator has
instructed hereunder for the following purposes (limited in the case of amounts
due the Master Servicer to those not withdrawn from the Master Servicer
Collection Account in accordance with the terms of this Agreement):

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

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

                  (iii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan and to reimburse the Master Servicer
or such Servicer from Liquidation Proceeds from a particular Mortgage Loan for
Liquidation Expenses incurred with respect to such Mortgage Loan; provided that
the Master Servicer shall not be entitled to reimbursement for Liquidation
Expenses with respect to a Mortgage Loan to the extent that (i) any amounts with
respect to such Mortgage Loan were paid as Excess Liquidation Proceeds pursuant
to clause (viii) of this Subsection 4.05 (a) to the Master Servicer; and (ii)
such Liquidation Expenses were not included in the computation of such Excess
Liquidation Proceeds;

                  (iv) to reimburse the Master Servicer or any Servicer for
advances of funds (other than Monthly Advances) made with respect to the
Mortgage Loans, and the right to reimbursement pursuant to this subclause being
limited to amounts received on the related Mortgage Loan (including, for this
purpose, the Repurchase Price therefor, Insurance Proceeds and Liquidation
Proceeds) which represent late recoveries of the payments for which such
advances were made;

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

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

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

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



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<PAGE>



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

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

                  (xi) to remove amounts deposited in error; and

                  (xii) to clear and terminate the Distribution Account pursuant
to Section 10.01.

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

         (c) On each Distribution Date, the Trustee shall distribute the
Available Funds to the extent on deposit in the Distribution Account to the
Holders of the Certificates in accordance with distribution instructions
provided to it by the Securities Administrator in writing no later than two
Business Days prior to such Distribution Date and determined by the Securities
Administrator in accordance with Section 6.01.



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<PAGE>



                                    ARTICLE V
                                  Certificates

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

         The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates of
one or more such Classes request that the Trustee cause such Class to become
Global Certificates, the Trustee and the Depositor 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 Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor within 30 days or (ii) the Depositor 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 Depositor nor
the Trustee shall be liable for any delay in delivery of any instructions
required under this section and may conclusively rely on, and shall be protected
in relying on, such instructions.

         In addition, if an Event of Default has occurred and is continuing,
each Certificate Owner materially adversely affected thereby may at its option
request a definitive Certificate evidencing such Certificate Owner's Fractional
Undivided Interest in the related Class of Certificates. In order to make such
request, such Certificate Owner shall, subject to the rules and procedures of
the


                                      -69-

<PAGE>



Depository, provide the Depository or the related Depository Participant with
directions for the Trustee to exchange or cause the exchange of the Certificate
Owner's interest in such Class of Certificates for an equivalent Fractional
Undivided Interest in fully registered definitive form. Upon receipt by the
Trustee of instructions from the Depository directing the Trustee to effect such
exchange (such instructions to contain information regarding the Class of
Certificates and the Current Principal Amount being exchanged, the Depository
Participant account to be debited with the decrease, the registered holder of
and delivery instructions for the definitive Certificate, and any other
information reasonably required by the Trustee), (i) the Trustee shall instruct
the Depository to reduce the related Depository Participant's account by the
aggregate Current Principal Amount of the definitive Certificate, (ii) the
Trustee shall execute, authenticate and deliver, in accordance with the
registration and delivery instructions provided by the Depository, a definitive
Certificate evidencing such Certificate Owner's Fractional Undivided Interest in
such Class of Certificates and (iii) the Trustee shall execute and authenticate
a new Book-Entry Certificate reflecting the reduction in the Current Principal
Amount of such Class of Certificates by the amount of the definitive
Certificates.

         (c) (i) REMIC I will be evidenced by (x) the REMIC I Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC I and have the principal
balances and accrue interest at the Pass-Through Rates equal to those set forth
in this Section 5.01(c)(i) and (y) the Class R-I Certificates, which is hereby
designated as the single "residual interest" in REMIC I.


  REMIC I Interest       Initial Balance   Pass-Through Rate     Related Group
 -------------------------------------------------------------------------------
         I-A                  $2,276.13        6.75%                Group I
         I-X                      (1)           (2)                 Group I
        I-PO              $9,368,323.47        0.00%                Group I
        I-ZZZ           $883,175,022.66        6.75%                Group I
        II-A                    $410.85        6.50%                Group II
        II-X                      (3)           (4)                 Group II
        II-PO             $2,256,643.64        0.00%                Group II
       II-ZZZ           $158,834,100.11        6.50%                Group II
        III-A                   $682.53         (5)                 Group III
       III-ZZZ           267,674,569.95         (5)                 Group III
         R-I                     $50.00        6.75%                Group I

_________________________

(1) REMIC I Regular Interest I-X will not have a Uncertificated Principal
Balance, but will accrue interest on a Notional Amount equal to the aggregate
Stated Principal Balance of the Group I Mortgage Loans.

(2) REMIC I Regular Interest I-X will bear interest at a variable Pass-Through
Rate equal to the excess, if any, of (a) the weighted average Net Mortgage Rates
on the Group I Mortgage Loans with a Net Mortgage Rate greater than 6.75% over
(b) 6.75% per annum.

(3) REMIC I Regular Interest II-X will not have a Uncertificated Principal
Balance, but will accrue interest on a Notional Amount equal to the aggregate
Stated Principal Balance of the Group II Mortgage Loans.

(4) REMIC I Regular Interest II-X will bear interest at a variable Pass-Through
Rate equal to the excess, if any, of (a) the weighted average Net Mortgage Rates
on the Group II Mortgage Loans with a Net Mortgage Rate greater than 6.50% over
(b) 6.50% per annum.


                                      -70-

<PAGE>



(5) REMIC I Regular Interest III-A and REMIC I Regular Interest III-ZZZ will
bear interest at a Pass-Through Rate equal to the weighted average of the Net
Rates of the Group III Mortgage Loans.

         Distributions of principal shall be deemed to be made to the REMIC I
Regular Interests, first, to each REMIC I Regular Interest ending with the
designation "A," so that the Uncertificated Principal Balance of each such REMIC
I Regular Interest is equal to 0.01% of the excess of (x) the aggregate
Scheduled Principal Balance of the Mortgage Loans in the related Loan Group over
(y) the Current Principal Amount of the Senior Certificate in such Loan Group
(except that if any such excess is a larger number than in the preceding
distribution period, the least amount of principal shall be distributed to such
REMIC I Regular Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and second, any remaining principal in each Loan Group to the
related REMIC I Regular Interest ending with the designation ZZZ (provided that
a portion of the remaining principal equal to the Class PO Certificate Principal
Distribution Amount attributable to the Group I Mortgage Loans and the Class PO
Certificate Principal Distribution Amount attributable to the Group II Mortgage
Loans will be distributed to REMIC I Regular Interest I-PO and REMIC I Regular
Interest II-PO, respectively). Realized Losses from each Loan Group shall be
applied after all distributions have been made on each Distribution Date, first,
to the related REMIC I Regular Interest ending with the designation "A," so that
the Uncertificated Principal Balance of each such REMIC I Regular Interest is
equal to 0.01% of the excess of (x) the aggregate Scheduled Principal Balance of
the Mortgage Loans in the related Loan Group over (y) the Current Principal
Amount of the Senior Certificate in the related Loan Group (except that if any
such excess is a larger number than in the preceding distribution period, the
least amount of Realized Losses shall be applied to such REMIC I Regular
Interests such that the REMIC I Subordinated Balance Ratio is maintained); and
second, any remaining Realized Losses from each Loan Group shall be allocated to
the related REMIC I Regular Interests ending with the designation ZZZ (except
that if a Realized Loss is recognized with respect to a Discount Mortgage Loan
in either the Group I Mortgage Loans or Group II Mortgage Loans, the applicable
portion of such Realized Loss will be allocated to REMIC I Regular Interest I-PO
and REMIC I Regular Interest II-PO, respectively).

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



                                      -71-

<PAGE>




REMIC II Interest   Initial Balance  Pass-Through Rate     Related Group
-----------------   ---------------  -----------------     -------------
      I-A-1         $537,760,000.00        6.00%               Group I
      I-A-2         $322,656,000.00        8.00%               Group I
       I-X                      (1)         (1)                Group I
       I-PO           $9,368,323.47        0.00%               Group I
      II-A-1         $77,363,000.00        5.00%               Group II
      II-A-2         $77,363,000.00        8.00%               Group II

       II-X                     (2)         (2)                Group II
      II-PO           $2,256,643.64        0.00%               Group II
     III-A-1        $260,850,000.00         (3)                Group III
       B-1           $25,766,000.00         (4)        Group I through Group III
       B-2            $2,642,000.00         (4)        Group I through Group III
       B-3            $1,982,000.00         (4)        Group I through Group III
       B-4            $1,322,000.00         (4)        Group I through Group III
       B-5              $660,000.00         (4)        Group I through Group III
       B-6            $1,322,962.23         (4)        Group I through Group III
       R-II                  $50.00        6.75%                Group I


____________________
(1) REMIC II Regular Interest I-X will not have a Uncertificated Principal
Balance or Pass-Through Rate, but will be entitled to receive 100% of the
interest payable with respect to REMIC I Regular Interest I-X.

(2) REMIC II Regular Interest II-X will not have a Uncertificated Principal
Balance or Pass-Through Rate, but will be entitled to receive 100% of the
interest payable with respect to REMIC I Regular Interest II-X.

(3) REMIC II Regular Interest III-A-1 will bear interest at a Pass-Through Rate
equal to the weighted average of the Net Rates of the Group III Mortgage Loans.

(4) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rates on REMIC I Regular Interests I-A, II-A and III-A, weighted on
the basis of the Uncertificated Principal Balance of each such REMIC I Regular
Interest immediately preceding the related Distribution Date.

         Principal shall be payable to, and shortfalls, losses and prepayments
are allocable to, the REMIC II Regular Interests as such amounts are payable and
allocable to the Corresponding Certificates.

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


       Designation     Initial Principal Amount    Pass-Through Rate
       -----------     ------------------------    -----------------

          I-A-1           $   537,760,000.00           6.000%
          I-A-2           $   322,656,000.00             (1)
          I-A-3                          (2)             (3)
          I-A-4                          (2)             (4)
           I-X            $              (5)             (6)
           I-PO           $     9,368,323.47           0.000%
          II-A-1          $    77,363,000.00           5.000%
          II-A-2          $    77,363,000.00             (7)
          II-A-3          $              (8)             (9)
           II-X           $             (10)            (11)
          II-PO           $     2,256,643.64           0.000%


                                      -72-

<PAGE>


         III-A-1          $   260,850,000.00            (12)
           R-I            $               50           6.750%
           R-II           $               50           6.750%
          R-III           $               50           6.750%
           B-1            $    25,766,000.00            (13)
           B-2            $     2,642,000.00            (13)
           B-3            $     1,982,000.00            (13)
           B-4            $     1,322,000.00            (13)
           B-5            $       660,000.00            (13)
           B-6            $     1,322,962.23            (13)

___________________

(1) The Class I-A-2 Certificates will bear interest at a Pass-Through Rate equal
to 1.520% per annum for the first Distribution Date, and thereafter at an
adjustable Pass-Through Rate equal to 0.400% per annum plus LIBOR, subject to a
minimum rate of 0.400% per annum and a maximum rate equal to 8.000% per annum.

(2) The Class I-A-3 Certificates and I-A-4 Certificates do not have an initial
Current Principal Amount. The Class I-A-3 Certificates and Class I-A-4
Certificates each have an initial Notional Amount of $322,656,000.00. For
federal income tax purposes, the Class I-A-3 Certificates and Class I-A-4
Certificates each will have a Notional Amount equal to REMIC II Regular Interest
I-A-2.

(3) The Class I-A-3 Certificates will bear interest at a Pass-Through Rate equal
to 6.430% per annum for the first Distribution Date, and thereafter at an
adjustable Pass-Through Rate equal to 7.550% per annum minus LIBOR, subject to a
minimum rate of 0.000% per annum and a maximum rate equal to 7.550% per annum.
For federal income tax purposes, the Class I-A-3 Certificates will bear interest
at a Pass-Through Rate equal to (a) 8.00% per annum minus (b) 0.450% per annum
plus LIBOR subject to a maximum rate equal to 8.00% per annum.

(4) The Class I-A-4 Certificates will bear interest at a Pass-Through Rate equal
to 0.050% per annum for the first Distribution Date, and thereafter at an
adjustable Pass-Through Rate equal to 7.600% per annum minus LIBOR, subject to a
minimum rate of 0.000% per annum and a maximum rate equal to 0.050% per annum.
For federal income tax purposes, the Class I-A-4 Certificates will bear interest
at a Pass-Through Rate equal to (a) 8.00% per annum minus (b) 0.400% per annum
plus LIBOR subject to a minimum rate equal to 7.95% per annum.

(5) The Class I-X Certificates do not have an initial current principal amount.
The Class I-X Certificates have an initial Notional Amount of $637,060,432.10.

(6) The Class I-X Certificates will bear interest at a variable Pass-Through
Rate equal to the excess, if any, of (a) the weighted average Net Mortgage Rates
on the Group I Mortgage Loans with a Net Mortgage Rate greater than or equal to
6.750% over (b) 6.750% per annum. The Pass-Through Rate for the initial Interest
Accrual Period is 0.444% per annum. For federal income tax purposes, the Class
I-X Certificates will not have a Pass-Through Rate, but will be entitled to
receive 100% of the interest payable with respect to REMIC II Regular Interest
I-X.

(7) The Class II-A-2 Certificates will bear interest at a Pass-Through Rate
equal to 1.520% per annum for the first Distribution Date, and thereafter at an
adjustable Pass-Through Rate equal to 0.400% per annum plus LIBOR, subject to a
minimum rate of 0.400% per annum and a maximum rate equal to 8.000% per annum.

(8) The Class II-A-3 Certificates do not have an initial Current Principal
Amount. The Class II-A-3 Certificates have an initial Notional Amount of
$77,363,000.00. For federal income tax purposes, the Class II-A-3 Certificates
will have a Notional Amount equal to REMIC II Regular Interest II-A-2.



                                      -73-

<PAGE>

(9) The Class II-A-3 Certificates will bear interest at a Pass-Through Rate
equal to 6.480% per annum for the first Distribution Date, and thereafter at an
adjustable Pass-Through Rate equal to 7.600% per annum minus LIBOR, subject to a
minimum rate of 0.000% per annum and a maximum rate equal to 7.600% per annum.

(10) The Class II-X Certificates do not have an initial current principal
amount. The Class II-X Certificates have an initial Notional Amount of
$106,059,917.45.

(11) The Class II-X Certificates will bear interest at a variable Pass-Through
Rate equal to the excess, if any, of (a) the weighted average Net Mortgage Rates
on the Group II Mortgage Loans with a Net Mortgage Rate greater than or equal to
6.500% over (b) 6.500% per annum. The Pass-Through Rate for the initial Interest
Accrual Period is 0.313% per annum. For federal income tax purposes, the Class
II-X Certificates will not have a Pass-Through Rate, but will be entitled to
receive 100% of the interest payable with respect to REMIC II Regular Interest
II-X.

(12) The Class III-A-1 Certificates will bear interest at a variable
Pass-Through Rate equal to the weighted average of the Net Mortgage Rates of the
Group III Mortgage Loans, weighted on the basis of the respective Scheduled
Principal Balances of each such Mortgage Loan as of the beginning of the Due
Period immediately preceding the related Distribution Date; provided that, for
federal income tax purposes the Class III-A-1 Certificates will bear interest at
a rate equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC II Regular Interest III-A-1, weighted on the basis of
the Uncertificated Principal balance of such REMIC II Regular Interest
immediately preceding the related Distribution Date. The Pass-Through Rate with
respect to the first Interest Accrual Period is 6.998% per annum.

(13) The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates will each bear interest at a variable Pass- Through Rate equal to
the weighted average of 6.750% per annum, 6.500% per annum and the weighted
average of the Net Mortgage Rates of the Group III Mortgage Loans, weighted in
proportion to the results of subtracting from the aggregate principal balance of
each Loan Group, the Current Principal Amount of the related Class or Classes of
Senior Certificates; provided that for federal income tax purposes such
Certificates will bear interest at a rate equivalent to the foregoing, expressed
as the weighted average of the Pass-Through Rates on REMIC II Regular Interests
B-1, B-2, B-3, B-4, B-5 and B-6, weighted on the basis of the Uncertificated
Principal Balance of each such REMIC II Regular Interest immediately preceding
the related Distribution Date.

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

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

         (f) The Certificates shall be substantially in the forms set forth in
Exhibits A-1, A-2 and A-3. On original issuance, the Trustee shall sign,
countersign and shall deliver them at the direction of the Depositor. Pending
the preparation of definitive Certificates of any Class, the Trustee may sign
and countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine,


                                      -74-

<PAGE>



as evidenced by their execution of such Certificates. If temporary Certificates
are issued, the Depositor will cause definitive Certificates to be prepared
without unreasonable delay. After the preparation of definitive Certificates,
the temporary Certificates shall be exchangeable for definitive Certificates
upon surrender of the temporary Certificates at the office of the Trustee,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Trustee shall sign and countersign and deliver in
exchange therefor a like aggregate principal amount, in authorized denominations
for such Class, of definitive Certificates of the same Class. Until so
exchanged, such temporary Certificates shall in all respects be entitled to the
same benefits as definitive Certificates.

         (g) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates (other than the Residual Certificates), $1,000
and in each case increments of $1.00 in excess thereof, and (ii) in the case of
the Offered Subordinate Certificates, $25,000 and increments of $1.00 in excess
thereof, except that one Certificate of each such Class may be issued in a
different amount so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign Physical Certificates all in an aggregate principal amount that
shall equal the Current Principal Amount of such Class on the Closing Date. The
Private Certificates shall be issued in certificated fully-registered form in
minimum dollar denominations of $25,000 and integral multiples of $1.00 in
excess thereof, except that one Private Certificate of each Class may be issued
in a different amount so that the sum of the denominations of all outstanding
Private Certificates of such Class shall equal the Current Principal Amount of
such Class on the Closing Date. The Class R-I, Class R-II and Class R-III
Certificate shall each be issued in certificated fully-registered form, each, in
the denomination of $50. Each Class of Global Certificates, if any, shall be
issued in fully registered form in minimum dollar denominations of $50,000 and
integral multiples of $1.00 in excess thereof, except that one Certificate of
each Class may be in a different denomination so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Current Principal Amount of such Class on the Closing Date. On the Closing Date,
the Trustee shall execute and countersign (i) in the case of each Class of
Offered Certificates, the Certificate in the entire Current Principal Amount 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 Depositor
to the Depository or pursuant to the Depository's instructions, shall be
delivered by the Depositor on behalf of the Depository to and deposited with the
DTC Custodian. The Trustee shall sign the Certificates by facsimile or manual
signature and countersign them by manual signature on behalf of the Trustee by
one or more authorized signatories, each of whom shall be Responsible Officers
of the Trustee or its agent. A Certificate bearing the manual and facsimile
signatures of individuals who were the authorized signatories of the Trustee or
its agent at the time of issuance shall bind the Trustee, notwithstanding that
such individuals or any of them have ceased to hold such positions prior to the
delivery of such Certificate.



                                      -75-

<PAGE>



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

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

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

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

         (l) The following legend shall be placed on the Residual Certificates,
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, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
         1986, AS AMENDED, UNLESS THE PROPOSED TRANSFEREE PROVIDES THE
         TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO THE
         DEPOSITOR, TRUSTEE, MASTER SERVICER AND SECURITIES
         ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT IS SATISFACTORY
         TO THE TRUSTEE THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF
         SUCH PERSON WILL NOT RESULT IN OR CONSTITUTE A NONEXEMPT
         PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE LAW
         AND WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE
         PART OF THE DEPOSITOR, THE MASTER SERVICER, THE SECURITIES
         ADMINISTRATOR OR THE TRUSTEE.

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

         THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT


                                      -76-

<PAGE>



INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE
PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND
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 OBLIGATIONS ON THE PART OF THE DEPOSITOR,
THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL
CERTIFICATE OR UNLESS THE OPINION SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS
PROVIDED.

         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 (and the Trustee shall be fully protected in so doing) if (x) the
transferor has advised the Trustee in writing that the Certificate is being
transferred to an Institutional Accredited Investor; and (y) prior to the
transfer the transferee furnishes to the Trustee an Investment Letter (and the
Trustee shall be fully protected in so doing), provided that, if based upon an
Opinion of Counsel addressed to the Trustee 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



                                      -77-
<PAGE>


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:

                  (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.



                                      -78-
<PAGE>


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

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

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

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

         (h) Subject to the restrictions on transfer and exchange set forth in
this Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance equal
to the minimum authorized denomination set forth in Section 5.01(g) 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
the Corporate Trust Office, sign, countersign and deliver at the 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.



                                      -79-
<PAGE>


         (i) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at the Corporate Trust Office; 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
Depositor 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.

