Exhibit 1

                 STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
                                    DEPOSITOR

                           JPMORGAN CHASE BANK, N.A.,
                                     TRUSTEE

                             WELLS FARGO BANK, N.A.,
                  MASTER SERVICER AND SECURITIES ADMINISTRATOR

                                       and

                            EMC MORTGAGE CORPORATION
                               SELLER AND COMPANY

                         POOLING AND SERVICING AGREEMENT

                           Dated as of January 1, 2005

                  Structured Asset Mortgage Investments II Inc.

            Prime Mortgage Trust, Mortgage Pass-Through Certificates
                   Prime Mortgage Trust, Re-REMIC Certificates

                                  Series 2005-1

<PAGE>

                                TABLE OF CONTENTS

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<CAPTION>
                                                                                                        Page
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ARTICLE I      Definitions .........................................................................       3

   Section 1.01  Calculation of LIBOR ..............................................................      41

ARTICLE II     Conveyance of Mortgage Loans and Underlying Certificates; Original
               Issuance of Mortgage Pass-Through Certificates and Re-REMIC Certificates ............      42

   Section 2.01  Conveyance of Mortgage Loans and Underlying Certificates to Trustee ...............      42

   Section 2.02  Acceptance of Mortgage Loans and Underlying Certificates by Trustee ...............      46

   Section 2.03  Assignment of Interest in the Mortgage Loan Purchase Agreement ....................      49

   Section 2.04  Substitution of Mortgage Loans ....................................................      50

   Section 2.05  Issuance of Certificates ..........................................................      51

   Section 2.06  Representations and Warranties Concerning the Depositor ...........................      52

ARTICLE III    Administration of the Trust Fund and Servicing of Mortgage Loans ....................      55

   Section 3.01  Master Servicer and Securities Administrator ......................................      55

   Section 3.02  REMIC-Related Covenants ...........................................................      56

   Section 3.03  Monitoring of Servicers ...........................................................      56

   Section 3.04  Fidelity Bond .....................................................................      57

   Section 3.05  Power to Act; Procedures ..........................................................      58

   Section 3.06  Due-on-Sale Clauses; Assumption Agreements ........................................      59

   Section 3.07  Release of Mortgage Files .........................................................      59

   Section 3.08  Documents, Records and Funds in Possession of Master Servicer to Be
                 Held for Trustee ..................................................................      60

   Section 3.09  Standard Hazard Insurance and Flood Insurance Policies ............................      60

   Section 3.10  Presentment of Claims and Collection of Proceeds ..................................      61

   Section 3.11  Maintenance of the Primary Mortgage Insurance Policies ............................      61

   Section 3.12  Trustee to Retain Possession of Certain Insurance Policies and Documents ..........      62

   Section 3.13  Realization Upon Defaulted Mortgage Loans .........................................      62

   Section 3.14  Compensation for the Master Servicer ..............................................      62

   Section 3.15  REO Property ......................................................................      63

   Section 3.16  Annual Officer's Certificate as to Compliance .....................................      63

   Section 3.17  Annual Independent Accountant's Servicing Report ..................................      64

   Section 3.18  Reports Filed with Securities and Exchange Commission .............................      64

   Section 3.19  The Company .......................................................................      66
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<TABLE>
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   Section 3.20  UCC.66

   Section 3.21  Optional Purchase of Defaulted Mortgage Loans .....................................      66

ARTICLE IV     Accounts ............................................................................      67

   Section 4.01  Protected Account .................................................................      67

   Section 4.02  Master Servicer Collection Account ................................................      68

   Section 4.03  Permitted Withdrawals and Transfers from the Master Servicer Collection
                 Account ...........................................................................      69

   Section 4.04  Distribution Account ..............................................................      70

   Section 4.05  Permitted Withdrawals and Transfers from the Distribution Account .................      71

   Section 4.06  Re-REMIC Certificate Account ......................................................      72

   Section 4.07  Permitted Withdrawals From the Re-REMIC Certificate Account .......................      73

ARTICLE V      Certificates ........................................................................      74

   Section 5.01  Mortgage Pass-Through Certificates and Re-REMIC Certificates ......................      74

   Section 5.02  Registration of Transfer and Exchange of Certificates .............................      81

   Section 5.03  Mutilated, Destroyed, Lost or Stolen Certificates .................................      84

   Section 5.04  Persons Deemed Owners .............................................................      84