         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 Depositor, the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 6.01 and for all other purposes
whatsoever. None of the Depositor, the Trustee or any agent of the Depositor or
the Trustee shall be affected by



                                      -80-
<PAGE>


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 Depositor. As a
prerequisite to such consent, the proposed transferee must provide the Tax
Matters Person, the Depositor and the Trustee with an affidavit that the
proposed transferee is a Permitted Transferee (and 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 Depositor an affidavit in the form attached
hereto as Exhibit E stating, among other things, that as of the date of such
transfer (i) such transferee is a Permitted Transferee and that (ii) such
transferee is not acquiring such Residual Certificate for the account of any
person who is not a Permitted Transferee. The Tax Matters Person shall not
consent to a transfer of a Residual Certificate if it has actual knowledge that
any statement made in the affidavit issued pursuant to the preceding sentence is
not true. Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to any Person who is not a Permitted Transferee, such transfer, sale
or other disposition shall be deemed to be of no legal force or effect
whatsoever and such Person shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the
receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this Subsection 5.05(b), then the prior Holder
thereof shall, upon discovery that the transfer of such Residual Certificate was
not in fact permitted by this Subsection 5.05(b), be restored to all rights as a
Holder thereof retroactive to the date of the purported transfer. None of the
Trustee, the Tax Matters Person or the Depositor 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 Depositor, 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 Depositor to ensure that
the Residual Certificates are not transferred to any Person who is not a
Permitted Transferee and that any transfer of such Residual Certificates will
not cause the imposition of a tax upon the Trust or cause any REMIC to fail to
qualify as a REMIC.

         (c) 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.



                                      -81-
<PAGE>


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

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

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

         Section 5.07 ERISA RESTRICTIONS. (a) Subject to the provisions of
subsection (b), no Residual Certificates or Private Certificates may be acquired
directly or indirectly by, or on behalf of, an employee benefit plan or other
retirement arrangement which is subject to Title I of ERISA or Section 4975 of
the Code, unless the proposed transferee provides either (i) the Trustee, with
an Opinion of Counsel addressed to the Depositor, the Trustee, the Master
Servicer and the Securities Administrator (upon which they may rely) which is
satisfactory to the Trustee, which opinion will not be at the expense of the
Depositor, the Trustee, the Master Servicer or the Securities Administrator,
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 nonexempt
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Depositor, the Master Servicer, the Securities Administrator or the
Trustee to any obligation in addition to those undertaken in the Agreement or
(ii) in the case of the Class B-4, Class B-5 and Class B-6 Certificates, a
representation or certification to the Trustee (upon which the Trustee is
authorized to rely) to the effect that the proposed transfer and 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 Depositor, the



                                      -82-
<PAGE>


Securities Administrator, the Master Servicer or the Trustee to any obligation
in addition to those undertaken in the Agreement.

         (b) Any Person acquiring an interest in a Global Certificate which is a
Private Certificate, by acquisition of such Certificate, shall be deemed to have
represented to the Trustee that in the case of the Class B-4, Class B-5 and
Class B-6 Certificates, either: (i) it is not acquiring an interest in such
Certificate directly or indirectly by, or on behalf of, an employee benefit plan
or other retirement arrangement which is subject to Title I of ERISA or Section
4975 of the Code, or (ii) the transfer and holding of an interest in such
Certificate to that Person and the subsequent servicing, management and
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 Depositor, the
Securities Administrator, the Master Servicer or the Trustee to any obligation
in addition to those undertaken in the Agreement.

         (c) Each beneficial owner of a Class B-1, Class B-2 or Class B-3
Certificate or any interest therein shall be deemed to have represented, by
virtue of its acquisition or holding of that certificate or interest therein,
that either (i) it is not a Plan or investing with "Plan Assets", (ii) it has
acquired and is holding such certificate in reliance on Prohibited Transaction
Exemption 90-30, as amended from time to time (the "Exemption"), and that it
understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by S&P, Fitch Ratings or
Moody's Investors Service, Inc., and the certificate is so rated or (iii) (1) it
is an insurance company, (2) the source of funds used to acquire or hold the
certificate or interest therein is an "insurance company general account," as
such term is defined in Prohibited Transaction Class Exemption ("PTCE") 95-60,
and (3) the conditions in Sections I and III of PTCE 95-60 have been satisfied.

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



                                      -83-
<PAGE>


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.




                                      -84-
<PAGE>



                                   ARTICLE VI
                         Payments to Certificateholders

         Section 6.01 DISTRIBUTIONS ON THE CERTIFICATES. (a) Interest and
principal (as applicable) on the Certificates will be distributed monthly on
each Distribution Date, commencing in February 2004, in an amount equal to the
Available Funds on deposit in the Distribution Account for such Distribution
Date. On each Distribution Date, the Available Funds on deposit in the
Distribution Account shall be distributed as follows:


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

                  FIRST, to the Class I-A-1, Class I-A-2, Class I-A-3, Class
                  I-A-4, Class I-X, Class R-I, Class R-II and Class R-III
                  Certificates, on a pro rata basis, the Accrued Certificate
                  Interest on such Classes for such Distribution Date. As
                  described below, Accrued Certificate Interest on the Class
                  I-A-1, Class I-A-2, Class I-A-3, Class I-A-4, Class I-X, Class
                  R-I, Class R-II and Class R-III Certificates is subject to
                  reduction in the event of certain Net Interest Shortfalls
                  allocable thereto;

                  SECOND, to the Class I-A-1, Class I-A-2, Class I-A-3, Class
                  I-A-4, Class I-X, Class R-I, Class R-II and Class R-III
                  Certificates, on a pro rata basis, any Accrued Certificate
                  Interest thereon remaining undistributed from previous
                  Distribution Dates, to the extent of remaining Group I
                  Available Funds;

                  THIRD, to the Class R-I, Class R-II and Class R-III
                  Certificates, on a pro rata basis, in reduction of the Current
                  Principal Amounts thereof, the Group I Senior Optimal
                  Principal Amount for such Distribution Date to the extent of
                  remaining Group I Available Funds, until the Current Principal
                  Amount of each such Class has been reduced to zero;

                  FOURTH, to the Class I-A-1 Certificates and Class I-A-2
                  Certificates, on a pro rata basis, in reduction of the Current
                  Principal Amounts thereof, the remaining Group I Senior
                  Optimal Principal Amount for such Distribution Date to the
                  extent of remaining Group I Available Funds, until the Current
                  Principal Amount of each such Class has been reduced to zero;

                  FIFTH, to the Class I-PO Certificates, the related Class I-PO
                  Certificate Principal Distribution Amount for such
                  Distribution Date to the extent of the remaining Group I
                  Available Funds, until the Current Principal Amount thereof
                  has been reduced to zero; and

                  SIXTH, to the Class I-PO Certificates, the Class I-PO
                  Certificate Deferred Amount to the extent of the remaining
                  Group I Available Funds, provided, that (i) such distributions
                  shall not reduce the Current Principal Amount of the Class
                  I-PO Certificates and (ii) no distribution will be made in
                  respect of the Class I-PO Certificate Deferred Amount on or
                  after the Cross-Over Date.




                                      -85-
<PAGE>


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

                  FIRST, to the Class II-A-1, Class II-A-2, Class II-A-3 and
                  Class II-X Certificates, on a pro rata basis, the Accrued
                  Certificate Interest on such Classes for such Distribution
                  Date. As described below, Accrued Certificate Interest on the
                  Class II-A-1, Class II-A-2, Class II-A-3 and Class II-X
                  Certificates is subject to reduction in the event of certain
                  Net Interest Shortfalls allocable thereto;

                  SECOND, to the Class II-A-1, Class II-A-2, Class II-A-3 and
                  Class II-X Certificates, any Accrued Certificate Interest
                  thereon remaining undistributed from previous Distribution
                  Dates, to the extent of remaining Group II Available Funds;


                  THIRD, to the Class II-A-1 Certificates and Class II-A-2
                  Certificates, on a pro rata basis, in reduction of the Current
                  Principal Amounts thereof, the Group II Senior Optimal
                  Principal Amount for such Distribution Date to the extent of
                  remaining Group II Available Funds, until the Current
                  Principal Amount of each such Class has been reduced to zero;

                  FOURTH, to the Class II-PO Certificates, the Class II-PO
                  Certificate Principal Distribution Amount for such
                  Distribution Date to the extent of the remaining Group II
                  Available Funds, until the Current Principal Amount thereof
                  has been reduced to zero; and

                  FIFTH, to the Class II-PO Certificates, the Class II-PO
                  Certificate Deferred Amount to the extent of the remaining
                  Group II Available Funds, provided, that (i) such
                  distributions shall not reduce the Current Principal Amount of
                  the Class II-PO Certificates and (ii) no distribution will be
                  made in respect of the Class II-PO Certificate Deferred Amount
                  on or after the Cross-Over Date.


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

                  FIRST, to the Class III-A-1 Certificates, the Accrued
                  Certificate Interest on such Class for such Distribution Date.
                  As described below, Accrued Certificate Interest on the Class
                  III-A-1 Certificates is subject to reduction in the event of
                  certain Net Interest Shortfalls allocable thereto;

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

                  THIRD, to the Class III-A-1 Certificates, in reduction of the
                  Current Principal Amount thereof, the Group III Senior Optimal
                  Principal Amount for such Distribution Date



                                      -86-
<PAGE>


                  to the extent of remaining Group III Available Funds, until
                  the Current Principal Amount of such Class has been reduced to
                  zero.


                  (iv) Except as provided in paragraphs (v) and (vi) below, on
each Distribution Date on or prior to the Cross-Over Date, an amount equal to
the sum of the remaining Group I, Group II and Group III Available Funds after
the distributions in (i) and (ii) above will be distributed 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, in each case, to the extent of the remaining
Group I, Group II and Group III Available Funds.

                  (v) On each Distribution Date prior to the Cross-Over Date,
but after the reduction of the Current Principal Amount of all of the Senior
Certificates of a Certificate Group (other than the Interest Only Certificates
and Principal Only Certificates, as applicable) to zero, the Classes of Senior
Certificates (other than the Interest Only Certificates and Principal Only
Certificates, as applicable) in the remaining Certificate Groups will be
entitled to receive in reduction of their Current Principal Amounts, pro rata
based upon their Current Principal Amounts immediately prior to such
Distribution Date, in addition to any Principal Prepayments related to such
remaining Senior Certificates' respective Loan Group allocated to such Senior
Certificates, 100% of the Non-PO Percentage of the Principal Prepayments on any
Mortgage Loan in the Loan Group relating to the Senior Certificates of the fully
repaid Certificate Group; provided, however, that if (A) the weighted average of
the Subordinate Percentages on such Distribution Date equals or exceeds two
times the initial weighted average of the Subordinate Percentages and (B) 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 aggregate Current Principal Amount of the Subordinate Certificates does not
exceed 50%, then the additional allocation of Principal Prepayments to such
remaining Class or Classes of Senior Certificates in accordance with this clause
(v) will not be made and 100% of the Non-PO Percentage of the Principal
Prepayments on any Mortgage Loan in the Loan Group relating to the fully repaid
Class or Classes of Senior Certificates will be allocated to the Subordinate
Certificates.

                  (vi) If on any Distribution Date on which the aggregate
Current Principal Amount of the Group I, Group II or Group III Senior
Certificates (other than the Interest Only Certificates and Principal Only
Certificates) would be greater than the aggregate Scheduled Principal Balance of
the Mortgage Loans in the related Loan Group (other than the PO Percentage of
the related Discount Mortgage Loans) and any Subordinate Certificates are still
outstanding, in each case after giving effect to distributions to be made on
such Distribution Date, (A) 100% of amounts otherwise allocable to the
Subordinate Certificates in respect of principal will be distributed to the
Group I, Group II and Group III Senior Certificates (other than the Interest
Only Certificates and Principal Only Certificates), as applicable, in reduction
of the Current Principal Amounts thereof, until the aggregate Current Principal
Amount of such Class or Classes of Senior Certificates is an amount equal to the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan
Group (other than the PO Percentage of the related Discount Mortgage Loans), and
(B) the Accrued



                                      -87-
<PAGE>


Certificate Interest otherwise allocable to the Subordinate Certificates on such
Distribution Date will be reduced, if necessary, and distributed to such Class
or Classes of Senior Certificates in an amount equal to the Accrued Certificate
Interest for such Distribution Date on the excess of (x) the aggregate Current
Principal Amount of such Class or Classes of Senior Certificates over (y) the
aggregate Scheduled Principal Balance of the Mortgage Loans in the related Loan
Group (other than the PO Percentage of the related Discount Mortgage Loans). Any
such reduction in the Accrued Certificate Interest on the Subordinate
Certificates will be allocated in reverse order of the Subordinate Certificates
numerical designations, commencing with the Class B-6 Certificates.

                  (vii) If, after distributions have been made pursuant to
priorities FIRST and SECOND of clause (i) above on any Distribution Date, the
remaining Group I Available Funds are less than the sum of the Group I Senior
Optimal Principal Amount and Class I-PO Certificate Principal Distribution
Amount, such amounts shall be reduced, and such remaining funds will be
distributed to the Group I Senior Certificates (other than the Class I-A-3,
Class I-A-4 and Class I-X Certificates) on the basis of such reduced amounts.
Notwithstanding any reduction in principal distributable to the Class I-PO
Certificates pursuant to this paragraph, the principal balance of the Class I-PO
Certificates shall be reduced not only by principal so distributed but also by
the difference between (i) principal distributable to the Class I-PO
Certificates in accordance with priority FIFTH of clause (i) above, and (ii)
principal actually distributed to the Class I-PO Certificates after giving
effect to this paragraph. The Class I-PO Certificate Cash Shortfall for the
Class I-PO Certificates with respect to any Distribution Date will be added to
the Class I-PO Certificate Deferred Amount.

                  (viii) If, after distributions have been made pursuant to
priorities FIRST and SECOND of clause (ii) above on any Distribution Date, the
remaining Group II Available Funds is less than the sum of the Group II Senior
Optimal Principal Amount, such amounts shall be reduced, and such remaining
funds will be distributed to the Group II Senior Certificates (other than the
Class I-A-3 Certificates and Class II-X Certificates) on the basis of such
reduced amounts. Notwithstanding any reduction in principal distributable to the
Class II-PO Certificates pursuant to this paragraph, the principal balance of
the Class II-PO Certificates shall be reduced not only by principal so
distributed but also by the difference between (i) principal distributable to
the Class II-PO Certificates in accordance with priority FOURTH of clause (ii)
above, and (ii) principal actually distributed to the Class II-PO Certificates
after giving effect to this paragraph. The Class II-PO Certificate Cash
Shortfall for the Class II-PO Certificates with respect to any Distribution Date
will be added to the Class II-PO Certificate Deferred Amount.

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

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



                                      -88-
<PAGE>


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

         (e) If on any Distribution Date the Available Funds for the Senior
Certificates in any Certificate Group is less than the Accrued Certificate
Interest on the related Senior Certificates for such Distribution Date prior to
reduction for Net Interest Shortfalls and the interest portion of Realized
Losses, the shortfall will be allocated among the holders of each Class of
Senior Certificates in such Certificate Group in proportion to the respective
amounts of Accrued Certificate Interest that would have been allocated thereto
in the absence of such Net Interest Shortfalls 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.

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

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

         (b) Realized Losses with respect to a Mortgage Loan will be allocated
on a pro rata basis between the PO Percentage of the Scheduled Principal Balance
of such Mortgage Loan and the Non-PO Percentage of such Scheduled Principal
Balance.

         (c) On each Distribution Date, the PO Percentage of the principal
portion of any Realized Loss on a Discount Mortgage Loan and any Class PO
Certificate Cash Shortfall will be allocated to the related Principal Only
Certificates until the Current Principal Amount of those Principal Only
Certificates is reduced to zero. With respect to any Distribution Date through
the Cross-Over Date, the aggregate of all amounts so allocable to a class of
Principal Only Certificates on such date in respect of any Realized Losses and
any related Class PO Certificate Cash Shortfalls and all amounts previously
allocated in respect of such Realized Losses or Class PO Certificate Cash
Shortfalls and not distributed on prior Distribution Dates will be the related
"Class PO Certificate Deferred Amount." To the extent funds are available
therefor on any Distribution Date through the Cross-Over Date, distributions in
respect of the Class I-PO Certificate Deferred Amount will be made in accordance
with priority SIXTH of Section 6.01(a)(i), and distributions in respect of the
Class II-PO Certificate Deferred Amount will be made in accordance with priority
FIFTH of Section 6.01(a)(ii). No interest will accrue on the Class I-PO
Certificate Deferred Amounts or Class II-PO Certificate Deferred Amounts. On
each Distribution Date through the Cross-Over Date, the Current



                                      -89-
<PAGE>


Principal Amount of the lowest ranking Class of Subordinate Certificates then
outstanding will be reduced by the amount of any distributions in respect of any
Class PO Certificate Deferred Amount on such Distribution Date which would
otherwise be paid as principal to the Subordinate Certificates in accordance
with the priorities set forth above, through the operation of the Subordinate
Certificate Writedown Amount. After the Cross-Over Date, no more distributions
will be made in respect of, and applicable Realized Losses and Class PO
Certificate Cash Shortfalls allocable to the Principal Only Certificates will
not be added to, the related Class PO Certificate Deferred Amount.

         (d) The applicable Non-PO Percentage of the principal portion of
Realized Losses on the Mortgage Loans will be allocated on any Distribution Date
as follows: first, to the Class B-6 Certificates; second, to the Class B-5
Certificates; third, to the Class B-4 Certificates; fourth, to the Class B-3
Certificates; fifth, to the Class B-2 Certificates; and sixth, to the Class B-1
Certificates, in each case until the Current Principal Amount of such class has
been reduced to zero. The applicable Non-PO Percentage of the principal portion
of any Excess Loss for any Distribution Date will be allocated pro rata among
all outstanding Classes of Certificates (other than the Interest Only
Certificates and Principal Only Certificates) based on their Current Principal
Amounts. Once the Subordinate Certificates have been reduced to zero, the
applicable Non-PO Percentage of the principal portion of Realized Losses on the
Mortgage Loans in a Loan Group will be allocated on any Distribution Date to the
Class or Classes of Senior Certificates (other than the Interest Only
Certificates and Principal Only Certificates) of the related Certificate Group,
pro rata, based upon their respective current principal amounts. Once the Senior
Certificates (other than the Interest Only Certificates and Principal Only
Certificates) of a Certificate Group have been reduced to zero, the applicable
Non-PO Percentage of the principal portion of Realized Losses on the Mortgage
Loans in the related Loan Group (if any) will be allocated on a pro rata basis
to the remaining Senior Certificates (other than the Interest Only Certificates
and Principal Only Certificates) of the other Certificate Groups.

         (e) Notwithstanding the foregoing clause (d), 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 the Mortgage Loans 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 Limit").

         (f) Any Realized Losses allocated to a Class of Certificates shall be
allocated among the Certificates of such Class (other than the Interest Only
Certificates) 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.

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

         (h) On each Distribution Date, the Securities Administrator shall
determine and notify the Trustee of the Subordinate Certificate Writedown
Amount. Any Subordinate Certificate



                                      -90-
<PAGE>


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, in accordance with priorities set forth in clause (b) above, which
reduction shall occur on such Distribution Date after giving effect to
distributions made on such Distribution Date.

         (i) Any Net Interest Shortfall will be allocated among the Classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfall for such Distribution Date. The interest portion of any
Realized Losses with respect to the 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 on the Mortgage Loans 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 to the Senior Certificates.

         (j) Any Deficient Valuation will on each Distribution Date be allocated
solely to the Subordinate Certificates until the Bankruptcy Coverage Termination
Date. The Bankruptcy Loss Amount and the related coverage levels may be reduced
or modified upon written confirmation from the related Rating Agencies that such
reduction or modification will not adversely affect the then current ratings of
the Senior Certificates by the related Rating Agencies. Such reduction may
adversely affect the coverage provided by subordination with respect to
Bankruptcy Losses. Any Fraud Loss will on each Distribution Date be allocated
solely to the Subordinate Certificates until the Fraud Coverage Termination
Date. Any Special Hazard Loss will on each Distribution Date be allocated solely
to the outstanding Subordinate Certificates until the Special Hazard Termination
Date.

         Section 6.03 PAYMENTS. (a) On each Distribution Date, other than the
final Distribution Date, the Trustee shall distribute to each Certificateholder
of record as of the immediately preceding Record Date the Certificateholder's
pro rata share of its Class (based on the aggregate Fractional Undivided
Interest represented by such Holder's Certificates) of all amounts required to
be distributed on such Distribution Date to such Class, based on information
provided to the Trustee by the Securities Administrator. The Securities
Administrator shall calculate the amount to be distributed to each Class and,
based on such amounts, the Securities Administrator shall determine the amount
to be distributed to each Certificateholder. All of the Securities
Administrator's calculations of payments shall be based solely on information
provided to the Securities Administrator by the Master Servicer. Neither the
Securities Administrator nor the Trustee shall be required to confirm, verify or
recompute any information provided to it by the Master Servicer and/or the
Securities Administrator, as applicable, 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



                                      -91-
<PAGE>


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

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

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

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

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

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

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

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

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

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

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

                  (x) with respect to each Mortgage Loan which incurred a
Realized Loss during the related Prepayment Period, (i) the loan number, (ii)
the Scheduled Principal Balance of such



                                      -92-
<PAGE>


Mortgage Loan as of the Cut-off Date, (ii) the Scheduled Principal Balance of
such Mortgage Loan as of the beginning of the related Due Period, (iii) the Net
Liquidation Proceeds with respect to such Mortgage Loan and (iv) the amount of
the Realized Loss with respect to such Mortgage Loan;

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

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

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

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

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

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

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

                  (xviii) the Average Loss Severity Percentage for each Loan
Group;

                  (xix) the amount of Special Hazard Losses, Fraud Losses,
Bankruptcy Losses and Extraordinary Losses on such Distribution Date and in the
aggregate for all prior Distribution Dates; and

                  (xx) the then applicable Senior Percentage, Senior Prepayment
Percentage, Subordinate Percentage and Subordinate Prepayment Percentage for
each Loan Group.