   Section 5.05  Transfer Restrictions on Residual Certificates ....................................      85

   Section 5.06  Restrictions on Transferability of Certificates ...................................      86

   Section 5.07  ERISA Restrictions ................................................................      86

   Section 5.08  Rule 144A Information .............................................................      88

   Section 5.09  Restrictions on Transferability of Re-REMIC Certificates ..........................      88

ARTICLE VI     Payments to Certificateholders ......................................................      96

   Section 6.01  Distributions on the Mortgage Pass-Through Certificates ...........................      96

   Section 6.02  Distributions on the Re-REMIC Certificates ........................................     100

   Section 6.03  Allocation of Losses ..............................................................     101

   Section 6.04  Payments ..........................................................................     103

   Section 6.05  Statements to Certificateholders ..................................................     103

   Section 6.06  Monthly Advances ..................................................................     107

   Section 6.07  Compensating Interest Payments ....................................................     108

   Section 6.08  Policy Matters ....................................................................     108

   Section 6.09  Reserve Fund ......................................................................     111

   Section 6.10  Rounding Account ..................................................................     111

   Section 6.11  Principal Distributions on the Insured Certificates ...............................     112
</TABLE>


                                     - ii -
<PAGE>

<TABLE>
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ARTICLE VII    The Master Servicer- ................................................................     117

   Section 7.01  Liabilities of the Master Servicer ................................................     117

   Section 7.02  Merger or Consolidation of the Master Servicer ....................................     117

   Section 7.03  Indemnification of the Trustee, the Master Servicer and the
                 Securities Administrator ..........................................................     117

   Section 7.04  Limitations on Liability of the Master Servicer and Others ........................     118

   Section 7.05  Master Servicer Not to Resign .....................................................     119

   Section 7.06  Successor Master Servicer .........................................................     120

   Section 7.07  Sale and Assignment of Master Servicing ...........................................     120

ARTICLE VIII   Default .............................................................................     121

   Section 8.01  Events of Default .................................................................     121

   Section 8.02  Trustee to Act; Appointment of Successor ..........................................     123

   Section 8.03  Notification to Certificateholders ................................................     124

   Section 8.04  Waiver of Defaults ................................................................     124

   Section 8.05  List of Certificateholders ........................................................     124

ARTICLE IX     Concerning the Trustee and the Securities Administrator .............................     125

   Section 9.01  Duties of Trustee .................................................................     125

   Section 9.02  Certain Matters Affecting the Trustee and the Securities Administrator ............     127

   Section 9.03  Trustee and Securities Administrator Not Liable for Mortgage Pass-Through
                 Certificates, Re-REMIC Certificates, Mortgage Loans or Underlying Certificates ....     129

   Section 9.04  Trustee and Securities Administrator May Own Certificates .........................     129

   Section 9.05  Trustee's and Securities Administrator's Fees and Expenses ........................     129

   Section 9.06  Eligibility Requirements for Trustee and Securities Administrator .................     130

   Section 9.07  Insurance .........................................................................     131

   Section 9.08  Resignation and Removal of the Trustee and Securities Administrator ...............     131

   Section 9.09  Successor Trustee and Successor Securities Administrator ..........................     132

   Section 9.10  Merger or Consolidation of Trustee or Securities Administrator ....................     133

   Section 9.11  Appointment of Co-Trustee or Separate Trustee .....................................     133

   Section 9.12  Federal Information Returns and Reports to Certificateholders;
                 REMIC Administration ..............................................................     134

ARTICLE X      Termination .........................................................................     137

   Section 10.01 Termination Upon Repurchase by the Depositor or its Designee or Liquidation
                 of the Mortgage Loans .............................................................     137
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   Section 10.02 Additional Termination Requirements ...............................................     142

ARTICLE XI     Miscellaneous Provisions ............................................................     144

   Section 11.01 Intent of Parties .................................................................     144

   Section 11.02 Amendment .........................................................................     144

   Section 11.03 Recordation of Agreement ..........................................................     145

   Section 11.04 Limitation on Rights of Certificateholders ........................................     146

   Section 11.05 Acts of Certificateholders ........................................................     146

   Section 11.06 Governing Law .....................................................................     147

   Section 11.07 Notices ...........................................................................     148

   Section 11.08 Severability of Provisions ........................................................     148

   Section 11.09 Successors and Assigns ............................................................     149

   Section 11.10 Article and Section Headings ......................................................     149