                                      -93-
<PAGE>


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

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

         (b) By April 30 of each year beginning in 2005, the Trustee will
furnish such report to each Holder of the Certificates of record at any time
during the prior calendar year as to the aggregate of amounts reported pursuant
to subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Securities Administrator may determine and advises
the Trustee to be necessary and/or to be required by the Internal Revenue
Service or by a federal or state law or rules or regulations to enable such
Holders to prepare their tax returns for such calendar year. Such obligations
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Securities Administrator or the
Trustee pursuant to the requirements of the Code.

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

         Section 6.06 COMPENSATING INTEREST PAYMENTS. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the lesser of (i) the sum
of (x) the aggregate amounts required to be paid by the Servicers under the
Servicing Agreements with respect to subclauses (a) and (b) of the definition of


                                      -94-
<PAGE>


Interest Shortfall with respect to the Mortgage Loans for the related
Distribution Date, and not so paid by the related Servicers and (y) with respect
to the Wells Fargo Guide Mortgage Loans, the amount calculated pursuant to
subclause (b) of the definition of Interest Shortfall for the related
Distribution Date and (ii) the Master Servicer Compensation for such
Distribution Date (such amount, the "Compensating Interest Payment"). The Master
Servicer shall not be entitled to any reimbursement of any Compensating Interest
Payment.



                                      -95-
<PAGE>



                                   ARTICLE VII
                               The Master Servicer

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

         Section 7.02 MERGER OR CONSOLIDATION OF THE MASTER SERVICER.

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

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

         Section 7.03 INDEMNIFICATION OF THE TRUSTEE, THE MASTER SERVICER AND
THE SECURITIES ADMINISTRATOR. (a) The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss, liability
or expense (including reasonable legal fees and disbursements of counsel)
incurred on their part that may be sustained in connection with, arising out of,
or relating to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement, the Servicing Agreements, the
Assignment Agreements, the Custodial Agreement or the Certificates or the powers
of attorney delivered by the Trustee hereunder (i) related to the Master
Servicer's failure to perform its duties in compliance with this Agreement
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) or (ii) incurred by reason of the Master Servicer's
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder, provided, in each case, that with respect to any such claim or legal
action (or pending or threatened claim or legal action), the Trustee shall have
given the Master Servicer and the Depositor written notice thereof promptly
after the Trustee shall have with respect to such claim or legal action
knowledge thereof. The Master Servicer's failure to receive any such notice
shall not affect the Trustee's right to indemnification hereunder, except to the
extent the Master Servicer's defense of such claim or legal action is materially
prejudiced by such failure to give notice. This indemnity shall survive the
resignation or removal of the Trustee, Master Servicer or the Securities
Administrator and the termination of this Agreement.

         (b) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise covered by the
Master Servicer's indemnification pursuant to Subsection (a) above.



                                      -96-
<PAGE>


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

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

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

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

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

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



                                      -97-
<PAGE>


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

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

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

         Section 7.06 SUCCESSOR MASTER SERVICER. In connection with the
appointment of any successor master servicer or the assumption of the duties of
the Master Servicer, the Company or the Trustee may make such arrangements for
the compensation of such successor master servicer out of payments on the
Mortgage Loans as the Company or the Trustee and such successor master servicer
shall agree. If the successor master servicer does not agree that such market
value is a fair price, such successor master servicer shall obtain two
quotations of market value from third parties actively engaged in the servicing
of single-family mortgage loans. Notwithstanding the foregoing, the compensation
payable to a successor master servicer may not exceed the compensation which the
Master Servicer would have been entitled to retain if the Master Servicer had
continued to act as Master Servicer hereunder.

                  The Master Servicer shall notify the Wells Fargo Guide
Servicers of the appointment of any successor master servicer or of the
assumption of the duties of the Master Servicer and shall promptly instruct the
Wells Fargo Guide Servicers to direct all remittances and reports required to be
delivered by the related Wells Fargo Guide Servicer pursuant to the terms of the
Wells Fargo Guide to the successor master servicer in accordance with such
instructions as the successor master servicer shall provide; provided, however,
that if the Master Servicer fails to provide such instructions, the successor
master servicer shall provide such instructions. The Master Servicer shall
execute and deliver such instruments and do such other things all as may be
reasonably required to more fully and definitely vest and confirm in the
successor master servicer all the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer with regard to the
supervision and oversight of the Wells Fargo Guide Servicers vested in the
Master Servicer under this Agreement. The Master Servicer agrees that it shall
promptly remit to the successor master servicer all funds received in respect of
any Mortgage Loan or which are otherwise collected by the Master Servicer from
the Wells Fargo Guide Servicers in respect of any Mortgage Loan following the
effective date of the appointment of the successor master servicer.



                                      -98-
<PAGE>


         Section 7.07 SALE AND ASSIGNMENT OF MASTER SERVICING. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in its entirety as Master Servicer under this Agreement and the Company may
terminate the Master Servicer without cause and select a new Master Servicer;
provided, however, that: (i) the purchaser or transferee accepting such
assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for Fannie Mae or Freddie Mac; (b) shall have a net worth
of not less than $10,000,000 (unless otherwise approved by each Rating Agency
pursuant to clause (ii) below); (c) shall be reasonably satisfactory to the
Trustee (as evidenced in a writing signed by the Trustee); and (d) shall execute
and deliver to the Trustee an agreement, in form and substance reasonably
satisfactory to the Trustee, which contains an assumption by such Person of the
due and punctual performance and observance of each covenant and condition to be
performed or observed by it as master servicer under this Agreement, any
custodial agreement from and after the effective date of such agreement; (ii)
each Rating Agency shall be given prior written notice of the identity of the
proposed successor to the Master Servicer and each Rating Agency's rating of the
Certificates in effect immediately prior to such assignment, sale and delegation
will not be downgraded, qualified or withdrawn as a result of such assignment,
sale and delegation, as evidenced by a letter to such effect delivered to the
Master Servicer and the Trustee; (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an Officer's Certificate and
an Opinion of Independent Counsel addressed to the Trustee, each stating that
all conditions precedent to such action under this Agreement have been completed
and such action is permitted by and complies with the terms of this Agreement;
and (iv) in the event the Master Servicer is terminated without cause by the
Company, the Company shall pay the terminated Master Servicer a termination fee
equal to 0.25% of the aggregate Scheduled Principal Balance of the Mortgage
Loans at the time the master servicing of the Mortgage Loans is transferred to
the successor Master Servicer. No such assignment or delegation shall affect any
liability of the Master Servicer arising prior to the effective date thereof.




                                      -99-
<PAGE>



                                  ARTICLE VIII
                                     Default

         Section 8.01 EVENTS OF DEFAULT. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) and
only with respect to the defaulting Master Servicer:


                  (i) The Master Servicer fails to cause to be deposited in the
Distribution Account any amount so required to be deposited pursuant to this
Agreement (other than a Monthly Advance), and such failure continues unremedied
for a period of three Business Days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Master Servicer; or


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


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


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

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


                  (vi) The Master Servicer fails to deposit, or cause to be
deposited, in the Distribution Account any Monthly Advance (other than a
Nonrecoverable Advance) by 5:00 p.m. New York City time on the Distribution
Account Deposit Date.



                                     -100-
<PAGE>


In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of the Company, may
terminate all of the rights and obligations (but not the liabilities) of the
Master Servicer under this Agreement and in and to the Mortgage Loans and/or the
REO Property serviced by the Master Servicer and the proceeds thereof. Upon the
receipt by the Master Servicer of the written notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates, the Mortgage Loans, REO Property or under any other related
agreements (but only to the extent that such other agreements relate to the
Mortgage Loans or related REO Property) shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the Trustee
pursuant to this Section 8.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's rights and
obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of the
Trust or which thereafter become part of the Trust; and (ii) originals or copies
of all documents of the Master Servicer reasonably requested by the Trustee to
enable it to assume the Master Servicer's duties thereunder. In addition to any
other amounts which are then, or, notwithstanding the termination of its
activities under this Agreement, may become payable to the Master Servicer under
this Agreement, the Master Servicer shall be entitled to receive, out of any
amount received on account of a Mortgage Loan or related REO Property, that
portion of such payments which it would have received as reimbursement under
this Agreement if notice of termination had not been given. The termination of
the rights and obligations of the Master Servicer shall not affect any
obligations incurred by the Master Servicer prior to such termination.

         Notwithstanding the foregoing, if an Event of Default described in
clause (vi) of this Section 8.01 shall occur, the Trustee shall, by notice in
writing to the Master Servicer, which may be delivered by telecopy, immediately
terminate all of the rights and obligations of the Master Servicer thereafter
arising under this Agreement, but without prejudice to any rights it may have as
a Certificateholder or to reimbursement of Monthly Advances and other advances
of its own funds, and the Trustee shall act as provided in Section 8.02 to carry
out the duties of the Master Servicer, including the obligation to make any
Monthly Advance the nonpayment of which was an Event of Default described in
clause (vi) of this Section 8.01. Any such action taken by the Trustee must be
prior to the distribution on the relevant Distribution Date.

         Section 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties to a
Person which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities,



                                     -101-
<PAGE>


duties, liabilities and limitations on liabilities relating thereto placed on
the Master Servicer by the terms and provisions hereof (including the
requirement to make Monthly Advances pursuant to Section 6.05); provided,
however, that the Company shall have the right to either (a) immediately assume
the duties of the Master Servicer or (b) select a successor Master Servicer;
provided further, however, that the Trustee shall have no obligation whatsoever
with respect to any liability (other than advances deemed recoverable and not
previously made) incurred by the Master Servicer at or prior to the time of
termination. As compensation therefor, but subject to Section 7.06, the Trustee
shall be entitled to compensation which the Master Servicer would have been
entitled to retain if the Master Servicer had continued to act hereunder, except
for those amounts due the Master Servicer as reimbursement permitted under this
Agreement for advances previously made or expenses previously incurred.
Notwithstanding the above, the Trustee may, if it shall be unwilling so to act,
or shall, if it is legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution which is a Fannie Mae- or Freddie Mac-approved servicer, and with
respect to a successor to the Master Servicer only, having a net worth of not
less than $10,000,000, as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder; provided, that the Trustee shall obtain a letter
from each Rating Agency that the ratings, if any, on each of the Certificates
will not be lowered as a result of the selection of the successor to the Master
Servicer. Pending appointment of a successor to the Master Servicer hereunder,
the Trustee shall act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on the Mortgage Loans as it
and such successor shall agree; provided, however, that the provisions of
Section 7.06 shall apply, the compensation shall not be in excess of that which
the Master Servicer would have been entitled to if the Master Servicer had
continued to act hereunder, and that such successor shall undertake and assume
the obligations of the Trustee to pay compensation to any third Person acting as
an agent or independent contractor in the performance of master servicing
responsibilities hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.

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

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

         Section 8.04 WAIVER OF DEFAULTS. The Trustee shall transmit by mail to
all Certificateholders, within 60 days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Trustee, unless such
Event of Default shall have been cured, notice of each such Event of Default.
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



                                     -102-
<PAGE>


default by the Master Servicer in the performance of its obligations hereunder
and the consequences thereof, except a default in the making of or the causing
to be made any required distribution on the Certificates, which default may only
be waived by Holders of Certificates evidencing Fractional Undivided Interests
aggregating 100% of the Trust Fund. 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. All
costs and expenses incurred by the Trustee in connection with the removal of the
Master Servicer shall, to the extent not paid by the terminated Master Servicer,
be reimbursed to the Trustee pursuant to Section 9.05.

         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.



                                     -103-
<PAGE>


                                   ARTICLE IX
             Concerning the Trustee and the Securities Administrator

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

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

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

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

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

                  (ii) Neither the Trustee nor the Securities Administrator
shall be liable in its individual capacity for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee or an
officer of the Securities Administrator, respectively, unless


                                      -104-

<PAGE>



it shall be proved that the Trustee or the Securities Administrator,
respectively, was negligent in ascertaining the pertinent facts;

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

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

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

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

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

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

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



                                      -105-

<PAGE>



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

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

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

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

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

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

                  (v) Neither the Trustee nor the Securities Administrator shall
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund and provided
that the payment within a reasonable time to the Trustee or the Securities
Administrator, as applicable, of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of the
Trustee or the Securities Administrator, as applicable, reasonably assured to
the Trustee or the Securities Administrator, as applicable, by the security
afforded to it by the terms of this Agreement. The


                                      -106-

<PAGE>



Trustee or the Securities Administrator may require reasonable indemnity against
such expense or liability as a condition to taking any such action. The
reasonable expense of every such examination shall be paid by the
Certificateholders requesting the investigation;

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

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

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

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

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

         Section 9.03 TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR
CERTIFICATES OR MORTGAGE LOANS. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of the Depositor, and neither
the Trustee, or the Custodian on its behalf, nor the Securities Administrator
shall have any responsibility for their correctness. Neither the Trustee nor the
Securities Administrator makes any representation as to the validity or
sufficiency of the Certificates (other than the signature and countersignature
of the Trustee on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the foregoing
shall not relieve the Trustee, or the Custodian on its behalf, of the obligation
to review the Mortgage Files pursuant to Sections 2.02 and 2.04. The Trustee's
signature and countersignature (or countersignature of its agent) on the
Certificates shall be solely in its capacity as Trustee and shall not constitute
the Certificates an obligation of the Trustee in any other capacity. Neither the
Trustee or the Securities Administrator shall be accountable for the use or
application by the Depositor of any of the


                                      -107-

<PAGE>



Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor with respect to the Mortgage
Loans. Neither the Trustee nor the Securities Administrator shall be responsible
for the legality or validity of this Agreement or any document or instrument
relating to this Agreement, the validity of the execution of this Agreement or
of any supplement hereto or instrument of further assurance, or the validity,
priority, perfection or sufficiency of the security for the Certificates issued
hereunder or intended to be issued hereunder. Neither the Trustee nor the
Securities Administrator shall at any time have any responsibility or liability
for or with respect to the legality, validity and enforceability of any Mortgage
or any Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust Fund or its ability to generate the payments to be
distributed to Certificateholders, under this Agreement. Neither the Trustee nor
the Securities Administrator shall have any responsibility for filing any
financing statement or continuation statement in any public office at any time
or to otherwise perfect or maintain the perfection of any security interest or
lien granted to it hereunder or to record this Agreement.

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

         Section 9.05 TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND
EXPENSES. The fees and expenses of the Trustee and the Securities Administrator
shall be paid in accordance with a side letter agreement between the Trustee and
the Master Servicer. In addition, the Trustee and the Securities Administrator
will be entitled to recover from the Master Servicer Collection Account pursuant
to Section 4.03(b) all reasonable out-of-pocket expenses, disbursements and
advances and the expenses of the Trustee and the Securities Administrator,
respectively, in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee or the Securities
Administrator, respectively, or any other cost, liability or expense arising out
of or in connection with this Agreement, the Servicing Agreements, the Custodial
Agreement, the Assignment Agreements or the Certificates (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.
If funds in the Master Servicer Collection Account are insufficient therefor,
the Trustee and the Securities Administrator shall recover such expenses from
the Depositor and the Depositor hereby agrees to pay such expenses,
disbursements or advances upon demand. 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 AND SECURITIES
ADMINISTRATOR. The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a


                                      -108-

<PAGE>



successor Trustee, $50,000,000, subject to supervision or examination by federal
or state authority and, in the case of the Trustee, rated "BBB" or higher by S&P
or Fitch Ratings with respect to their long-term rating and rated "BBB" or
higher by S&P or Fitch Ratings and "Baa2" or higher by Moody's with respect to
any outstanding long-term unsecured unsubordinated debt, and, in the case of a
successor Trustee or successor Securities Administrator other than pursuant to
Section 9.10, rated in one of the two highest long-term debt categories of, or
otherwise acceptable to, each of the Rating Agencies. If the Trustee publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section 9.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set
forth in its most recent report of condition so published. In case at any time
the Trustee or the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 9.06, the Trustee or the
Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 9.08.

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

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

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


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Securities Administrator, as applicable, so removed, the successor Trustee or
Securities Administrator, as applicable.

         (c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund may at any time remove
the Trustee or the Securities Administrator and appoint a successor Trustee or
Securities Administrator by written instrument or instruments, in quadruplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Depositor, the Master
Servicer, the Securities Administrator (if the Trustee is removed), the Trustee
(if the Securities Administrator is removed), and the Trustee or Securities
Administrator so removed and the successor so appointed. In the event that the
Trustee or Securities Administrator is removed by the Holders of Certificates in
accordance with this Section 9.08(c), the Holders of such Certificates shall be
responsible for paying any compensation payable to a successor Trustee or
successor Securities Administrator, in excess of the amount paid to the
predecessor Trustee or predecessor Securities Administrator, as applicable.

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

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

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

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



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

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

         (b) If the Depositor 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 Depositor.

         (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


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<PAGE>



conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee or separately, as may
be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.

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

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

         Section 9.12 FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS; REMIC ADMINISTRATION. (a) For federal income tax purposes,
the taxable year of each REMIC shall be a calendar year and the Securities
Administrator shall maintain or cause the maintenance of the books of each such
REMIC on the accrual method of accounting.

         (b) The Securities Administrator shall prepare and file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Federal tax
information returns or elections required to be made hereunder with respect to
each 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 250% PSA). The Securities Administrator will
apply for an Employee Identification Number from the IRS under Form SS-4 or any
other acceptable method for all tax entities. In connection with the foregoing,
the Securities Administrator shall timely prepare and file, and the Trustee
shall sign, IRS Form 8811, which shall provide the name and address of the
person who can be contacted to obtain information required to be reported to the
holders of regular interests in each REMIC (the "REMIC Reporting Agent"). The
Trustee shall make elections to treat each REMIC as a REMIC (which elections
shall apply to the taxable period ending December 31, 2004 and each calendar
year thereafter) in such manner as the Code or applicable Treasury regulations
may prescribe, and as described by the Securities Administrator. The Trustee
shall sign all tax information returns filed pursuant to this Section and any
other returns as may be required by the Code. The Holder of the Class R-I
Certificate is hereby designated as the "Tax Matters Person" (within the meaning
of Treas. Reg. ss.ss.1.860F-4(d)) for REMIC I, the Holder of the Class R-II
Certificate is hereby designated as the "Tax Matters Person" for REMIC II and
the Holder of the Class R-III Certificate is hereby designated as the "Tax
Matters Person" for REMIC III. The Securities Administrator is hereby designated
and appointed as the agent of each such Tax Matters Person. Any Holder of a
Residual Certificate will by acceptance thereof appoint the Securities
Administrator as


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<PAGE>



agent and attorney-in-fact for the purpose of acting as Tax Matters Person for
each REMIC during such time as the Securities Administrator does not own any
such Residual Certificate. In the event that the Code or applicable Treasury
regulations prohibit the Trustee from signing tax or information returns or
other statements, or the Securities Administrator from acting as agent for the
Tax Matters Person, the Trustee and the Securities Administrator shall take
whatever action that in its sole good faith judgment is necessary for the proper
filing of such information returns or for the provision of a tax matters person,
including designation of the Holder of a Residual Certificate to sign such
returns or act as tax matters person. Each Holder of a Residual Certificate
shall be bound by this Section.

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

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

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

         (f) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants and the Securities Administrator's covenants, respectively,
set forth in this Section 9.12; provided, however, such liability and obligation
to indemnify in this paragraph shall not be joint and several and neither the
Trustee nor the Securities Administrator shall be liable or be obligated to
indemnify the Trust Fund for the failure by the other to perform any duty under
this Agreement or the breach by the other of any covenant in Section 9.12 of
this Agreement.


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                                    ARTICLE X
                                   Termination

         Section 10.01 TERMINATION UPON REPURCHASE BY THE DEPOSITOR OR ITS
DESIGNEE OR LIQUIDATION OF THE MORTGAGE LOANS.

         (a) Subject to Section 10.02, the respective obligations and
responsibilities of the Depositor, the Trustee, the Master Servicer and the
Securities Administrator created hereby, other than the obligation of the
Trustee to make payments to Certificateholders as hereinafter set forth shall
terminate upon:

                  (i) the repurchase by or at the direction of the Depositor or
its designee of all of the Mortgage Loans and all related REO Property remaining
in the Trust at a price (in each case, the "Termination Purchase Price") equal
to the sum of (a) 100% of the Outstanding Principal Balance of each Mortgage
Loan (other than a Mortgage Loan related to REO Property) as of the date of
repurchase, net of the principal portion of any unreimbursed Monthly Advances
made by the purchaser, together with interest at the applicable Mortgage
Interest Rate accrued but unpaid to, but not including, the first day of the
month of repurchase, (b) the appraised value of any related REO Property, less
the good faith estimate of the Depositor of liquidation expenses to be incurred
in connection with its disposal thereof (but not more than the Outstanding
Principal Balance of the related Mortgage Loan, together with interest at the
applicable Mortgage Interest Rate accrued on that balance but unpaid to, but not
including, the first day of the month of repurchase), such appraisal to be
calculated by an appraiser mutually agreed upon by the Depositor and the Trustee
at the expense of the Depositor, (c) unreimbursed out-of pocket costs of the
Master Servicer, including unreimbursed servicing advances and the principal
portion of any unreimbursed Monthly Advances, made on the Mortgage Loans prior
to the exercise of such repurchase right and (d) any unreimbursed costs and
expenses of the Trustee and the Securities Administrator payable pursuant to
Section 9.05; 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; or

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

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

         (c) The right of the Depositor or its designee to repurchase all the
assets of the Trust Fund as described in 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


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<PAGE>



1% of the Cut-Off Date Balance, or (ii) the Depositor, based upon an Opinion of
Counsel addressed to the Depositor, the Trustee and the Securities
Administrator, has determined that the REMIC status of REMIC I, REMIC II or
REMIC III 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 Depositor may elect to terminate REMIC I, REMIC
II and REMIC III at any time, and upon such election, the Depositor or its
designee, shall repurchase all the assets of the Trust Fund described in
Subsection 10.01(a)(i) above.

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

         (e) If the option of the Depositor to repurchase or cause the
repurchase of all the assets in the Trust Fund as described in Subsection
10.01(a)(i) above, is exercised, the Depositor and/or its designee shall deliver
to the Trustee for deposit in the Distribution Account, by the Business Day
prior to the applicable Distribution Date, an amount equal to the Termination
Purchase Price. Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall distribute to such Certificateholders as
directed by the Securities Administrator in writing an amount determined as
follows: with respect to each Certificate (other than the Interest Only
Certificates and the Class R Certificates), the outstanding Current Principal
Amount, plus with respect to each Certificate (other than the Class R
Certificates), one month's interest thereon at the applicable Pass- Through
Rate; and with respect to the Class R Certificates, the percentage interest
evidenced thereby multiplied by the difference, if any, between the above
described repurchase price and the aggregate amount to be distributed to the
Holders of the Certificates in such Certificate Group (other than the Class R
Certificates). If the proceeds with respect to the Mortgage Loans of a Loan
Group are not sufficient to pay all of the Senior Certificates of the related
Certificate Group in full, any such deficiency shall be allocated first, to the
Subordinate Certificates, in inverse order of their numerical designations and
then to the Senior Certificates of the related Certificate Group on a pro rata
basis. Upon deposit of the Termination Purchase Price and following such final
Distribution Date, the Trustee shall release promptly to the Depositor and/or
its designee 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 the Certificateholders in trust
without interest pending final distributions pursuant to Subsection 10.01(g).
Any other amounts remaining in the Accounts will belong to the Depositor.

         (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 Distribution
Account all distributable amounts remaining in the Master Servicer Collection


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<PAGE>



Account. Upon the presentation and surrender of the Certificates, the Trustee
shall distribute to the remaining Certificateholders, pursuant to the written
direction of the Securities Administrator and in accordance with their
respective interests, all distributable amounts remaining in the Distribution
Account. Upon deposit by the Master Servicer of such distributable amounts, and
following such final Distribution Date, the Trustee shall release promptly to
the Depositor or its designee the Mortgage Files for the remaining Mortgage
Loans, and the Master Servicer Collection Account and the Distribution Account
shall terminate, subject to the Trustee's obligation to hold any amounts payable
to the Certificateholders in trust without interest pending final distributions
pursuant to this Subsection 10.01(f).

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

         Section 10.02 ADDITIONAL TERMINATION REQUIREMENTS. (a) If the option of
the Depositor to repurchase all of the Mortgage Loans under Subsection
10.01(a)(i) above is exercised, the Trust Fund and each REMIC shall be
terminated in accordance with the following additional requirements, unless the
Trustee has been furnished with an Opinion of Counsel addressed to the Trustee
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 any REMIC or (ii) cause
any REMIC to fail to qualify as a REMIC at any time that any Regular
Certificates are outstanding:

                  (i) within 90 days prior to the final Distribution Date, at
the written direction of the Depositor, the Trustee, as agent for the respective
Tax Matters Persons, shall adopt a plan of complete liquidation of each REMIC in
the case of a termination under Subsection 10.01(a)(i), provided to it by the
Depositor, which meets the requirements of a "qualified liquidation" under
Section 860F of the Code and any regulations thereunder;

                  (ii) the Depositor shall notify the Trustee at the
commencement of such 90-day liquidation period and, at or prior to the time of
making of the final payment on the Certificates, the Trustee shall sell or
otherwise dispose of all of the remaining assets of the Trust Fund in accordance
with this Section 10.02; and

                  (iii) at or after the time of adoption of such a plan of
complete liquidation of each REMIC, and at or prior to the final Distribution
Date relating thereto, the Trustee shall sell for cash all of the assets of the
Trust to or at the direction of the Depositor, and each 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
related REMIC upon the written request of the


                                      -116-

<PAGE>



Depositor, and to take such action in connection therewith as may be reasonably
requested by the Depositor and (ii) appoint the Depositor as their
attorney-in-fact, with full power of substitution, for purposes of adopting such
a plan of complete liquidation. The Trustee shall adopt such plan of liquidation
by filing the appropriate statement on the final tax return of each REMIC. Upon
complete liquidation or final distribution of all of the assets of the Trust
Fund, the Trust Fund and each REMIC shall terminate.



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<PAGE>



                                   ARTICLE XI
                            Miscellaneous Provisions

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

         Section 11.02 AMENDMENT. (a) This Agreement may be amended from time to
time by the Company, the Depositor, the Master Servicer, the Securities
Administrator and the Trustee, without notice to or the consent of any of the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions herein or therein that may be defective or inconsistent with any
other provisions herein or therein, to comply with any changes in the Code or to
make any other provisions with respect to matters or questions arising under
this Agreement which shall not be inconsistent with the provisions of this
Agreement; provided, however, that such action shall not, as evidenced by an
Opinion of Independent Counsel, addressed to the Trustee, (i) adversely affect
in any material respect the interests of any Certificateholder or (ii) cause any
REMIC to fail to qualify as a REMIC for federal income tax purposes, as
evidenced by an Opinion of Independent Counsel addressed to the Trustee which
shall be provided to the Trustee other than at the Trustee's expense.

         (b) This Agreement may also be amended from time to time by the
Company, the Master Servicer, the Depositor, the Securities Administrator 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 any REMIC to fail to qualify as a
REMIC for federal income tax purposes, as evidenced by an Opinion of Independent
Counsel addressed to the Trustee 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
this Section 11.02(b), Certificates registered in the name of or held for the
benefit of the Depositor, the Securities Administrator, the Master Servicer, or
the Trustee or any Affiliate thereof shall be entitled to vote their Fractional
Undivided Interests with respect to matters affecting such Certificates.

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

         (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


                                      -118-

<PAGE>



of obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe.

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

         Section 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 Depositor
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
Depositor, the Securities Administrator, the Master Servicer or any successor to
any such parties unless (i) such Certificateholder previously shall have given
to the Trustee a written notice of a continuing default, as herein provided,
(ii) the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs and expenses and liabilities to be
incurred therein or thereby, and (iii) the Trustee, for 60 days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding.

         (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


                                      -119-

<PAGE>



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

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

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

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

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

         (e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Securities Administrator, the Depositor,
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 a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Certificates which have been pledged in good faith to the Trustee,
the Securities


                                      -120-

<PAGE>



Administrator, the Depositor, the Master Servicer or any Affiliate thereof may
be regarded as outstanding if the pledgor establishes to the satisfaction of the
Trustee the pledgor's right to act with respect to such Certificates and that
the pledgor is not an Affiliate of the Trustee, the Securities Administrator,
the Depositor, or the Master Servicer, as the case may be.

         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 (OTHER THAN SECTION 5- 1401 OF THE
GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE
CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER) 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
Depositor, 383 Madison Avenue, New York, New York 10179, Attention: Vice
President-Servicing, telecopier number: (212) 272-5591, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of the Company, 383 Madison Avenue, New York, New York 10179, Attention:
Vice President- Servicing, telecopier number: (212) 272-5591, or to such other
address as may hereafter be furnished to the other parties hereto in writing;
(iv) in the case of the Master Servicer or Securities Administrator, Wells Fargo
Bank Minnesota, National Association, P.O. Box 98, Columbia Maryland 21046 (or,
in the case of overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland
21045) (Attention: Corporate Trust Services - Prime 2004-CL1), facsimile no.:
(410) 715- 2380, or such other address as may hereafter be furnished to the
other parties hereto in writing; or (v) in the case of the Rating Agencies,
Fitch Ratings, One State Street Plaza New York, New York 10007 and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc., 55 Water Street, New
York, New York 10041, or such other address as hereafter may be furnished to the
other parties in writing. Any notice delivered to the Depositor, the Master
Servicer, the Securities Administrator or the Trustee under this Agreement shall
be effective only upon receipt. Any notice required or permitted to be mailed to
a Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such notice.

         Section 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.



                                      -121-

<PAGE>



         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 a
Responsible Officer of the Trustee has actual knowledge:

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

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

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

         4. The repurchase or substitution of Mortgage Loans;

         5. The final payment to Certificateholders; and

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






                                      -122-

<PAGE>



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

                                     STRUCTURED ASSET MORTGAGE
                                     INVESTMENTS II INC., as Depositor


                                     By: /s/ Baron Silverstein
                                         ---------------------------------------
                                     Name:   Baron Silverstein
                                     Title:  Vice President


                                     LASALLE BANK NATIONAL
                                     ASSOCIATION, as Trustee


                                     By: /s/ Christpher Lewis
                                         ---------------------------------------
                                     Name:   Christopher Lewis
                                     Title:  Christopher Lewis


                                     WELLS FARGO BANK MINNESOTA,
                                     NATIONAL ASSOCIATION, as Master
                                     Servicer


                                     By: /s/ Stacey Taylor
                                         ---------------------------------------
                                     Name:   Stacey Taylor
                                     Title:  Assistant Vice President


                                     WELLS FARGO BANK MINNESOTA,
                                     NATIONAL ASSOCIATION, as Securities
                                     Administrator


                                     By: /s/ Stacey Taylor
                                         ---------------------------------------
                                     Name:   Stacey Taylor
                                     Title:  Assistant Vice President




<PAGE>





                                     EMC MORTGAGE CORPORATION


                                     By: /s/ Sherri Lauritsen
                                         ---------------------------------------
                                     Name:   Sherri Lauritsen
                                     Title:  Executive Vice President



Accepted and Agreed as to
Sections 2.01, 2.02, 2.03, 2.04, 3.13 and 9.09(c)
in its capacity as Seller

EMC MORTGAGE CORPORATION


By: /s/ Sherri Lauritsen
    ---------------------------------
Name:   Sherri Lauritsen
Title:  Executive Vice President





<PAGE>



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

         On the 30th day of January, 2004 before me, a notary public in and for
said State, personally appeared Baron Silverstein, known to me to be a(n) Vice
President of Structured Asset Mortgage Investments II Inc., the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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


                                     __________________________________________
                                     Notary Public

[Notarial Seal]




<PAGE>



STATE OF ____________   )
                        ) ss.:
COUNTY OF __________    )

         On the 30th day of January, 2004 before me, a notary public in and for
said State, personally appeared ___________________, known to me to be a Trust
Officer of LaSalle Bank National Association, the entity that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said entity, and acknowledged to me that such entity executed the
within instrument.

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


                                     __________________________________________
                                     Notary Public

[Notarial Seal]



<PAGE>



STATE OF MARYLAND     )
                      ) ss.:
COUNTY OF HOWARD      )

         On the 30th day of January, 2004 before me, a notary public in and for
said State, personally appeared Stacey Taylor, known to me to be an Assistant
Vice President of Wells Fargo Bank Minnesota, National Association, the entity
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said entity, and acknowledged to me that such entity
executed the within instrument.

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


                                     __________________________________________
                                     Notary Public

[Notarial Seal]




<PAGE>



STATE OF MARYLAND     )
                      ) ss.:
COUNTY OF HOWARD      )

         On the 30th day of January, 2004 before me, a notary public in and for
said State, personally appeared Stacey Taylor, known to me to be a(n) Assistant
Vice President of Wells Fargo Bank Minnesota, National Association, the entity
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said entity, and acknowledged to me that such entity
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 TEXAS       )
                     ) ss.:
COUNTY OF DALLAS     )

         On the 30th day of January, 2004 before me, a notary public in and for
said State, personally appeared Sherri Lauritsen, known to me to be Executive
Vice President 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>


STATE OF TEXAS       )
                     ) ss.:
COUNTY OF DALLAS     )

         On the 30th day of January, 2004 before me, a notary public in and for
said State, personally appeared Sherri Lauritsen, known to me to be Executive
Vice President 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]-[_][IO][PO] 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 TRUSTEE OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED WILL BE REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT WILL BE MADE TO
CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.


                                      A-1-1

<PAGE>




<TABLE>
<CAPTION>
<S>                                           <C>
Certificate No.1                              [Variable][Adjustable][Fixed] Pass-Through
                                              Rate

Class [_-[A]-[_][IO][PO] Senior

Date of Pooling and Servicing Agreement       Aggregate Initial [Current Principal][Notional]
and Cut-off Date:                             Amount of this Senior Certificate as of the
February 1, 2004                              Cut-off Date:
                                              $[_____________]

First Distribution Date:                      Initial [Current Principal][Notional] Amount of
February 25, 2004                             this Senior Certificate as of the Cut-off Date:
                                              $[_____________]

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

Final Scheduled Distribution Date:
[February 25, 2034][February 25, 2019]
</TABLE>

                          PRIME MORTGAGE TRUST 2004-CL1
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2004-CL1

        evidencing a fractional undivided interest in the distributions
        allocable to the Class [_-[A]-[_][IO][PO] Certificates with
        respect to a Trust Fund consisting primarily of a pool of fixed
        rate mortgage loans secured by first liens on one-to-four family
        residential properties sold by STRUCTURED ASSET MORTGAGE
        INVESTMENTS II 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 II 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 II Inc., the
Master Servicer or the Trustee or any of their affiliates or any other person.
None of Structured Asset Mortgage Investments II 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") primarily consisting of fixed rate mortgage loans secured by first
liens on one- to four- family residential properties (collectively, the
"Mortgage Loans") sold by


                                   A-1-2

<PAGE>



Structured Asset Mortgage Investments II Inc. ("SAMI II"). The Mortgage Loans
were sold by EMC Mortgage Corporation ("EMC") to SAMI II. Wells Fargo Bank
Minnesota, National Association ("Wells Fargo") will act as master servicer of
the Mortgage Loans (the "Master Servicer", which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement"), among EMC Mortgage Corporation, as seller and
company (the "Seller"), SAMI II, as depositor (the "Depositor"), Wells Fargo
Bank Minnesota, National Association as master servicer and securities
administrator (in such capacity, the "Securities Administrator") and LaSalle
Bank 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][Notional] Amount hereof at a per annum rate equal to
the Pass-Through Rate set forth above and as further described in the Agreement.
The Trustee will distribute on the 25th day of each month, or, if such 25th day
is not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day 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.]

                  [Interest on this Certificate will accrue from and including
the 25th day of the calendar month preceding the month in which a Distribution
Date (as hereinafter defined) occurs (or, with respect to the first accrual
period, the Closing Date) to and including the 24th day of the calendar month in
which that Distribution Date occurs on the Current Principal Amount hereof at a
per annum rate equal to the Pass-Through Rate set forth above and as further
described in the Agreement. The Trustee will distribute on the 25th day of each
month, or, if such 25th day is not a Business Day, the immediately following
Business Day (each, a "Distribution Date"), commencing on the First Distribution
Date specified above, to the Person in whose name this Certificate is registered
at the close of business on the Business Day immediately preceding 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.]

                  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 by wire
transfer. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose and designated in
such notice. The Initial [Current Principal][Notional] Amount of this


                                      A-1-3

<PAGE>



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 twenty-one 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 Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement from time to time by the parties
thereto with the consent of the Holders of Certificates, evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund (or in
certain cases, Holders of Certificates of affected Classes evidencing such
percentage of the Fractional Undivided Interests thereof). Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, 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 Depositor, the Master Servicer, the


                                      A-1-4

<PAGE>



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
Depositor, 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-1-5

<PAGE>



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

Dated: __________, 20__                       LASALLE BANK NATIONAL
                                              ASSOCIATION
                                              Not in its individual capacity but
                                              solely as Trustee


                                              By:_______________________________
                                                       Authorized Signatory


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

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

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

                                              By: ______________________________
                                                       Authorized Signatory



                                      A-1-6

<PAGE>



                                   ASSIGNMENT
                                   ----------

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

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

Dated:                                 _________________________________________
                                          Signature by or on behalf of assignor


                                       _________________________________________
                                                  Signature Guaranteed




                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

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

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




                                      A-1-7

<PAGE>



                                                                     EXHIBIT A-2

                         FORM OF CLASS [B-_] CERTIFICATE

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

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

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

                  [FOR CLASS B-1, CLASS B-2 AND CLASS B-3] [UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, ANY CERTIFICATE ISSUED WILL BE REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT WILL BE MADE TO CEDE & CO. ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

                  [FOR CLASS B-1, CLASS B-2 AND CLASS B-3] [EACH BENEFICIAL
OWNER OF THIS CERTIFICATE OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE
REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS CERTIFICATE OR
INTEREST HEREIN, THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("PLAN"), OR INVESTING WITH
ASSETS OF A PLAN OR (II) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN
RELIANCE ON PROHIBITED TRANSACTION EXEMPTION 90-30, AS AMENDED FROM TIME TO TIME
("EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE
AVAILABILITY OF THE EXEMPTION, INCLUDING THAT THE CERTIFICATE MUST BE RATED, AT
THE TIME OF PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY STANDARD &
POOR'S, FITCH, INC. OR MOODY'S


                                      A-2-1

<PAGE>



INVESTORS SERVICE, INC., AND THE CERTIFICATE IS SO RATED OR (III) (1) IT IS AN
INSURANCE COMPANY, (2) THE SOURCE OF FUNDS USED TO ACQUIRE OR HOLD THE
CERTIFICATE OR INTEREST HEREIN IS AN "INSURANCE COMPANY GENERAL ACCOUNT", AS
SUCH TERM IS DEFINED IN PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60,
AND (3) THE CONDITIONS IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.]

         [FOR CLASS B-4, CLASS B-5 AND CLASS B-6][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.]

         [FOR CLASS B-4, CLASS B-5 AND CLASS B-6] [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, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE CERTIFIES OR
REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND 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


                                      A-2-2

<PAGE>



ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR
UNLESS THE OPINION SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.]






                                      A-2-3

<PAGE>




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

Class [B-_] Subordinate

Date of Pooling and Servicing Agreement     Aggregate Initial Current Principal Amount of
and Cut-off Date: January 1, 2004           this Subordinate Certificate as of the Cut-off
                                            Date: $[_________]

First Distribution Date:                    Initial Current Principal Amount of this
February 25, 2004                           Subordinate Certificate as of the Cut-off Date:
                                            $[_________]

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

Final Scheduled Distribution Date:
February 25, 2034
</TABLE>

                          PRIME MORTGAGE TRUST 2004-CL1
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2004-CL1

        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 fixed rate mortgage loans
        secured by first liens on one-to-four family residential
        properties sold by STRUCTURED ASSET MORTGAGE INVESTMENTS II 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 II 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 II Inc., the
Master Servicer or the Trustee or any of their affiliates or any other person.
None of Structured Asset Mortgage Investments II Inc., the Master Servicer or
any of their affiliates will have any obligation with respect to any certificate
or other obligation secured by or payable from payments on the Certificates.

                  This certifies that [_______] is the registered owner of the
Fractional Undivided Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") primarily consisting of fixed rate mortgage loans secured by first
liens on one- to four- family residential properties (collectively, the
"Mortgage Loans") sold by Structured Asset Mortgage Investments II Inc. ("SAMI
II"). The Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to SAMI
II. Wells Fargo Bank Minnesota, National Association ("Wells Fargo") will act as
master servicer of the Mortgage Loans (the "Master Servicer", which


                                      A-2-4

<PAGE>



term includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement"), among EMC as seller and
company (the "Seller"), SAMI II, as depositor (the "Depositor"), Wells Fargo
Bank Minnesota, National Association as master servicer and securities
administrator (in such capacity, the "Securities Administrator"), and LaSalle
Bank 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 and as further described in the Agreement. The
Trustee will distribute on the 25th day of each month, or, if such 25th day is
not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day 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.

                  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 by wire
transfer. 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.

                  [For Class B-4, Class B-5 and Class B-6][No transfer of this
Class [B-_] Certificate will be made unless such transfer is (i) exempt from the
registration requirements of the Securities act of 1933, as amended, and any
applicable state securities laws or is made in accordance with said Act and laws
and (ii) made in accordance with Section 5.02 of the Agreement. In the event
that such transfer is to be made the Trustee shall register such transfer if,
(i) made to a transferee who has provided the Trustee with evidence as to its
QIB status; or (ii) (A) the transferor has advised the Trustee in writing that
the Certificate is being transferred to an Institutional Accredited Investor and
(B) prior to such transfer the transferee furnishes to the Trustee an Investment
Letter; provided that if based upon an Opinion of Counsel to the effect that (A)
and (B) above are met sufficient to confirm that such transfer is 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.]

                  [For Class B-1, Class B-2 and Class B-3] [Each beneficial
owner of this Certificate or any interest herein shall be deemed to have
represented, by virtue of its acquisition or holding of


                                      A-2-5

<PAGE>



this certificate or interest herein, that either (i) it is not an employee
benefit plan subject to the Employee Retirement Income Security Act of 1974, as
amended or section 4975 of the Internal Revenue Code of 1986, as amended
("Plan"), or investing with assets of a Plan or (ii) it has acquired and is
holding such certificate in reliance on Prohibited Transaction Exemption 90-30,
as amended from time to time ("Exemption"), and that it understands that there
are certain conditions to the availability of the Exemption, including that the
certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by Standard & Poor's, Fitch, Inc. or Moody's Investors Service,
Inc., and the certificate is so rated or (iii) (1) it is an insurance company,
(2) the source of funds used to acquire or hold the certificate or interest
therein is an "insurance company general account", as such term is defined in
Prohibited Transaction Class Exemption ("PTCE") 95-60, and (3) the conditions in
Sections I and III of PTCE 95-60 have been satisfied.]