   Section 11.11 Counterparts ......................................................................     149

   Section 11.12 Notice to Rating Agencies .........................................................     149

   Section 11.13 Radian Rights .....................................................................     149
</TABLE>

                                    EXHIBITS

Exhibit A-1   -    Form of Class I-A Certificates
Exhibit A-2   -    Form of Class I-B Certificates
Exhibit A-3   -    Form of Class I-PO Certificates
Exhibit A-4   -    Form of Class I-R Certificates
Exhibit A-5   -    Form of Class II-A Certificate
Exhibit A-6   -    Form of Class II-R Certificates
Exhibit A-7   -    Form of Regulation S Certificates
Exhibit B     -    Mortgage Loan Schedule
Exhibit C     -    Underlying Certificates Schedule
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 F-3        Form of Rule 144A Global Certificate to Regulation S Global
                     Certificate
Exhibit F-4        Form of Regulation S Global Certificate to Rule 144A Global
                     Certificate
Exhibit G     -    Form of Custodial Agreement
Exhibit H-1   -    EMC Servicing Agreement
Exhibit H-2   -    HSBC Servicing Agreement
Exhibit H-3   -    Nat City Servicing Agreement
Exhibit H-4   -    U.S. Central Servicing Agreement
Exhibit I     -    Assignment Agreements
Exhibit J     -    Mortgage Loan Purchase Agreement
Exhibit K     -    Certificate Guaranty Insurance Policy


                                     - iv -
<PAGE>

                         POOLING AND SERVICING AGREEMENT

      Pooling and Servicing Agreement dated as of January 1, 2005, among
Structured Asset Mortgage Investments II Inc., a Delaware corporation, as
depositor (the "Depositor"), JPMorgan Chase Bank, N.A., a banking association
organized under the laws of the United States, not in its individual capacity
but solely as trustee (the "Trustee"), Wells Fargo Bank, N.A., 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 and the Underlying Certificates from the Underlying Certificates
Seller. On the Closing Date, the Depositor will sell the Mortgage Loans, the
Underlying Certificates and certain other property to the related Trust Fund and
receive in consideration therefor the related Certificates, together evidencing
the entire beneficial ownership interest in the Trust Funds.

      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 I and the Class R-I Interest 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 II and the Class R-II Interest 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 III and the Class R-III Interest will be
designated the "residual interest" in such REMIC.

      The Class I-R Certificates will represent beneficial ownership of the
Class R-I Interest, the Class R-II Interest and the Class R-III Interest.

      The Trustee will elect to treat the segregated pool of assets consisting
of, among other things, the percentage interest of the Underlying Certificates
set forth herein as a REMIC for federal income tax purposes, and such segregated
pool of assets will be designated as REMIC IV. The Class II-R Certificates will
represent the sole class of "residual interests" in REMIC IV for purposes of the
REMIC Provisions.

      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 $183,539,285.25. The initial principal amount of the Mortgage
Pass-Through Certificates will not exceed such Outstanding Principal Balance.

<PAGE>

      The Underlying Certificates have an aggregate outstanding principal amount
as of the Closing Date equal to $159,959,712.75. The initial principal amount of
the Re-REMIC Certificates will not exceed such outstanding principal amount.

      Notwithstanding anything to the contrary contained herein, all references
with respect to the Mortgage Loans shall relate only to the Mortgage
Pass-Through Certificates and all references to the Underlying Certificates
shall relate only to the Re-REMIC Certificates. In no event shall the term
"Mortgage Loans" or "Mortgaged Property" include any Underlying Mortgage Loan or
any mortgaged property related thereto. Reference to "the Certificateholders" or
"the related Certificateholders" shall mean the Holders of the Mortgage
Pass-Through Certificates or Holders of the Re-REMIC Certificates or Holders of
all of the Certificates, as the context requires.

      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:


                                     - 2 -
<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, the Distribution Account,
the Re-REMIC Certificate Account and the Protected Account as the context may
require.