         [For Class B-4, Class B-5 and Class B-6] [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, or Section 4975 of the
Internal Revenue Code of 1986, as amended, unless the transferee certifies or
represents that the proposed transfer and holding of a Certificate and the
servicing, management and 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 obligations on the
part of the Depositor, the Securities Administrator, the Master Servicer or the
Trustee, which will be deemed represented by an owner of a Book-Entry
Certificate or a Global Certificate or unless the opinion specified in section
5.07 of the Agreement is provided.]

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in twenty-one 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 Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement from time to time by the parties
thereto with the consent of the Holders of Certificates, evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund (or in
certain cases, Holders of Certificates of affected Classes evidencing such
percentage of the Fractional Undivided Interests thereof). Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and


                                      A-2-6

<PAGE>



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


                                      A-2-7

<PAGE>




Dated: _________, 20__                      LASALLE BANK 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.

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

                                            By:_________________________________
                                                     Authorized Signatory



                                      A-2-8

<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-2-9

<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 TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF
COUNSEL ADDRESSED TO THE TRUSTEE, DEPOSITOR, MASTER SERVICER AND SECURITIES
ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT IS SATISFACTORY TO THE TRUSTEE
THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT RESULT IN OR
CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE
LAW AND WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE
DEPOSITOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE TRUSTEE.

                  ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE OBTAINS THE PRIOR WRITTEN CONSENT OF
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC. AND THE SECURITIES ADMINISTRATOR
AND PROVIDES A TRANSFER AFFIDAVIT TO STRUCTURED ASSET MORTGAGE INVESTMENTS II
INC., THE SECURITIES ADMINISTRATOR 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>




<TABLE>
<CAPTION>
<S>                                            <C>
Certificate No.1                               Pass-Through Rate: _____%

Class R-[_]

Date of Pooling and Servicing Agreement        Aggregate Initial Current Principal Amount of
and Cut-off Date: January 1, 2004              this Certificate as of the Cut-off Date:
                                               $___________

First Distribution Date:                       Initial Current Principal Amount of this
February 25, 2004                              Certificate as of the Cut-off Date: $_________

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

Final Scheduled Distribution Date:
February 25, 2034
</TABLE>

                          PRIME MORTGAGE TRUST 2004-CL1
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                 SERIES 2004-CL1

       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 fixed rate mortgage loans
       secured by first liens on one-to-four family residential
       properties sold by STRUCTURED ASSET MORTGAGE INVESTMENTS II 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 II 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 II Inc., the
Master Servicer or the Trustee or any of their affiliates or any other person.
None of Structured Asset Mortgage Investments II 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") primarily consisting of fixed rate
mortgages loans secured by first liens on one- to four- family residential
properties (collectively, the "Mortgage Loans") sold by Structured Asset
Mortgage Investments II Inc. ("SAMI II"). The Mortgage Loans were sold by EMC
Mortgage Corporation ("EMC") to SAMI II. Wells Fargo Bank Minnesota, National
Association ("Wells Fargo") will act as master servicer of the Mortgage Loans
(the "Master Servicer", which term includes any successors thereto under the
Agreement referred


                                      A-3-3

<PAGE>



to below). The Trust Fund was created pursuant to the Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement'), among
EMC Mortgage Corporation as seller and company (the "Seller"), SAMI II, as
depositor(the "Depositor"), Wells Fargo Bank Minnesota, National Association as
master servicer and securities administrator (in such capacity, the "Securities
Administrator"), and LaSalle Bank 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 and as further described in the Agreement The
Trustee will distribute on the 25th day of each month, or, if such 25th day is
not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day 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.

                  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 by wire
transfer. 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 SAMI II, the Trustee and the Securities Administrator 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 Depositor 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 Depositor, which purchaser may be the Depositor, or any affiliate of the
Depositor, on such terms and conditions as the Depositor 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 transferee provides the Trustee with an opinion of
counsel addressed to the Trustee, Master Servicer and the Securities
Administrator and on which they may rely (which shall not be at the expense of
the Trustee, Master Servicer or the Securities Administrator) which is
acceptable to the Trustee, that the purchase of this Certificate will not result
in or constitute a nonexempt prohibited transaction, is permissible under
applicable law and will not give rise to any additional fiduciary obligations on
the part of the Depositor, the Master Servicer or the Trustee.

                  This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in twenty-one 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 Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement from time to time by the parties
thereto with the consent of the Holders of Certificates, evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund (or in
certain cases, Holders of Certificates of affected Classes evidencing such
percentage of the Fractional Undivided Interests thereof). Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, 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 Depositor, 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 Depositor, 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: _________, 20__                      LASALLE BANK 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.

                                            LASALLE BANK NATIONAL ASSOCIATION
                                            Authorized signatory of LaSalle Bank
                                            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 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 Servicer;

(g)      the Servicing Rate;

(h)      the Net Rate;

(i)      the original term;

(j)      the maturity date;

(k)      the stated remaining term to maturity;

(l)      the original principal balance;

(m)      the first payment date;

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

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

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

(q)      paid-through date;

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

(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;

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

(x)      which Mortgage Loans adjust after an initial fixed-rate period of
three, five, seven or ten years;

(y)      The Loan Group; and

(z)      The Prepayment Charge Loans.

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 (k)
and (n) above, the weighted average by principal balance as of the Cut-off Date
of each of the rates described under (e), (f) and (g) above, and the weighted
average remaining term to maturity by unpaid principal balance as of the Cut-off
Date.





                                       B-2

<PAGE>



                                                                       EXHIBIT C

                                   [RESERVED]







                                       C-1

<PAGE>



                                                                       EXHIBIT D

                        REQUEST FOR RELEASE OF DOCUMENTS

To:      LaSalle Bank National Association
         135 South LaSalle Street
         Chicago, IL 60603

RE:      Pooling and Servicing Agreement dated as of
         January 1, 2004, among SAMI II,
         Wells Fargo Bank Minnesota,
         National Association, as Master Servicer
          and Securities Administrator,
         EMC Mortgage Corporation, as Seller
         and company and LaSalle Bank 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

                                FORM OF AFFIDAVIT

                                              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 II Inc., Prime Mortgage Trust, Mortgage Pass-Through Certificates,
Series 2004-CL1 Class R-I, Class R-II, and R-III 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 II 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
______________________.



                                       E-1

<PAGE>



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

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

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

         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]

LaSalle Bank National Association
135 South LaSalle Street
Chicago, IL 60603

Structured Asset Mortgage Investments II Inc.
383 Madison Avenue
New York, New York 10179

     Re:  Structured Asset Mortgage Investments II Inc., Prime Mortgage Trust,
          Series 2004-CL1 Mortgage Pass-Through Certificates (the
          "Certificates"), including the 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, we
confirm that:

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

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

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

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

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


                                      F-1-1

<PAGE>



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

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

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

                     (B) if the Privately Offered Certificate is not registered
                under the Act (as to which we acknowledge you have no
                obligation), the Privately Offered Certificate is sold in a
                transaction that does not require registration under the Act and
                any applicable state securities or "blue sky" laws and, if
                LaSalle Bank 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, or section 4975 of the Internal Revenue
                Code of 1986, as amended, or (ii) are providing a representation
                to the effect that the proposed transfer and holding of a
                Privately Offered Certificate and the servicing, management and
                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,


                                      F-1-2

<PAGE>



                PTE 90-1, PTE 95-60, or PTE 96-23 and (II) will not give rise to
                any additional obligations on the part of the Depositor, the
                Master Servicer, the Securities Administrator or the Trustee or
                (iii) have attached hereto the opinion specified in Section 5.07
                of the Agreement.

         (ix)   We understand that each of the Privately Offered 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, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
                1986, AS AMENDED, UNLESS THE PROPOSED TRANSFER AND HOLDING OF A
                CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE
                TRUST AND ITS ASSETS:


                                      F-1-3

<PAGE>



                (1) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT
                COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION
                EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION
                EXEMPTION ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60 OR PTE
                96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS
                ON THE PART OF THE DEPOSITOR, THE MASTER SERVICER, THE
                SECURITIES ADMINISTRATOR OR THE TRUSTEE, WHICH WILL BE DEEMED
                REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL
                CERTIFICATE OR UNLESS THE OPINION PROVIDED IN SECTION 5.07 OF
                THE AGREEMENT IS PROVIDED."

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

         Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement, dated as of January 1, 2004, among
Structured Asset Mortgage Investments II Inc., Wells Fargo Bank Minnesota,
National Association as master servicer and securities administrator, EMC
Mortgage Corporation, as seller and company and LaSalle Bank 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 G

                           FORM OF CUSTODIAL AGREEMENT

         THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement'), dated as of January 30, 2004, by and among LASALLE BANK
NATIONAL ASSOCIATION, not individually but solely as trustee under the Pooling
and Servicing Agreement defined below (including its successors under the
Pooling and Servicing Agreement defined below, the "Trustee"), STRUCTURED ASSET
MORTGAGE INVESTMENTS II INC., as depositor (together with any successor in
interest, the "Depositor"), WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as
master servicer and securities administrator (together with any successor in
interest or successor under the Pooling and Servicing Agreement referred to
below, the "Master Servicer") and WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as custodian (together with any successor in interest or any
successor appointed hereunder, the "Custodian").


                                WITNESSETH THAT:
                                ----------------

                  WHEREAS, the Depositor, the Master Servicer, the Trustee and
EMC Mortgage Corporation (the "Seller") have entered into a Pooling and
Servicing Agreement, dated as of January 1, 2004, relating to the issuance of
Prime Mortgage Trust 2004-CL1, Mortgage Pass-Through Certificates, Series
2004-CL1 (as in effect on the date of this agreement, the "Original Pooling and
Servicing Agreement," and as amended and supplemented from time to time, the
"Pooling and Servicing Agreement'); and

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

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

                                    ARTICLE I
                                   DEFINITIONS

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



                                       G-1

<PAGE>



                                   ARTICLE II
                          CUSTODY OF MORTGAGE DOCUMENTS

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

                  Section 2.2 RECORDATION OF ASSIGNMENTS. If any Mortgage File
includes one or more assignments of Mortgage to the Trustee in a state which is
specifically excluded from the Opinion of Counsel delivered by the Seller to the
Trustee and the Custodian pursuant to the provisions of Section 2.01 of the
Pooling and Servicing Agreement, each such assignment shall be delivered by the
Custodian to the Depositor for the purpose of recording it in the appropriate
public office for real property records, and the Depositor, at no expense to the
Custodian, shall promptly cause to be recorded in the appropriate public office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.

                  Section 2.3       REVIEW OF MORTGAGE FILES.

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

                  (b) Within 90 days of the Closing Date, the Custodian agrees,
for the benefit of Certificateholders, to review, in accordance with the
provisions of Section 2.02 of the Pooling and Servicing Agreement, each such
document, and shall deliver to the Depositor and the Trustee an Interim
Certification in the form annexed hereto as Exhibit Two to the effect that all
such documents have been executed and received and that such documents relate to
the Mortgage Loans identified on the Mortgage Loan Schedule, except for any
exceptions listed on Schedule A attached to such Interim Certification. The
Custodian shall be under no duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable, or appropriate for the represented purpose or
that they have actually been recorded or that they are other than what they
purport to be on their face.

                  (c) Not later than 180 days after the Closing Date, the
Custodian shall review the Mortgage Files as provided in Section 2.02 of the
Pooling and Servicing Agreement and deliver to the Depositor and the Trustee a
Final Certification in the form annexed hereto as Exhibit Three evidencing the
completeness of the Mortgage Files.

                  (d) In reviewing the Mortgage Files as provided herein and in
the Pooling and Servicing Agreement, the Custodian shall make no representation
as to and shall not be responsible


                                       G-2

<PAGE>



to verify (i) the validity, legality, enforceability, due authorization,
recordability, sufficiency or genuineness of any of the documents included in
any Mortgage File or (ii) the collectibility, insurability, effectiveness or
suitability of any of the documents in any Mortgage File.

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

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

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

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

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



                                       G-3

<PAGE>



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

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

                                   ARTICLE III
                            CONCERNING THE CUSTODIAN

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

                  Section 3.2  RESERVED.

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

                  Section 3.4 MASTER SERVICER TO PAY CUSTODIAN'S FEES AND
EXPENSES. The Master Servicer covenants and agrees to pay to the Custodian from
time to time, and the Custodian shall be entitled to, reasonable compensation
for all services rendered by it in the exercise and performance of any of the
powers and duties hereunder of the Custodian, and the Master Servicer will pay
or reimburse the Custodian upon its request for all reasonable expenses,
disbursements and advances


                                       G-4

<PAGE>



incurred or made by the Custodian in accordance with any of the provisions of
this Agreement (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ),
except any such expense, disbursement or advance as may arise from its
negligence or bad faith or to the extent that such cost or expense is
indemnified by the Depositor pursuant to the Pooling and Servicing Agreement.

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

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

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

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

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

                                   ARTICLE IV
                            MISCELLANEOUS PROVISIONS



                                       G-5

<PAGE>



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

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

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

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

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

                  Section 4.5 SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.



                                       G-6

<PAGE>



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



Address:                                    LASALLE BANK NATIONAL
                                            ASSOCIATION, not individually but
135 South LaSalle Street                    solely as Trustee
Chicago, IL 60603

Attention:                                  By: ________________________________
Telecopy:                                   Name:
Confirmation:                               Title:
Address:                                    STRUCTURED ASSET MORTGAGE
                                            INVESTMENTS II INC.
383 Madison Avenue
New York, New York 10179
                                            By: ________________________________
                                            Name:    Baron Silverstein
                                            Title:   Vice President

Address:                                    WELLS FARGO BANK MINNESOTA,
                                            NATIONAL ASSOCIATION, as Master
9062 Old Annapolis Road                     Servicer
Columbia, Maryland 21045

                                            By: ________________________________
                                            Name:  Stacey Taylor
                                            Title:   Assistant Vice President

Address:                                    WELLS FARGO BANK MINNESOTA,
                                            NATIONAL ASSOCIATION, as Custodian
9062 Old Annapolis Road
Columbia, Maryland 21045                    By: ________________________________
                                            Name:    Stacey Taylor
                                            Title:   Assistant Vice President



                                       G-7

<PAGE>



STATE OF __________________     )
                                )ss.:
COUNTY OF ________________      )

                  On the 30th day of January 2004 before me, a notary public in
and for said State, personally appeared _______________, known to me to be a
________________ of LaSalle Bank National Association, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation and acknowledged to me that
such corporation executed the within instrument.

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

                                            ________________________________
                                                         Notary Public


[SEAL]






<PAGE>



STATE OF MARYLAND              )
                               ) ss.:
COUNTY OF HOWARD               )

                  On the 30th day of January 2004 before me, a notary public in
and for said State, personally appeared Stacey Taylor, known to me to be an
Assistant Vice President of Wells Fargo Bank Minnesota, National Association, a
national banking association that executed the within instrument, and also known
to me to be the person who executed it on behalf of said national banking
association, and acknowledged to me that such national banking association
executed the within instrument.

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

                                             ________________________________
                                                      Notary Public
[SEAL]





<PAGE>



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

                  On the 30th day of January 2004 before me, a notary public in
and for said State, personally appeared Baron Silverstein, known to me to be a
Vice President of Structured Asset Mortgage Investments II Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

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


                                               ________________________________
                                                       Notary Public
[Notarial Seal]







<PAGE>



STATE OF MARYLAND       )
                        )ss.:
 COUNTY OF HOWARD       )


                  On the 30th day of January 2004 before me, a notary public in
and for said State, personally appeared Stacey Taylor, known to me to be an
Assistant Vice President of Wells Fargo Bank Minnesota, National Association,
one of the corporations that executed the within instrument, and also known to
me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.

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


                                            ________________________________
                                                     Notary Public
[Notarial Seal]







<PAGE>



                                   EXHIBIT ONE

                     FORM OF CUSTODIAN INITIAL CERTIFICATION


                                                         January __, 2004



LaSalle Bank National Association               Structured Asset Mortgage
135 South LaSalle Street                        Investments II Inc.
Chicago, IL 60603                               383 Madison Avenue
                                                New York, New York 10179

Attention: Structured Asset Mortgage Investments II Inc.
Prime Mortgage Trust 2004-CL1, Mortgage Pass-Through Certificates,
Series 2004-CL1

            Re:  Custodial Agreement, dated as of January 30, 2004, by
                 and among LaSalle Bank National Association, Structured
                 Asset Mortgage Investments II Inc. and Wells Fargo Bank
                 Minnesota, National Association relating to Prime
                 Mortgage Trust 2004-CL1, Mortgage Pass-Through
                 Certificates, Series 2004-CL1
                 -------------------------------------------------------


Ladies and Gentlemen:

            In accordance with Section 2.3 of the above-captioned Custodial
Agreement, and subject to Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Custodian, hereby certifies that it has received a Mortgage
File (which contains an original Mortgage Note or lost note affidavit) to the
extent required in Section 2.01 of the Pooling and Servicing Agreement with
respect to each Mortgage Loan listed in the Mortgage Loan Schedule, with any
exceptions listed on Schedule A attached hereto.

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

                                            WELLS FARGO BANK MINNESOTA,
                                            NATIONAL ASSOCIATION


                                            By: ____________________________
                                            Name:
                                            Title:





<PAGE>



                                   EXHIBIT TWO

                     FORM OF CUSTODIAN INTERIM CERTIFICATION

                                                     ___________, 20__



LaSalle Bank National Association                    Structured Asset Mortgage
135 South LaSalle Street                             Investments II Inc.
Chicago, IL 60603                                    383 Madison Avenue
                                                     New York, New York 10179

Attention:  Structured Asset Mortgage Investments II Inc.
Prime Mortgage Trust 2004-CL1, Mortgage Pass-Through Certificates,
Series 2004-CL1

            Re:  Custodial Agreement, dated as of January 30, 2004, by
                 and among LaSalle Bank National Association, Structured
                 Asset Mortgage Investments II Inc. and Wells Fargo Bank
                 Minnesota, National Association relating to Prime
                 Mortgage Trust 2004-CL1, Mortgage Pass-Through
                 Certificates, Series 2004-CL1
                 -------------------------------------------------------

Ladies and Gentlemen:

            In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Mortgage File to the extent required pursuant to Section 2.01 of the Pooling
and Servicing Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Mortgage File and the Mortgage
Loan Schedule and has determined that: all required documents have been executed
and received and that such documents related to the Mortgage Loans identified on
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.

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

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION


                                           By: _______________________________
                                           Name: _____________________________
                                           Title: ____________________________





<PAGE>



                                  EXHIBIT THREE

                      FORM OF CUSTODIAN FINAL CERTIFICATION



                                                        _______, 20__



LaSalle Bank National Association                Structured Asset Mortgage
135 South LaSalle Street                         Investments II Inc.
Chicago, IL 60603                                383 Madison Avenue
                                                 New York, New York 10179

Attention: Structured Asset Mortgage Investments II Inc.
Prime Mortgage Trust 2004-CL1, Mortgage Pass-Through Certificates,
Series 2004-CL1

            Re:  Custodial Agreement, dated as of January 30, 2004, by
                 and among LaSalle Bank National Association, Structured
                 Asset Mortgage Investments II Inc. and Wells Fargo Bank
                 Minnesota, National Association relating to Prime
                 Mortgage Trust 2004-CL1, Mortgage Pass-Through
                 Certificates, Series 2004-CL1
                 -------------------------------------------------------

Ladies and Gentlemen:

            In accordance with Section 2.3 of the above-captioned Custodial
Agreement and subject to Section 2.02(b) of the Pooling and Servicing Agreement,
the undersigned, as Custodian, hereby certifies that, subject to any exceptions
listed on Schedule A attached hereto, it has received a Mortgage File with
respect to each Mortgage Loan listed in the Mortgage Loan Schedule containing
(I) with respect to each Mortgage Loan (other than a Cooperative Loan):

            (i) The original Mortgage Note, endorsed without recourse to the
      order of the Trustee and showing an unbroken chain of endorsements from
      the originator thereof to the Person endorsing it to the Trustee, or a
      lost note affidavit together with a copy of the related Mortgage Note;

            (ii) The original Mortgage and, if the related Mortgage Loan is a
      MOM Loan, noting the presence of the MIN and language indicating that such
      Mortgage Loan is a MOM Loan, which shall have been recorded (or if the
      original is not available, a copy), with evidence of such recording
      indicated thereon (or if the original is not available, a copy), with
      evidence of such recording indicated thereon (or if 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


                                      G-14

<PAGE>



      returned to the Seller in time to permit their recording as specified in
      Section 2.01(b) of the Pooling and Servicing Agreement, shall be in
      recordable form);

          (iii) unless the Mortgage Loan is a MOM Loan, 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 "LaSalle
     Bank National Association, as Trustee", with evidence of recording with
     respect to each Mortgage Loan in the name of the Trustee thereon (or if (A)
     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 in Section 2.01(b) of the Pooling and Servicing
     Agreement, a true copy thereof with a certification by the Seller, on the
     face of such copy, substantially as follows: "Certified to be a true and
     correct copy of the original, which has been transmitted for recording" or
     (B) the related Mortgaged Property is located in a state other than
     Maryland and an Opinion of Counsel has been provided as set forth in
     Section 2.01(b), shall be in recordable form);

          (iv) all intervening assignments of the Security Instrument, if
     applicable and only to the extent available to the Depositor 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 (II) with respect to each Cooperative Loan so assigned:

            (i) The original Mortgage Note, endorsed without recourse to the
      order of the Trustee and showing an unbroken chain of endorsements from
      the originator thereof to the Person endorsing it to the Trustee, or lost
      note affidavit, together with a copy of the related Mortgage Note;

            (ii) A counterpart of the Cooperative Lease and the Assignment of
      Proprietary Lease to the originator of the Cooperative Loan with
      intervening assignments showing an unbroken chain of title from such
      originator to the Trustee;

            (iii) The related Cooperative Stock Certificate, representing the
      related Cooperative Stock pledged with respect to such Cooperative Loan,
      together with an undated stock power (or other similar instrument)
      executed in blank;



                                      G-15

<PAGE>



            (iv) The original recognition agreement by the Cooperative of the
      interests of the mortgagee with respect to the related Cooperative Loan
      and any transfer documents related to the recognition agreement;

            (v) The Security Agreement;

            (vi) Copies of the original UCC-1 financing statement, and any
      continuation statements, filed by the originator of such Cooperative Loan
      as secured party, each with evidence of recording thereof, evidencing the
      interest of the originator under the Security Agreement and the Assignment
      of Proprietary Lease;

            (vii) Copies of the filed UCC-3 assignments of the security interest
      referenced in clause (vi) above showing an unbroken chain of title from
      the originator to the Trustee, each with evidence of recording thereof,
      evidencing the interest of the originator under the Security Agreement and
      the Assignment of Proprietary Lease;

            (viii) An executed assignment of the interest of the originator in
      the Security Agreement and Assignment of Proprietary Lease, showing an
      unbroken chain of title from the originator to the Trustee; and

            (ix) The original of each modification, assumption agreement or
      preferred loan agreement, if any, relating to such Cooperative Loan.

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

                                                WELLS FARGO BANK
                                                MINNESOTA, NATIONAL
                                                ASSOCIATION



                                                By: ___________________________
                                                Name:__________________________
                                                Title:_________________________




                                      G-16

<PAGE>



                                                                     EXHIBIT H-1

                               SERVICING AGREEMENT

                                    ALLIANCE

                             [provided upon request]















                                       H-1

<PAGE>



                                                                     EXHIBIT H-2

                               SERVICING AGREEMENT

                                 BANK OF AMERICA

                             [provided upon request]














                                       H-2

<PAGE>



                                                                     EXHIBIT H-3

                               SERVICING AGREEMENT

                                BANK OF OKLAHOMA

                             [provided upon request]














                                       H-3

<PAGE>



                                                                     EXHIBIT H-4

                               SERVICING AGREEMENT

                                    BANK ONE

                             [provided upon request]










                                       H-4

<PAGE>



                                                                     EXHIBIT H-5

                               SERVICING AGREEMENT

                                     CENDANT

                             [provided upon request]












                                       H-5

<PAGE>



                                                                     EXHIBIT H-6

                               SERVICING AGREEMENT

                                CENTRAL NATIONAL

                             [provided upon request]










                                       H-6

<PAGE>



                                                                     EXHIBIT H-7

                               SERVICING AGREEMENT

                                     CHARTER

                             [provided upon request]








                                       H-7

<PAGE>



                                                                     EXHIBIT H-8

                               SERVICING AGREEMENT

                                      CHASE

                             [provided upon request]














                                       H-8

<PAGE>


                                                                     EXHIBIT H-9

                               SERVICING AGREEMENT

                                   CHEVY CHASE

                             [provided upon request]













                                       H-9

<PAGE>



                                                                    EXHIBIT H-10

                               SERVICING AGREEMENT

                                  CITIMORTGAGE

                             [provided upon request]














                                      H-10

<PAGE>



                                                                    EXHIBIT H-11

                               SERVICING AGREEMENT

                                COLONIAL SAVINGS

                             [provided upon request]












                                      H-11

<PAGE>



                                                                    EXHIBIT H-12

                               SERVICING AGREEMENT

                                    COLUMBIA

                             [provided upon request]












                                      H-12

<PAGE>



                                                                    EXHIBIT H-13

                               SERVICING AGREEMENT

                                   COUNTRYWIDE

                             [provided upon request]
















                                      H-13

<PAGE>



                                                                    EXHIBIT H-14

                               SERVICING AGREEMENT

                                      CUNA

                             [provided upon request]












                                      H-14

<PAGE>



                                                                    EXHIBIT H-15

                               SERVICING AGREEMENT

                                     DOWNEY

                             [provided upon request]











                                      H-15

<PAGE>



                                                                    EXHIBIT H-16

                               SERVICING AGREEMENT

                                   FIFTH THIRD

                             [provided upon request]









                                      H-16

<PAGE>



                                                                    EXHIBIT H-17

                               SERVICING AGREEMENT

                                 FIRST TENNESSEE

                             [provided upon request]



                                      H-17

<PAGE>



                                                                    EXHIBIT H-18

                               SERVICING AGREEMENT

                                      GMAC

                             [provided upon request]



                                      H-18

<PAGE>



                                                                    EXHIBIT H-19

                               SERVICING AGREEMENT

                                    HIBERNIA

                             [provided upon request]










                                      H-19

<PAGE>



                                                                    EXHIBIT H-20

                               SERVICING AGREEMENT

                                      HSBC

                             [provided upon request]









                                      H-20

<PAGE>



                                                                    EXHIBIT H-21

                               SERVICING AGREEMENT

                                   HUNTINGTON

                             [provided upon request]







                                      H-21

<PAGE>



                                                                    EXHIBIT H-22

                               SERVICING AGREEMENT

                                 MORGAN STANLEY

                             [provided upon request]









                                      H-22

<PAGE>



                                                                    EXHIBIT H-23

                               SERVICING AGREEMENT

                                    NAT CITY

                             [provided upon request]







                                      H-23

<PAGE>



                                                                    EXHIBIT H-24

                               SERVICING AGREEMENT

                                    PLYMOUTH

                             [provided upon request]







                                      H-24

<PAGE>



                                                                    EXHIBIT H-25

                               SERVICING AGREEMENT

                                    SUNTRUST

                             [provided upon request]








                                      H-25

<PAGE>



                                                                    EXHIBIT H-26

                               SERVICING AGREEMENT

                                    U.S. BANK

                             [provided upon request]







                                      H-26

<PAGE>



                                                                    EXHIBIT H-27

                               SERVICING AGREEMENT

                                      WAMU

                             [provided upon request]







                                      H-27

<PAGE>



                                                                    EXHIBIT H-28

                               SERVICING AGREEMENT

                                      WFHM

                             [provided upon request]








                                      H-28

<PAGE>



                                                                       EXHIBIT I

                              ASSIGNMENT AGREEMENTS

                             [provided upon request]








                                       I-1

<PAGE>



                                                                       EXHIBIT J

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                  MORTGAGE LOAN PURCHASE AGREEMENT, dated as of January 30,
2004, as amended and supplemented by any and all amendments hereto
(collectively, the "AGREEMENT"), by and between EMC MORTGAGE CORPORATION, a
Delaware corporation (the "MORTGAGE LOAN SELLER"), and STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., a Delaware corporation (the "PURCHASER").

                  Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, first lien mortgage loans secured primarily by
one- to four-family residential properties, an interest in shares issued by a
cooperative apartment corporation and the related proprietary lease and
individual condominium units (collectively, the "MORTGAGE LOANS") as described
herein. The Purchaser intends to deposit the Mortgage Loans into a trust fund
(the "TRUST FUND") and create Prime Mortgage Trust 2004-CL1, Mortgage
Pass-Through Certificates, Series 2004-CL1 (the "CERTIFICATES"), under a pooling
and servicing agreement, to be dated as of January 1, 2004 (the "POOLING AND
SERVICING AGREEMENT"), among the Purchaser, as depositor, Wells Fargo Bank
Minnesota, National Association, as master servicer and securities
administrator, LaSalle Bank National Association, as trustee (the "TRUSTEE") and
EMC Mortgage Corporation, as seller and company.

                  The Purchaser has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (Number
333-106323) relating to its Mortgage Pass-Through Certificates and the offering
of certain series thereof (including certain classes of the Certificates) from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder
(the "SECURITIES ACT"). Such registration statement, when it became effective
under the Securities Act, and the prospectus relating to the public offering of
certain classes of the Certificates by the Purchaser (the "PUBLIC OFFERING"), as
each may be amended or supplemented from time to time pursuant to the Securities
Act or otherwise, are referred to herein as the "REGISTRATION STATEMENT" and the
"PROSPECTUS," respectively. The "PROSPECTUS SUPPLEMENT" shall mean that
supplement, dated January 27, 2004 to the Prospectus, dated September 29, 2003,
relating to certain classes of the Certificates. With respect to the Public
Offering of certain classes of the Certificates, the Purchaser and Bear, Stearns
& Co. Inc. ("BEAR STEARNS") have entered into a terms agreement dated as of
January 27, 2004 to an underwriting agreement dated July 29, 2003, between the
Purchaser and Bear Stearns (collectively, the "UNDERWRITING AGREEMENT").




                                       J-1

<PAGE>



                  Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:

                  SECTION 1. DEFINITIONS. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in the Pooling and Servicing Agreement. The following other terms are
defined as follows:

                  ACQUISITION PRICE: Cash in an amount equal to $______ (plus
$______ in accrued interest)/1.

                  BEAR STEARNS: Bear, Stearns & Co. Inc.

                  CLOSING DATE: January 30, 2004.

                  CUT-OFF DATE: January 1, 2004.

                  CUT-OFF DATE BALANCE: $1,321,286,472.

                  DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a Substitute Mortgage Loan.

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

                  FITCH: Fitch, Inc. or its successor in interest.

                  MASTER SERVICER: Wells Fargo Bank Minnesota, National
Association.

                  MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.

                  MERS(R) SYSTEM: The system of recording transfers of Mortgages
electronically maintained by MERS.

                  MORTGAGE: The mortgage or deed of trust creating a first lien
on an interest in real property securing a Mortgage Note.

                  MORTGAGE FILE: The items referred to in EXHIBIT 1 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such documents pursuant to this Agreement.

--------------------------
         1/Please contact Bear, Stearns & Co. Inc. for Purchase Price.


                                       J-2

<PAGE>



                  MORTGAGE INTEREST RATE: The annual rate of interest borne by a
Mortgage Note as stated therein.

                  MORTGAGOR: The obligor(s) on a Mortgage Note.

                  NET RATE: For each Mortgage Loan, the Mortgage Interest Rate
for such Mortgage Loan less the Servicing Fee Rate and the Lender-Paid PMI Rate
(if applicable).

                  OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to
the Trustee.

                  PERSON: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

                  PURCHASE PRICE: With respect to any Mortgage Loan (or any
property acquired with respect thereto) required to be repurchased by the
Mortgage Loan Seller pursuant to this Agreement or Article II of the Pooling and
Servicing Agreement, an amount equal to the sum of (i)(a) 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 (b)
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, plus (c) any unreimbursed Monthly Advances and servicing advances
payable to the Servicer of the Mortgage Loan and (ii) any costs and damages (if
any) incurred by the Trust in connection with any violation of such Mortgage
Loan of any predatory lending laws.

                  RATING AGENCIES: Standard & Poor's and Fitch, each a "RATING
AGENCY."

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

                  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.

                  SERVICING AGREEMENTS: Shall have the meaning assigned to such
term in the Pooling and Servicing Agreement.

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

                  SUBSTITUTE MORTGAGE LOAN: A mortgage loan substituted for a
Deleted Mortgage Loan which must meet on the date of such substitution the
requirements stated herein and in the Pooling and Servicing Agreement; upon such
substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.



                                       J-3

<PAGE>



                  VALUE: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i) the
value of such property set forth in an appraisal accepted by the applicable
originator of the Mortgage Loan or (ii) the sales price of such property at the
time of origination.

                  SECTION 2. PURCHASE AND SALE OF THE MORTGAGE LOANS AND RELATED
RIGHTS. (a) Upon satisfaction of the conditions set forth in Section 10 hereof,
the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate outstanding principal balance as of the
Cut-off Date equal to the Cut-off Date Balance.

                  (b) The closing for the purchase and sale of the Mortgage
Loans and the closing for the issuance of the Certificates will take place on
the Closing Date at the office of the Purchaser's counsel in New York, New York
or such other place as the parties shall agree.

                  (c) Upon the satisfaction of the conditions set forth in
Section 10 hereof, on the Closing Date, the Purchaser shall pay to the Mortgage
Loan Seller the Acquisition Price for the Mortgage Loans in immediately
available funds by wire transfer to such account or accounts as shall be
designated by the Mortgage Loan Seller.

                  (d) In addition to the foregoing, on the Closing Date the
Mortgage Loan Seller assigns to the Purchaser all of its right, title and
interest in the Servicing Agreements (other than its right to enforce the
representations and warranties set forth therein).

                  SECTION 3. MORTGAGE LOAN SCHEDULES. The Mortgage Loan Seller
agrees to provide to the Purchaser as of the date hereof a preliminary listing
of the Mortgage Loans (the "PRELIMINARY MORTGAGE LOAN SCHEDULE") setting forth
the information listed on EXHIBIT 2 to this Agreement with respect to each of
the Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "FINAL
MORTGAGE LOAN SCHEDULE") setting forth the information listed on EXHIBIT 2 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "AMENDMENT"). If there are no changes to the
Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall
be the Final Mortgage Loan Schedule for all purposes hereof.

                  SECTION 4. MORTGAGE LOAN TRANSFER.

                  (a) The Purchaser will be entitled to all scheduled payments
of principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereon, other than
scheduled principal and interest due on or before the Cut-off Date but received
after the Cut-off Date. The Mortgage Loan Seller will be entitled to all
scheduled payments of principal and interest on the Mortgage Loans due on or
before the Cut-off Date (including payments collected after the Cut-off Date)
and all payments thereon, other than scheduled principal and interest due after
the Cut-off Date but received on or before the Cut-off Date. Such


                                       J-4

<PAGE>



principal amounts and any interest thereon belonging to the Mortgage Loan Seller
as described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the Final
Mortgage Loan Schedule.

                  (b) Pursuant to various conveyancing documents to be executed
on the Closing Date and pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign on the Closing Date all of its right, title and interest
in and to the Mortgage Loans to the Trustee for the benefit of the
Certificateholders. In connection with the transfer and assignment of the
Mortgage Loans, the Mortgage Loan Seller has delivered or will deliver or cause
to be delivered to the Trustee by the Closing Date or such later date as is
agreed to by the Purchaser and the Mortgage Loan Seller (each of the Closing
Date and such later date is referred to as a "MORTGAGE FILE DELIVERY DATE"), the
items of each Mortgage File, PROVIDED, HOWEVER, that in lieu of the foregoing,
the Mortgage Loan Seller may deliver the following documents, under the
circumstances set forth below: (w) 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
Mortgage Loan Seller in time to permit their delivery as specified above, the
Mortgage Loan Seller may deliver a true copy thereof with a certification by the
Mortgage Loan Seller, on the face of such copy, substantially as follows:
"Certified to be a true and correct copy of the original, which has been
transmitted for recording"; (x) in lieu of the Security Instrument, assignments
to the Trustee or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents (as evidenced by a
certification from the Mortgage Loan Seller to such effect) the Mortgage Loan
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; (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each identified in the list delivered by
the Purchaser to the Trustee on the Closing Date and attached hereto as Exhibit
5, the Mortgage Loan Seller may deliver lost note affidavits and indemnities of
the Mortgage Loan Seller; and (z) the Mortgage Loan Seller shall not be required
to deliver intervening assignments or Mortgage Note endorsements between the
related Underlying Seller and the Mortgage Loan Seller, between the Mortgage
Loan Seller and the Depositor, and between the Depositor and the Trustee; and
provided further, however, that in the case of Mortgage Loans which have been
prepaid in full after the Cut-off Date and prior to the Closing Date, the
Mortgage Loan Seller, in lieu of delivering the above documents, may deliver to
the Trustee a certification by the Mortgage Loan Seller or the Master Servicer
to such effect and shall deposit all amounts paid in respect of such Mortgage
Loans in the Master Servicer Collection Account on the Closing Date. The
Mortgage Loan Seller shall deliver such original documents (including any
original documents as to which certified copies had previously been delivered)
or such certified copies to the Trustee promptly after they are received. The
Mortgage Loan Seller shall cause the Mortgage and intervening assignments, if
any, and the assignment of the Security Instrument to be recorded not later than
180 days after the Closing Date, unless such assignment is not required to be
recorded under the terms set forth in Section 6(a) hereof.

                  (c) In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Mortgage Loan Seller further agrees that
it will cause, at the Mortgage Loan Seller's own expense, within 30 days after
the Closing Date, the MERS(R) System to indicate that such Mortgage Loans have
been assigned by the Mortgage Loan Seller to the Purchaser and by the


                                       J-5

<PAGE>



Purchaser to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Mortgage Loan Seller further agrees
that it will not, and will not permit any Servicer or the Master Servicer to,
and the Master Servicer agrees that it will not, alter the codes referenced in
this paragraph with respect to any Mortgage Loan during the term of the Pooling
and Servicing Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of the Pooling and Servicing Agreement.

                  (d) The Mortgage Loan Seller and the Purchaser acknowledge
hereunder that all of the Mortgage Loans and the related servicing will
ultimately be assigned to LaSalle Bank National Association, as Trustee for the
Certificateholders, on the date hereof.

                  SECTION 5. EXAMINATION OF MORTGAGE FILES.

                  (a) On or before the Mortgage File Delivery Date, the Mortgage
Loan Seller will have made the Mortgage Files available to the Purchaser or its
agent for examination which may be at the offices of the Trustee or the Mortgage
Loan Seller and/or the Mortgage Loan Seller's custodian. The fact that the
Purchaser or its agent has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's
rights to demand cure, repurchase, substitution or other relief as provided in
this Agreement. In furtherance of the foregoing, the Mortgage Loan Seller shall
make the Mortgage Files available to the Purchaser or its agent from time to
time so as to permit the Purchaser to confirm the Mortgage Loan Seller's
compliance with the delivery and recordation requirements of this Agreement and
the Pooling and Servicing Agreement. In addition, upon request of the Purchaser,
the Mortgage Loan Seller agrees to provide to the Purchaser, Bear Stearns and to
any investors or prospective investors in the Certificates information regarding
the Mortgage Loans and their servicing, to make the Mortgage Files available to
the Purchaser, Bear Stearns and to such investors or prospective investors
(which may be at the offices of the Mortgage Loan Seller and/or the Mortgage
Loan Seller's custodian) and to make available personnel knowledgeable about the
Mortgage Loans for discussions with the Purchaser, Bear Stearns and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear Stearns and such
investors or potential investors to conduct such due diligence as any such party
reasonably believes is appropriate.

                  (b) Pursuant to the Pooling and Servicing Agreement, on the
Closing Date the Custodian, on behalf of the Trustee, for the benefit of the
Certificateholders, will acknowledge receipt of each Mortgage Loan, by delivery
to the Mortgage Loan Seller, the Purchaser and the Trustee of an initial
certification in the form attached as Exhibit One to the Custodial Agreement.

                  (c) Pursuant to the Pooling and Servicing Agreement, within 90
days of the Closing Date (or, with respect to any Substitute Mortgage Loan,
within five Business Days after the receipt by the Trustee or Custodian
thereof), the Trustee will review or shall cause the Custodian to review items
of the Mortgage Files as set forth on EXHIBIT 1 and will deliver to the Mortgage
Loan Seller, the Purchaser and the Trustee an interim certification
substantially in the form of Exhibit Two to the Custodial Agreement. If the
Trustee or Custodian, as its agent, finds any document listed on


                                       J-6

<PAGE>



EXHIBIT 1 not to have been executed or 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 the Final Mortgage Loan Schedule or to
appear defective on its face (a "MATERIAL DEFECT"), the Trustee or the
Custodian, as its agent, shall promptly notify the Mortgage Loan Seller of such
Material Defect. The Mortgage Loan Seller shall correct or cure any such
Material Defect within 90 days from the date of notice from the Trustee or the
Custodian, as its agent, of the Material Defect and if the Mortgage Loan Seller
fails to correct or cure such Material Defect within such period and such defect
materially and adversely affects the interests of the Certificateholders in the
related Mortgage Loan, the Mortgage Loan Seller will, in accordance with the
terms of the Pooling and Servicing Agreement, within 90 days of the date of
notice, provide the Trustee with a Substitute Mortgage Loan (if within two years
of the Closing Date) or purchase the related Mortgage Loan at the applicable
Purchase 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, repurchase or substitution must occur within 90 days from
the date such breach was discovered; PROVIDED, HOWEVER, that if such defect
relates solely to the inability of the Mortgage Loan Seller to deliver the
original Security Instrument or intervening assignments thereof, or a certified
copy because the originals of such documents, or a certified copy, have not been
returned by the applicable jurisdiction, the Mortgage Loan Seller shall not be
required to purchase such Mortgage Loan if the Mortgage Loan Seller delivers
such original documents or certified copy promptly upon receipt, but in no event
later than 360 days after the Closing Date. The foregoing repurchase obligation
shall not apply in the event that the Mortgage Loan Seller cannot deliver such
original or copy of any document submitted for recording to the appropriate
recording office in the applicable jurisdiction because such document has not
been returned by such office; provided that the Mortgage Loan Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or the Custodian, as its
agent, shall be effected by the Mortgage Loan Seller within thirty days of its
receipt of the original recorded document. Anything in this Section 5 to the
contrary notwithstanding, a Material Defect will be deemed not to materially and
adversely affect the interest of the Certificateholders in the related Mortgage
Loans unless such defect materially interferes with the applicable Servicer's or
the Master Servicer's ability to foreclose on the related Mortgage Property.