         Accrued Certificate Interest: For any Mortgage Pass-Through Certificate
for any Distribution Date, the interest accrued during the related Interest
Accrual Period at the applicable Pass-Through Rate on the Current Principal
Amount, or Notional Amount in the case of any Interest Only Certificate, of such
Mortgage Pass-Through Certificate immediately prior to such Distribution Date,
less (i) in the case of a Senior Certificate (other than the Class I-PO
Certificates), such Mortgage Pass-Through Certificate's share of any Net
Interest Shortfall from the Mortgage Loans and, after the Cross-Over Date, the
interest portion of any Realized Losses on the Mortgage Loans allocated thereto
in accordance with Section 6.03(i) and (ii) in the case of a Subordinate
Certificate, such Mortgage Pass-Through Certificate's share of any Net Interest
Shortfall from the Mortgage Loans and the interest portion of any Realized
Losses on the related Mortgage Loans allocated thereto in accordance with
Section 6.02(i). All calculations of interest on the Mortgage Pass-Through
Certificates will be made on the basis of on the basis of a 360-day year
consisting of twelve 30-day months.

      Adjustable Rate Certificates: The Class I-A-6 Certificates and Class I-A-7
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.


                                     - 3 -
<PAGE>

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

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

      Aggregate Collateral Report: With respect to the Underlying Certificates
and any Underlying Certificate Payment Date, the monthly collateral reports
forwarded to the holder thereof with respect to such Underlying Certificate
Payment Date as provided by the related Underlying Document for the Underlying
Certificates.

      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
for each Subgroup, 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 A-l+ in the case
of each of S&P and Fitch Ratings 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


                                     - 4 -
<PAGE>

been brought to the attention of the Securities Administrator, Radian 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 Agreement: The agreements attached hereto as Exhibit I, whereby
the related Servicing Agreements were assigned to the Trustee for the benefit of
the Holders of the Mortgage Pass-Through 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: With respect to the Mortgage Pass-Through
Certificates, March 25, 2035, and with respect to the Re-REMIC Certificates,
September 25, 2035, in each case if such day is not a Business Day, the next
succeeding Business Day.

      Available Funds: With respect to any Distribution Date and the Mortgage
Pass-Through Certificates, an amount equal to the aggregate of the following
amounts with respect to the Mortgage Loans: (a) all previously undistributed
payments on account of principal (including the principal portion of Scheduled
Payments, Principal Prepayments and the principal portion of Net Liquidation
Proceeds and Subsequent Recoveries) 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 and
Subsequent Recoveries 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;

            (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


                                     - 5 -
<PAGE>

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 this Agreement to the extent such amounts have not been retained
by, or paid previously to, such Servicer or the Master Servicer;

            (viii) amounts needed 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.

      Average Loss Severity Percentage: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the Loss Severity Percentages for each Mortgage Loan which had a Realized Loss
and the denominator of which is the number of Mortgage Loans which had Realized
Losses.

      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: On each Distribution Date, $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 Mortgage Pass-Through
Certificates, other than the Class I-B-4, Class I-B-5 and Class I-B-6
Certificates and the Residual Certificates, and all Classes of Re-REMIC
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, Radian, the
Master Servicer, any Servicer or the Securities Administrator is located are
authorized or obligated by law or executive order to be closed.

      Certificate: Any one of the Mortgage Pass-Through Certificates and
Re-REMIC Certificates executed and countersigned by the Trustee substantially in
the form of Exhibits A-1 through A-6 attached hereto.


                                     - 6 -
<PAGE>

      Certificate Principal Balance: With respect to the Class II-A Certificates
as of any date of determination, the Initial Certificate Principal Balance
thereof, minus any amounts previously distributed or allocated to such
Certificates in respect of principal in accordance with Section 6.02. The Class
II-R Certificates do not have a Certificate Principal Balance.

      Certificateholder: A Holder of a Mortgage Pass-Through Certificate or
Re-REMIC Certificate, 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.

      Class: With respect to the Mortgage Pass-Through Certificates, I-A-1,
I-A-2, I-A-3, I-A-4, I-A-5, I-A-6, I-A-7, I-A-8, I-PO, I-R, I-B-1, I-B-2, I-B-3,
I-B-4, I-B-5 and I-B-6, and with respect to the Re-REMIC Certificates, II-A-1,
II-A-2, II-A-3, II-A-4, II-A-5 and II-R.

      Class I-A Certificates: Any of the Class I-A-1, I-A-2, I-A-3, I-A-4,
I-A-5, I-A-6, I-A-7, I-A-8, I-PO, I-R, I-B-1, I-B-2, I-B-3, I-B-4, I-B-5 and
I-B-6 Certificates.

      Class I-R Certificates: The Class I-R Certificates (evidencing ownership
of the Class R-I Interest, Class R-II Interest and Class R-III Interest).