                  (d) Pursuant to the Pooling and Servicing Agreement, within
180 days of the Closing Date (or, with respect to any Substitute Mortgage Loan,
within five Business Days after the receipt by the Trustee or Custodian thereof)
the Trustee will review or cause the Custodian to review items of the Mortgage
Files as set forth on EXHIBIT 1 and will deliver to the Mortgage Loan Seller,
the Purchaser and the Trustee a final certification substantially in the form of
Exhibit Three to the Custodial Agreement. If the Trustee or Custodian, as its
agent, finds a Material Defect, the Trustee or the Custodian, as its agent,
shall promptly notify the Mortgage Loan Seller of such Material Defect. The
Mortgage Loan Seller shall correct or cure any such Material Defect within 90
days from the date of notice from the Trustee or the Custodian, as its agent, of
the Material Defect and if the Mortgage Loan Seller fails to correct or cure
such Material Defect within such period and such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
the Mortgage Loan Seller will, in accordance with the terms of the Pooling and
Servicing Agreement, within 90 days of the date of notice, provide the Trustee
with a Substitute Mortgage Loan (if within two years of the Closing Date) or
purchase the related Mortgage Loan at the


                                       J-7

<PAGE>



applicable Purchase 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, repurchase or substitution must occur
within 90 days from the date such breach was discovered; PROVIDED, HOWEVER, that
if such defect relates solely to the inability of the Mortgage Loan Seller to
deliver the original Security Instrument or intervening assignments thereof, or
a certified copy because the originals of such documents, or a certified copy,
have not been returned by the applicable jurisdiction, the Mortgage Loan Seller
shall not be required to purchase such Mortgage Loan if the Mortgage Loan Seller
delivers such original documents or certified copy promptly upon receipt, but in
no event later than 360 days after the Closing Date. The foregoing repurchase
obligation shall not apply in the event that the Mortgage Loan Seller cannot
deliver such original or copy of any document submitted for recording to the
appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Mortgage Loan
Seller shall instead deliver a recording receipt of such recording office or, if
such receipt is not available, a certificate confirming that such documents have
been accepted for recording, and delivery to the Trustee or the Custodian, as
its agent, shall be effected by the Mortgage Loan Seller within thirty days of
its receipt of the original recorded document.

                  (e) At the time of any substitution, the Mortgage Loan Seller
shall deliver or cause to be delivered the Substitute Mortgage Loan, the related
Mortgage File and any other documents and payments required to be delivered in
connection with a substitution pursuant to the Pooling and Servicing Agreement.
At the time of any purchase or substitution, the Trustee in accordance with the
terms of the Pooling and Servicing Agreement shall (i) assign to the Mortgage
Loan Seller and cause the Custodian to release the documents (including, but not
limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File)
in the possession of the Custodian relating to the Deleted Mortgage Loan and
(ii) execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be necessary to vest in the Mortgage Loan Seller
title to such Deleted Mortgage Loan.

                  SECTION 6. RECORDATION OF ASSIGNMENTS OF MORTGAGE.

                  (a) The Mortgage Loan Seller shall cause each assignment of
the Security Instrument from the Mortgage Loan Seller to the Trustee to be
recorded not later than 180 days after the Closing Date, unless (a) such
recordation is not required by the Rating Agencies or an Opinion of Counsel has
been provided to the Trustee (with a copy to the Custodian) which states that
the recordation of such assignments is not necessary to protect the interests of
the Certificateholders in the related Mortgage Loans or (b) MERS is identified
on the Mortgage or a properly recorded assignment of the Mortgage, as the
Mortgagee of record solely as nominee for the Mortgage Loan Seller and its
successors and assigns; PROVIDED, HOWEVER, notwithstanding the foregoing, each
assignment shall be submitted for recording by the Mortgage Loan Seller in the
manner described above, at no expense to the Trust or 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 a Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgage Loan Seller and (iv) the
occurrence of a servicing transfer as described in Section 8.02 of the Pooling
and Servicing Agreement.



                                       J-8

<PAGE>



                  While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Trustee a certified copy of such Mortgage or assignment. All customary recording
fees and reasonable expenses relating to the recordation of the assignments of
mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be
borne by the Mortgage Loan Seller.

                  (b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser,
as contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Mortgage Loan Seller to the Purchaser to secure a debt or
other obligation of the Mortgage Loan Seller. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held by a
court to continue to be property of the Mortgage Loan Seller, then (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the applicable Uniform Commercial Code; (b) the transfer of
the Mortgage Loans provided for herein shall be deemed to be a grant by the
Mortgage Loan Seller to the Purchaser of a security interest in all of the
Mortgage Loan Seller's right, title and interest in and to the Mortgage Loans
and all amounts payable to the holders of the Mortgage Loans in accordance with
the terms thereof and all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, instruments, securities or other property, to the
extent the Purchaser would otherwise be entitled to own such Mortgage Loans and
proceeds pursuant to Section 4 hereof, including all amounts, other than
investment earnings, from time to time held or invested in any accounts created
pursuant to the Pooling and Servicing Agreement, whether in the form of cash,
instruments, securities or other property; (c) the possession by the Purchaser
or the Trustee of Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-313 (or comparable provision) of the applicable
Uniform Commercial Code; and (d) notifications to persons holding such property,
and acknowledgments, receipts or confirmations from persons holding such
property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Purchaser pursuant to any
provision hereof or pursuant to the Pooling and Servicing Agreement shall also
be deemed to be an assignment of any security interest created hereby. The
Mortgage Loan Seller and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be reasonably necessary to ensure that, if
this Agreement were deemed to create a security interest in the Mortgage Loans,
such security interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of the Pooling and Servicing Agreement.

                  SECTION 7. REPRESENTATIONS AND WARRANTIES OF MORTGAGE LOAN
SELLER CONCERNING THE MORTGAGE LOANS. The Mortgage Loan Seller hereby represents
and warrants to the Purchaser as of the Closing Date or such other date as may
be specified below with respect to each Mortgage Loan being sold by it:

                  (i)  (i)   the information set forth in the Mortgage Loan
         Schedule hereto is true and correct in all material respects and the
         information provided to the Rating Agencies,


                                       J-9

<PAGE>



         including the Mortgage Loan level detail, is true and correct according
         to the Rating Agency requirements;

                  (ii) immediately prior to the transfer to the Purchaser, the
         Mortgage Loan Seller was the sole owner of beneficial title and holder
         of each Mortgage and Mortgage Note relating to the Mortgage Loans and
         is conveying the same free and clear of any and all liens, claims,
         encumbrances, participation interests, equities, pledges, charges or
         security interests of any nature and the Mortgage Loan Seller has full
         right and authority to sell or assign the same pursuant to this
         Agreement;

                  (iii) Each Mortgage Loan at the time it was made complied in
         all material respects with all applicable laws and regulations,
         including, without limitation, usury, equal credit opportunity,
         disclosure and recording laws and all predatory lending laws; and each
         Mortgage Loan has been serviced in all material respects in accordance
         with all applicable laws and regulations, including, without
         limitation, usury, equal credit opportunity, disclosure and recording
         laws and all predatory lending laws and the terms of the related
         Mortgage Note, the Mortgage and other loan documents;

                  (iv) there is no monetary default existing under any Mortgage
         or the related Mortgage Note and there is no material event which, with
         the passage of time or with notice and the expiration of any grace or
         cure period, would constitute a default, breach or event of
         acceleration; and neither the Mortgage Loan Seller, any of its
         affiliates nor any servicer of any related Mortgage Loan has taken any
         action to waive any default, breach or event of acceleration; no
         foreclosure action is threatened or has been commenced with respect to
         the Mortgage Loan;

                  (v) the terms of the Mortgage Note and the Mortgage have not
         been impaired, waived, altered or modified in any respect, except by
         written instruments, (i) if required by law in the jurisdiction where
         the Mortgaged Property is located, or (ii) to protect the interests of
         the Trustee on behalf of the Certificateholders;

                  (vi) no selection procedure reasonably believed by the
         Mortgage Loan Seller to be adverse to the interests of the
         Certificateholders was utilized in selecting the Mortgage Loans;

                  (vii) each Mortgage is a valid and enforceable first lien on
         the property securing the related Mortgage Note and each Mortgaged
         Property is owned by the Mortgagor in fee simple (except with respect
         to common areas in the case of condominiums, PUDs and DE MINIMIS PUDs)
         or by leasehold for a term longer than the term of the related
         Mortgage, subject only to (i) the lien of current real property taxes
         and assessments, (ii) covenants, conditions and restrictions, rights of
         way, easements and other matters of public record as of the date of
         recording of such Mortgage, such exceptions being acceptable to
         mortgage lending institutions generally or specifically reflected in
         the appraisal obtained in connection with the origination of the
         related Mortgage Loan or referred to in the lender's title insurance
         policy delivered to the originator of the related Mortgage Loan and
         (iii) other matters to


                                      J-10

<PAGE>



         which like properties are commonly subject which do not materially
         interfere with the benefits of the security intended to be provided by
         such Mortgage;

                  (viii) there is no mechanics' lien or claim for work, labor or
         material affecting the premises subject to any Mortgage which is or may
         be a lien prior to, or equal with, the lien of such Mortgage except
         those which are insured against by the title insurance policy referred
         to in (xiiii) below;

                  (ix) as of the Cut-off Date, to the best of the Mortgage Loan
         Seller's knowledge, there was no delinquent tax or assessment lien
         against the property subject to any Mortgage, except where such lien
         was being contested in good faith and a stay had been granted against
         levying on the property;

                  (x) there is no valid offset, defense or counterclaim to any
         Mortgage Note or Mortgage, including the obligation of the Mortgagor to
         pay the unpaid principal and interest on such Mortgage Note;

                  (xi) to the best of the Mortgage Loan Seller's knowledge,
         except to the extent insurance is in place which will cover such
         damage, the physical property subject to any Mortgage is free of
         material damage and is in good repair and there is no proceeding
         pending or threatened for the total or partial condemnation of any
         Mortgaged Property;

                  (xii) to the best of the Mortgage Loan Seller's knowledge, the
         Mortgaged Property and all improvements thereon comply with all
         requirements of any applicable zoning and subdivision laws and
         ordinances;

                  (xiii) a lender's title insurance policy (on an ALTA or CLTA
         form) or binder, or other assurance of title customary in the relevant
         jurisdiction therefor in a form acceptable to Fannie Mae or Freddie
         Mac, was issued on the date that each Mortgage Loan was created by a
         title insurance company which, to the best of the Mortgage Loan
         Seller's knowledge, was qualified to do business in the jurisdiction
         where the related Mortgaged Property is located, insuring the Mortgage
         Loan Seller and its successors and assigns that the Mortgage is a first
         priority lien on the related Mortgaged Property in the original
         principal amount of the Mortgage Loan. The Mortgage Loan Seller is the
         sole insured under such lender's title insurance policy, and such
         policy, binder or assurance is valid and remains in full force and
         effect, and each such policy, binder or assurance shall contain all
         applicable endorsements including a negative amortization endorsement,
         if applicable;

                  (xiv) at the time of origination, each Mortgaged Property was
         the subject of an appraisal which conformed to the underwriting
         requirements of the originator of the Mortgage Loan and, the appraisal
         is in a form acceptable to Fannie Mae or FHLMC;

                  (xv) as of the Closing Date, the improvements on each
         Mortgaged Property securing a Mortgage Loan is insured (by an insurer
         which is acceptable to the Mortgage Loan Seller) against loss by fire
         and such hazards as are covered under a standard extended coverage
         endorsement in the locale in which the Mortgaged Property is located,
         in an amount



                                      J-11
<PAGE>



         which is not less than the lesser of the maximum insurable value of the
         improvements securing such Mortgage Loan or the outstanding principal
         balance of the Mortgage Loan, but in no event in an amount less than an
         amount that is required to prevent the Mortgagor from being deemed to
         be a co-insurer thereunder; if the improvement on the Mortgaged
         Property is a condominium unit, it is included under the coverage
         afforded by a blanket policy for the condominium project; if upon
         origination of the related Mortgage Loan, the improvements on the
         Mortgaged Property were in an area identified as a federally designated
         flood area, a flood insurance policy is in effect in an amount
         representing coverage not less than the least of (i) the outstanding
         principal balance of the Mortgage Loan, (ii) the restorable cost of
         improvements located on such Mortgaged Property or (iii) the maximum
         coverage available under federal law; and each Mortgage obligates the
         Mortgagor thereunder to maintain the insurance referred to above at the
         Mortgagor's cost and expense;

                  (xvi) each Mortgage Loan constitutes a "qualified mortgage"
         under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
         1.860G-2(a)(1);

                  (xvii) each Mortgage Loan was originated or funded by (a) a
         savings and loan association, savings bank, commercial bank, credit
         union, insurance company or similar institution which is supervised and
         examined by a federal or state authority (or originated by (i) a
         subsidiary of any of the foregoing institutions which subsidiary is
         actually supervised and examined by applicable regulatory authorities
         or (ii) a mortgage loan correspondent of any of the foregoing and that
         was originated pursuant to the criteria established by any of the
         foregoing) or (b) a mortgagee approved by the Secretary of Housing and
         Urban Development pursuant to sections 203 and 211 of the National
         Housing Act, as amended;

                  (xviii) none of the Mortgage Loans are (a) loans subject to 12
         CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation
         Z, the regulation implementing TILA, which implements the Home
         Ownership and Equity Protection Act of 1994, as amended or (b)
         classified and/or defined as a "high cost home loan" under any federal,
         state or local law, including, but not limited to, the States of
         Georgia or North Carolina;

                  (xxix) the information set forth in Schedule A of the
         Prospectus Supplement with respect to the Mortgage Loans is true and
         correct in all material respect; and.

                  (xxx) None of Mortgage Loans are secured by a leasehold
         interest.

                  It is understood and agreed that the representations and
warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or assignment of Mortgage or the
examination of any Mortgage File. Upon any substitution for a Mortgage Loan, the
representations and warranties set forth above shall be deemed to be made by the
Mortgage Loan Seller as to any Substitute Mortgage Loan as of the date of
substitution.

                  Upon discovery or receipt of notice by the Mortgage Loan
Seller, the Purchaser or the Trustee of a breach of any representation or
warranty of the Mortgage Loan Seller set forth in this Section 7 which
materially and adversely affects the value of the interests of the Purchaser,
the


                                      J-12

<PAGE>



Certificateholders or the Trustee in any of the Mortgage Loans delivered to the
Purchaser pursuant to this Agreement, the party discovering or receiving notice
of such breach shall give prompt written notice to the others. In the case of
any such breach of a representation or warranty set forth in this Section 7,
within 90 days from the date of discovery by the Mortgage Loan Seller, or the
date the Mortgage Loan Seller is notified by the party discovering or receiving
notice of such breach (whichever occurs earlier), the Mortgage Loan Seller will
(i) cure such breach in all material respects, (ii) purchase the affected
Mortgage Loan at the applicable Purchase Price or (iii) if within two years of
the Closing Date, substitute a qualifying Substitute Mortgage Loan in exchange
for such Mortgage Loan. The obligations of the Mortgage Loan Seller to cure,
purchase or substitute a qualifying Substitute Mortgage Loan shall constitute
the Purchaser's, the Trustee's and the Certificateholder's sole and exclusive
remedy under this Agreement or otherwise respecting a breach of representations
or warranties hereunder with respect to the Mortgage Loans, except for the
obligation of the Mortgage Loan Seller to indemnify the Purchaser for such
breach as set forth in and limited by Section 13 hereof.

                  Any cause of action against the Mortgage Loan Seller or
relating to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller or
notice thereof by the party discovering such breach and (ii) failure by the
Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.

                  SECTION 8. REPRESENTATIONS AND WARRANTIES CONCERNING THE
MORTGAGE LOAN SELLER. As of the date hereof and as of the Closing Date, the
Mortgage Loan Seller represents and warrants to the Purchaser as to itself in
the capacity indicated as follows:

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

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

                  (c) the execution and delivery by the Mortgage Loan Seller of
this Agreement have been duly authorized by all necessary action on the part of
the Mortgage Loan 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 Mortgage
Loan Seller or its properties or the charter or by-laws of the Mortgage Loan
Seller, except those conflicts, breaches or defaults which would not reasonably
be expected to have a material adverse effect on the Mortgage Loan Seller's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;



                                      J-13

<PAGE>



                  (d) the execution, delivery and performance by the Mortgage
Loan 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 and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet completed;

                  (e) this Agreement has been duly executed and delivered by the
Mortgage Loan Seller and, assuming due authorization, execution and delivery by
the Purchaser, constitutes a valid and binding obligation of the Mortgage Loan
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);

                  (f) there are no actions, suits or proceedings pending or, to
the knowledge of the Mortgage Loan Seller, threatened against the Mortgage Loan
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 Mortgage Loan Seller will be determined adversely to the Mortgage Loan
Seller and will if determined adversely to the Mortgage Loan Seller materially
and adversely affect the Mortgage Loan Seller's ability to perform its
obligations under this Agreement; and the Mortgage Loan 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

                  (g) the Mortgage Loan Seller's Information (as defined in
Section 13(a) hereof) does not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.

                  SECTION 9. REPRESENTATIONS AND WARRANTIES CONCERNING THE
PURCHASER. As of the date hereof and as of the Closing Date, the Purchaser
represents and warrants to the Mortgage Loan Seller as follows:

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

                  (b) the Purchaser 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;

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


                                      J-14

<PAGE>



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
Purchaser or its properties or the articles of incorporation or by-laws of the
Purchaser, except those conflicts, breaches or defaults which would not
reasonably be expected to have a material adverse effect on the Purchaser's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;

                  (d) the execution, delivery and performance by the Purchaser
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;

                  (e) this Agreement has been duly executed and delivered by the
Purchaser and, assuming due authorization, execution and delivery by the
Mortgage Loan Seller, constitutes a valid and binding obligation of the
Purchaser 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);

                  (f) there are no actions, suits or proceedings pending or, to
the knowledge of the Purchaser, threatened against the Purchaser, 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 Purchaser will be
determined adversely to the Purchaser and will if determined adversely to the
Purchaser materially and adversely affect the Purchaser's ability to perform its
obligations under this Agreement; and the Purchaser 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

                  (g) the Purchaser's Information (as defined in Section 13(b)
hereof) does not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.

                  SECTION 10. CONDITIONS TO CLOSING.

                  (a) The obligations of the Purchaser under this Agreement will
be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:

                           (1) Each of the obligations of the Mortgage Loan
                  Seller required to be performed at or prior to the Closing
                  Date pursuant to the terms of this Agreement shall have been
                  duly performed and complied with in all material respects; all
                  of the representations and warranties of the Mortgage Loan
                  Seller under this Agreement shall be true and correct as of
                  the date or dates specified in all material respects; and no
                  event shall have occurred which, with notice or the passage of
                  time, would constitute a default under this Agreement, or the
                  Pooling and Servicing Agreement;


                                      J-15

<PAGE>



                  and the Purchaser shall have received certificates to that
                  effect signed by authorized officers of the Mortgage Loan
                  Seller.

                           (2) The Purchaser shall have received all of the
                  following closing documents, in such forms as are agreed upon
                  and reasonably acceptable to the Purchaser, duly executed by
                  all signatories (other than the Purchaser) as required
                  pursuant to the respective terms thereof:

                  (i) If required pursuant to Section 3 hereof, the Amendment
         dated as of the Closing Date and any documents referred to therein;

                  (ii) If required pursuant to Section 3 hereof, the Final
         Mortgage Loan Schedule containing the information set forth on Exhibit
         2 hereto, one copy to be attached to each counterpart of the Amendment;

                  (iii) The Pooling and Servicing Agreement, in form and
         substance reasonably satisfactory to the Trustee and the Purchaser, and
         all documents required thereby duly executed by all signatories;

                  (iv) A certificate of an officer of the Mortgage Loan Seller
         dated as of the Closing Date, in a form reasonably acceptable to the
         Purchaser, and attached thereto the resolutions of the Mortgage Loan
         Seller authorizing the transactions contemplated by this Agreement,
         together with copies of the charter and by-laws of the Mortgage Loan
         Seller;

                  (v) One or more opinions of counsel from the Mortgage Loan
         Seller's counsel otherwise in form and substance reasonably
         satisfactory to the Purchaser, the Trustee and each Rating Agency;

                  (vi) A letter from each of the Rating Agencies giving each
         Class of Certificates set forth on Schedule A the rating set forth on
         Schedule A; and

                  (vii) Such other documents, certificates (including additional
         representations and warranties) and opinions as may be reasonably
         necessary to secure the intended ratings from each Rating Agency for
         the Certificates.

                           (3) The Certificates to be sold to Bear Stearns
                  pursuant to the Underwriting Agreement and the Purchase
                  Agreement shall have been issued and sold to Bear Stearns.

                           (4) The Mortgage Loan Seller shall have furnished to
                  the Purchaser such other certificates of its officers or
                  others and such other documents and opinions of counsel to
                  evidence fulfillment of the conditions set forth in this
                  Agreement and the transactions contemplated hereby as the
                  Purchaser and its counsel may reasonably request.



                                      J-16

<PAGE>



                  (b) The obligations of the Mortgage Loan Seller under this
Agreement shall be subject to the satisfaction, on or prior to the Closing Date,
of the following conditions:

                           (1) The obligations of the Purchaser required to be
                  performed by it on or prior to the Closing Date pursuant to
                  the terms of this Agreement shall have been duly performed and
                  complied with in all material respects, and all of the
                  representations and warranties of the Purchaser under this
                  Agreement shall be true and correct in all material respects
                  as of the date hereof and as of the Closing Date, and no event
                  shall have occurred which would constitute a breach by it of
                  the terms of this Agreement, and the Mortgage Loan Seller
                  shall have received a certificate to that effect signed by an
                  authorized officer of the Purchaser.

                           (2) The Mortgage Loan Seller shall have received
                  copies of all of the following closing documents, in such
                  forms as are agreed upon and reasonably acceptable to the
                  Mortgage Loan Seller, duly executed by all signatories other
                  than the Mortgage Loan Seller as required pursuant to the
                  respective terms thereof:

                  (i) If required pursuant to Section 3 hereof, the Amendment
         dated as of the Closing Date and any documents referred to therein;

                  (ii) The Pooling and Servicing Agreement, in form and
         substance reasonably satisfactory to the Mortgage Loan Seller, and all
         documents required thereby duly executed by all signatories;

                  (iii) A certificate of an officer of the Purchaser dated as of
         the Closing Date, in a form reasonably acceptable to the Mortgage Loan
         Seller, and attached thereto the resolutions of the Purchaser
         authorizing the transactions contemplated by this Agreement and the
         Pooling and Servicing Agreement, together with copies of the
         Purchaser's articles of incorporation, and evidence as to the good
         standing of the Purchaser dated as of a recent date;

                  (iv) One or more opinions of counsel from the Purchaser's
         counsel in form and substance reasonably satisfactory to the Mortgage
         Loan Seller;

                  (v) Such other documents, certificates (including additional
         representations and warranties) and opinions as may be reasonably
         necessary to secure the intended rating from each Rating Agency for the
         Certificates;

                  SECTION 11. FEES AND EXPENSES. Subject to Section 16 hereof,
the Mortgage Loan Seller shall pay on the Closing Date or such later date as may
be agreed to by the Purchaser (i) the fees and expenses of the Mortgage Loan
Seller's attorneys and the reasonable fees and expenses of the Purchaser's
attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the fee
for the use of Purchaser's Registration Statement based on the aggregate
original principal amount of the Certificates and the filing fee of the
Commission as in effect on the date on which the Registration Statement was
declared effective, (iv) the fees and expenses including counsel's fees and
expenses in connection with any "blue sky" and legal investment matters, (v) the
fees and expenses of the


                                      J-17

<PAGE>



Trustee which shall include without limitation the fees and expenses of the
Trustee (and the fees and disbursements of its counsel) with respect to (A)
legal and document review of this Agreement, the Pooling and Servicing
Agreement, the Certificates and related agreements, (B) attendance at the
Closing and (C) review of the Mortgage Loans to be performed by the Custodian,
(vi) the expenses for printing or otherwise reproducing the Certificates, the
Prospectus and the Prospectus Supplement, (vii) the fees and expenses of each
Rating Agency (both initial and ongoing), (viii) the fees and expenses relating
to the preparation and recordation of mortgage assignments (including
intervening assignments, if any and if available, to evidence a complete chain
of title from the originator to the Trustee) from the Mortgage Loan Seller to
the Trustee or the expenses relating to the Opinion of Counsel referred to in
Section 6(a) hereof, as the case may be, and (ix) Mortgage File due diligence
expenses and other out-of-pocket expenses incurred by the Purchaser in
connection with the purchase of the Mortgage Loans and by Bear Stearns in
connection with the sale of the Certificates. The Mortgage Loan Seller
additionally agrees to pay directly to any third party on a timely basis the
fees provided for above which are charged by such third party and which are
billed periodically.

                  SECTION 12. ACCOUNTANTS' LETTERS.

                  (a) Deloitte & Touche LLP will review the characteristics of a
sample of the Mortgage Loans described in the Final Mortgage Loan Schedule and
will compare those characteristics to the description of the Mortgage Loans
contained in the Prospectus Supplement under the captions "Summary of Prospectus
Supplement - The Mortgage Loans", "The Mortgage Pool" and "Certain
Characteristics of the Mortgage Loans" in Schedule A thereto. The Mortgage Loan
Seller will cooperate with the Purchaser in making available all information and
taking all steps reasonably necessary to permit such accountants to complete the
review and to deliver the letters required of them under the Underwriting
Agreement. Deloitte & Touche LLP will also confirm certain calculations as set
forth under the caption "Yield On The Certificates" in the Prospectus
Supplement.

                  (b) To the extent statistical information with respect to the
Master Servicer's or a Servicer's servicing portfolio is included in the
Prospectus Supplement under the caption "The Master Servicer and the Servicers,"
a letter from the certified public accountant for the Master Servicer and such
Servicer or Servicers will be delivered to the Purchaser dated the date of the
Prospectus Supplement, in the form previously agreed to by the Mortgage Loan
Seller and the Purchaser, with respect to such statistical information.

                  SECTION 13. INDEMNIFICATION.

                  (a) The Mortgage Loan Seller shall indemnify and hold harmless
the Purchaser and its directors, officers and controlling persons (as defined in
Section 15 of the Securities Act) from and against any loss, claim, damage or
liability or action in respect thereof, to which they or any of them may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon (i) any untrue
statement of a material fact contained in the MORTGAGE LOAN SELLER'S INFORMATION
as identified in EXHIBIT 3, the omission to state in the Prospectus Supplement
or Prospectus (or any amendment thereof or supplement thereto approved by the
Mortgage Loan Seller and in which additional Mortgage Loan Seller's Information
is identified), in reliance upon and in conformity with Mortgage Loan Seller's
Information a material


                                      J-18

<PAGE>



fact required to be stated therein or necessary to make the statements therein
in light of the circumstances in which they were made, not misleading, (ii) any
representation or warranty assigned or made by the Mortgage Loan Seller in
Section 7 or Section 8 hereof being, or alleged to be, untrue or incorrect, or
(iii) any failure by the Mortgage Loan Seller to perform its obligations under
this Agreement; and the Mortgage Loan Seller shall reimburse the Purchaser and
each other indemnified party for any legal and other expenses reasonably
incurred by them in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action.

         The foregoing indemnity agreement is in addition to any liability which
the Mortgage Loan Seller otherwise may have to the Purchaser or any other such
indemnified party.

                  (b) The Purchaser shall indemnify and hold harmless the
Mortgage Loan Seller and its respective directors, officers and controlling
persons (as defined in Section 15 of the Securities Act) from and against any
loss, claim, damage or liability or action in respect thereof, to which they or
any of them may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based upon
(i) any untrue statement of a material fact contained in the PURCHASER'S
INFORMATION as identified in EXHIBIT 4, the omission to state in the Prospectus
Supplement or Prospectus (or any amendment thereof or supplement thereto
approved by the Purchaser and in which additional Purchaser's Information is
identified), in reliance upon and in conformity with the Purchaser's
Information, a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made,
not misleading, (ii) any representation or warranty made by the Purchaser in
Section 9 hereof being, or alleged to be, untrue or incorrect, or (iii) any
failure by the Purchaser to perform its obligations under this Agreement; and
the Purchaser shall reimburse the Mortgage Loan Seller, and each other
indemnified party for any legal and other expenses reasonably incurred by them
in connection with investigating or defending or preparing to defend any such
loss, claim, damage, liability or action. The foregoing indemnity agreement is
in addition to any liability which the Purchaser otherwise may have to the
Mortgage Loan Seller, or any other such indemnified party,

                  (c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 13 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent it may elect by written notice delivered to the
indemnified party promptly (but, in any event, within 30 days) after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party. Notwithstanding
the foregoing, the indemnified party or parties shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by one of
the indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice


                                      J-19

<PAGE>



of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there is a conflict of interest between itself or
themselves and the indemnifying party in the conduct of the defense of any claim
or that the interests of the indemnified party or parties are not substantially
co-extensive with those of the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties (PROVIDED,
HOWEVER, that the indemnifying party shall be liable only for the fees and
expenses of one counsel in addition to one local counsel in the jurisdiction
involved. Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement or any claim or action
effected without its written consent; PROVIDED, HOWEVER, that such consent was
not unreasonably withheld.

                  (d) If the indemnification provided for in paragraphs (a) and
(b) of this Section 13 shall for any reason be unavailable to an indemnified
party in respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to in Section 13, then the indemnifying party shall in
lieu of indemnifying the indemnified party contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, in such proportion as shall be
appropriate to reflect the relative benefits received by the Mortgage Loan
Seller on the one hand and the Purchaser on the other from the purchase and sale
of the Mortgage Loans, the offering of the Certificates and the other
transactions contemplated hereunder. No person found liable for a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not also found liable
for such fraudulent misrepresentation.

                  (e) The parties hereto agree that reliance by an indemnified
party on any publicly available information or any information or directions
furnished by an indemnifying party shall not constitute negligence, bad faith or
willful misconduct by such indemnified party.

                  SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing but may be delivered by facsimile transmission
subsequently confirmed in writing. Notices to the Mortgage Loan Seller shall be
directed to EMC Mortgage Corporation, Mac Arthur Ridge II, 909 Hidden Ridge
Drive, Suite 200, Irving, Texas 75038 (Telecopy: (972-444-2880)), and notices to
the Purchaser shall be directed to Structured Asset Mortgage Investments II
Inc., 383 Madison Avenue, New York, New York 10179 (Telecopy: (212-272-7206)),
Attention: Baron Silverstein; or to any other address as may hereafter be
furnished by one party to the other party by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on the
date received at the premises of the addressee (as evidenced, in the case of
registered or certified mail, by the date noted on the return receipt) provided
that it is received on a business day during normal business hours and, if
received after normal business hours, then it shall be deemed to be received on
the next business day.

                  SECTION 15. TRANSFER OF MORTGAGE LOANS. The Purchaser retains
the right to assign the Mortgage Loans and any or all of its interest under this
Agreement to the Trustee without the consent of the Mortgage Loan Seller, and,
upon such assignment, the Trustee shall succeed to the applicable rights and
obligations of the Purchaser hereunder; PROVIDED, HOWEVER, the Purchaser shall
remain entitled to the benefits set forth in Sections 11, 13 and 17 hereto and
as provided in Section


                                      J-20

<PAGE>



2(a). Notwithstanding the foregoing, the sole and exclusive right and remedy of
the Trustee with respect to a breach of representation or warranty of the
Mortgage Loan Seller shall be the purchase or substitution obligations of the
Mortgage Loan Seller contained in Sections 5 and 7 hereof.

                  SECTION 16. TERMINATION. This Agreement may be terminated (a)
by the mutual consent of the parties hereto prior to the Closing Date, (b) by
the Purchaser, if the conditions to the Purchaser's obligation to close set
forth under Section 10(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the Mortgage
Loan Seller's obligation to close set forth under Section 10(b) hereof are not
fulfilled as and when required to be fulfilled. In the event of termination
pursuant to clause (b), the Mortgage Loan Seller shall pay, and in the event of
termination pursuant to clause (c), the Purchaser shall pay, all reasonable
out-of- pocket expenses incurred by the other in connection with the
transactions contemplated by this Agreement. In the event of a termination
pursuant to clause (a), each party shall be responsible for its own expenses.

                  SECTION 17. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Mortgage Loan
Seller submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive delivery of the Mortgage Loans to the Purchaser (and by
the Purchaser to the Trustee). Subsequent to the delivery of the Mortgage Loans
to the Purchaser, the Mortgage Loan Seller's representations and warranties
contained herein with respect to the Mortgage Loans shall be deemed to relate to
the Mortgage Loans actually delivered to the Purchaser and included in the Final
Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those
Mortgage Loans deleted from the Preliminary Mortgage Loan Schedule pursuant to
Section 3 hereof prior to the Closing.

                  SECTION 18. SEVERABILITY. If any provision of this Agreement
shall be prohibited or invalid under applicable law, the Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.

                  SECTION 19. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which will be an original, but which together shall
constitute one and the same agreement.

                  SECTION 20. AMENDMENT. This Agreement cannot be amended or
modified in any manner without the prior written consent of each party.

                  SECTION 21. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.

                  SECTION 22. FURTHER ASSURANCES. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which may
be required by either Rating Agency.



                                      J-21

<PAGE>



                  SECTION 23. SUCCESSORS AND ASSIGNS.

         This Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns and, to the extent specified in Section 13 hereof, Bear
Stearns, and their directors, officers and controlling persons (within the
meaning of federal securities laws). The Mortgage Loan Seller acknowledges and
agrees that the Purchaser may assign its rights under this Agreement (including,
without limitation, with respect to the Mortgage Loan Seller's representations
and warranties respecting the Mortgage Loans) to the Trustee. Any person into
which the Mortgage Loan Seller may be merged or consolidated (or any person
resulting from any merger or consolidation involving the Mortgage Loan Seller),
any person resulting from a change in form of the Mortgage Loan Seller or any
person succeeding to the business of the Mortgage Loan Seller, shall be
considered the "successor" of the Mortgage Loan Seller hereunder and shall be
considered a party hereto without the execution or filing of any paper or any
further act or consent on the part of any party hereto. Except as provided in
the two preceding sentences, this Agreement cannot be assigned, pledged or
hypothecated by either party hereto without the written consent of the other
parties to this Agreement and any such assignment or purported assignment shall
be deemed null and void.

                  SECTION 24. THE MORTGAGE LOAN SELLER. The Mortgage Loan Seller
will keep in full effect all rights as are necessary to perform their respective
obligations under this Agreement.

                  SECTION 25. ENTIRE AGREEMENT. This Agreement contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof.

                  SECTION 26. NO PARTNERSHIP. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]





                                      J-22

<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.

                                            EMC MORTGAGE CORPORATION


                                            By:    _____________________________
                                            Name:  Sherri Lauritsen
                                            Title: Executive Vice President


                                            STRUCTURED ASSET MORTGAGE
                                            INVESTMENTS II INC.


                                            By:    _____________________________
                                            Name:  Baron Silverstein
                                            Title: Vice President



















                                      J-23

<PAGE>



                                    EXHIBIT 1
                            CONTENTS OF MORTGAGE FILE

         With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser or its designee, and which shall be delivered to the Purchaser or its
designee pursuant to the terms of the Agreement.

         (a) with respect to each Mortgage Loan (other than a Cooperative Loan):

                  (i) The original Mortgage Note, endorsed without recourse to
         the order of the Trustee and showing an unbroken chain of endorsements
         from the originator thereof to the Person endorsing it to the Trustee,
         or a lost note affidavit together with a copy of the related Mortgage
         Note;

                  (ii) The original Mortgage and, if the related Mortgage Loan
         is a MOM Loan, noting the presence of the MIN and language indicating
         that such Mortgage Loan is a MOM Loan, which shall have been recorded
         (or if the original is not available, a copy), with evidence of such
         recording indicated thereon (or if the original is not available, a
         copy), with evidence of such recording indicated thereon (or if 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 recording as specified in Section 2.01(b) of the
         Pooling and Servicing Agreement, shall be in recordable form);

                  (iii) unless the Mortgage Loan is a MOM Loan, 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 "LaSalle Bank National Association, as Trustee", with
         evidence of recording with respect to each Mortgage Loan in the name of
         the Trustee thereon (or if (A) 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 in Section 2.01(b) of the Pooling and Servicing
         Agreement, the Seller may deliver a true copy thereof with a
         certification by the Seller, on the face of such copy, substantially as
         follows: "Certified to be a true and correct copy of the original,
         which has been transmitted for recording" or (B) the related Mortgaged
         Property is located in a state other than Maryland and an Opinion of
         Counsel has been provided as set forth in Section 2.01(b) of the
         Pooling and Servicing Agreement, shall be in recordable form);

                  (iv) all intervening assignments of the Security Instrument,
         if applicable and only to the extent available to the Mortgage Loan
         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;


                                      J-24

<PAGE>



                  (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.

         (b) with respect to each Cooperative Loan so assigned:

                  (i) The original Mortgage Note, endorsed without recourse to
         the order of the Trustee and showing an unbroken chain of endorsements
         from the originator thereof to the Person endorsing it to the Trustee,
         or lost note affidavit, together with a copy of the related Mortgage
         Note;

                  (ii) A counterpart of the Cooperative Lease and the Assignment
         of Proprietary Lease to the originator of the Cooperative Loan with
         intervening assignments showing an unbroken chain of title from such
         originator to the Trustee;

                  (iii) The related Cooperative Stock Certificate, representing
         the related Cooperative Stock pledged with respect to such Cooperative
         Loan, together with an undated stock power (or other similar
         instrument) executed in blank;

                  (iv) The original recognition agreement by the Cooperative of
         the interests of the mortgagee with respect to the related Cooperative
         Loan and any transfer documents related to the recognition agreement;

                  (v)      The Security Agreement;

                  (vi) Copies of the original UCC-1 financing statement, and any
         continuation statements, filed by the originator of such Cooperative
         Loan as secured party, each with evidence of recording thereof,
         evidencing the interest of the originator under the Security Agreement
         and the Assignment of Proprietary Lease;

                  (vii) Copies of the filed UCC-3 assignments of the security
         interest referenced in clause (vi) above showing an unbroken chain of
         title from the originator to the Trustee, each with evidence of
         recording thereof, evidencing the interest of the originator under the
         Security Agreement and the Assignment of Proprietary Lease;

                  (viii) An executed assignment of the interest of the
         originator in the Security Agreement and Assignment of Proprietary
         Lease, showing an unbroken chain of title from the originator to the
         Trustee; and

                  (ix) The original of each modification, assumption agreement
         or preferred loan agreement, if any, relating to such Cooperative Loan.



                                      J-25

<PAGE>



                                    EXHIBIT 2
                                    ---------

                       MORTGAGE LOAN SCHEDULE INFORMATION
                       ----------------------------------

         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 city, state and zip code of the Mortgaged Property;

(d)      the property type;

(e)      the Mortgage Interest Rate;

(f)      the 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;

(1)      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 Gross Margin, if applicable;

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

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


                                      J-26

<PAGE>



(u)      the Periodic Rate Cap, if applicable;

(v)      the number of days delinquent, if any;

(w)      which Mortgage Loans adjust after an initial fixed-rate period of
three, five, seven or ten years;

(x)       the Loan Group;

(y)      the Prepayment Charge Loans; and

(z)      the Servicer.

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 (k)
and (n) above, the weighted average by principal balance as of the Cut-off Date
of each of the rates described under (e), (f) and (g) above, and the weighted
average remaining term to maturity by unpaid principal balance as of the Cut-off
Date.



                                      J-27

<PAGE>



                                    EXHIBIT 3
                                    ---------

                       MORTGAGE LOAN SELLER'S INFORMATION
                       ----------------------------------

         All information in the Prospectus Supplement described under the
following Sections: "SUMMARY OF PROSPECTUS SUPPLEMENT -- The Mortgage Loans,"
"THE MORTGAGE POOL" and "SCHEDULE A -- CERTAIN CHARACTERISTICS OF THE MORTGAGE
LOANS."






                                      J-28

<PAGE>



                                    EXHIBIT 4
                                    ---------

                             PURCHASER'S INFORMATION
                             -----------------------

         All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.







                                      J-29

<PAGE>



                                    EXHIBIT 5
                                    ---------

                             SCHEDULE OF LOST NOTES
                             ----------------------

                             Available Upon Request








                                      J-30

<PAGE>



                                   SCHEDULE A
                                   ----------

                 REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
                 -----------------------------------------------

                               Public Certificates
                               -------------------


                         Class                  S&P               Fitch
        -----------------------------     --------------    ----------------
        Class I-A-1..................           AAA                AAA
        Class I-A-2..................           AAA                AAA
        Class I-A-3..................           AAA                AAA
        Class I-A-4..................           AAA                AAA
        Class I-X....................           AAA                AAA
        Class I-PO...................           AAA                AAA
        Class II-A-1.................           AAA                AAA
        Class II-A-2.................           AAA                AAA
        Class II-A-3.................           AAA                AAA
        Class II-X...................           AAA                AAA
        Class II-PO..................           AAA                AAA
        Class III-A-1................           AAA                AAA
        Class R-I....................           AAA                NR
        Class R-II...................           AAA                NR
        Class R-III..................           AAA                NR
        Class B-1....................           AA                 NR
        Class B-2....................            A                 NR
        Class B-3....................           BBB                NR


None of the above ratings have been lowered since the respective dates of such
letters.

                                               Private Certificates
                                               --------------------

                        Class                  S&P               Fitch
        -----------------------------     --------------    ----------------
        Class B-4....................           BB                 NR
        Class B-5....................            B                 NR
        Class B-6....................           NR                 NR

None of the above ratings have been lowered since the respective dates of such
letters.


                                      J-31

<PAGE>



                                   SCHEDULE B
                                   ----------

                             MORTGAGE LOAN SCHEDULE
                             ----------------------

                             [Provided upon request]













                                      J-32

<PAGE>



                                                                       EXHIBIT K

                    SCHEDULE OF FORECLOSURE RESTRICTED LOANS

                             [provided upon request]








                                       K-1

<PAGE>



                                                                       EXHIBIT L

                         SCHEDULE OF SECTION 3.13 LOANS

                             [provided upon request]









                                       L-1

<PAGE>


                                                                       EXHIBIT M

                           SCHEDULE OF CASH FLOW LOANS

                             [provided upon request]








                                       M-1