      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 sixth of clause (i) under subsection 6.01(a), and (ii)
principal actually distributed to the Class I-PO Certificates after giving
effect to clause (iii) under subsection 6.01(a).

      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 Subgroup 1 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 I-PO Certificate Principal Distribution Amount: The Class I-PO
Certificates shall be entitled to distributions from Subgroup 1. For each Class
of Class I-PO Certificates with respect to each Distribution Date will be an
amount equal to the sum of:

            (i) the PO Percentage of all scheduled payments of principal due on
      each Discount Mortgage Loan in Subgroup 1 on the related Due Date as
      specified in the amortization schedule at the time applicable thereto
      (after adjustment for previous principal prepayments but before any
      adjustment to such amortization schedule by reason of any bankruptcy or
      similar proceeding or any moratorium or similar waiver or grace period);


                                     - 7 -
<PAGE>

            (ii) the PO Percentage of the Scheduled Principal Balance of each
      Discount Mortgage Loan in Subgroup 1 which was the subject of a prepayment
      in full received by the Master Servicer during the applicable Prepayment
      Period;

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

            (iv) the lesser of (a) the PO Percentage of the sum of (A) all Net
      Liquidation Proceeds and Subsequent Recoveries allocable to principal on
      each Discount Mortgage Loan in Subgroup 1 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 Subgroup 1 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 I-PO Percentage of the sum of (A) the Scheduled Principal Balance
      of each Discount Mortgage Loan in Subgroup 1 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 Subgroup 1 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 PO Percentage of the sum of (a) the Scheduled Principal
      Balance of each Discount Mortgage Loan in Subgroup 1 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 Subgroup 1 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 II-A Certificates: Any of the Class II-A-1, Class II-A-2, Class
II-A-3, Class II-A-4 and II-A-5 Certificates.

      Class II-R Certificates: The Class II-R Certificates representing the sole
class of "residual interests" in REMIC IV.

      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-I Interest: The sole class of "residual interests" in REMIC I.

      Class R-II Interest: The sole class of "residual interests" in REMIC II.


                                     - 8 -
<PAGE>

      Class R-III Interest: The sole class of "residual interests" in REMIC III.

      Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
which initially shall be DTC, Clearstream, Luxembourg and Euroclear.

      Clearstream, Luxembourg: Clearstream Banking, a societe anonyme, a limited
liability company organized under the laws of Luxembourg.

      Closing Date: January 28, 2005.

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

      Compensating Interest Payment: As defined in Section 6.06.

      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 Mortgage 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 III 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


                                     - 9 -
<PAGE>

Agreement, is located at 4 New York Plaza, 6th Floor, New York, New York 10004,
Attention: Institutional Trust Services-Global Debt-Prime 2005-1. For purposes
of registration and transfer and exchange only, the Corporate Trust Office shall
be located at JPMorgan Chase Bank, N.A., 2001 Bryan Street, 8th Floor, Dallas,
Texas 75201, Attn: ITS Transfer Dept. - Prime Mortgage Trust, Series 2005-1.

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

      Current Principal Amount: With respect to any Mortgage Pass-Through
Certificate (other than an Interest Only Certificate) as of any Distribution
Date, the initial principal amount of such Certificate plus any Subsequent
Recoveries added to the Current Principal Amount of such Certificate pursuant to
Section 6.01(i), and reduced by (i) all amounts distributed on previous
Distribution Dates on such Mortgage Pass-Through Certificate with respect to
principal, (ii) the principal portion of all Realized Losses allocated prior to
such Distribution Date to such Mortgage Pass-Through Certificates, taking
account of the Loss Allocation Limitation and (iii) in the case of a Subordinate
Certificate, such Mortgage Pass-Through Certificate's pro rata share, if any, of
the applicable Subordinate Certificate Writedown Amount for previous
Distribution Dates. With respect to any Class of Mortgage Pass-Through
Certificates (other than an Interest Only Certificate), the Current Principal
Amount thereof will equal the sum of the Current Principal Amounts of all
Mortgage Pass-Through Certificate in such Class. Notwithstanding the foregoing,
solely for purposes of giving consents, directions, waivers, approvals, requests
and notices, the Class I-R 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. Exclusively for the purpose of determining any
subrogation rights of Radian arising under Section 6.08 hereof, the Current
Principal Amount of the Class I-A-3 Certificates shall not be reduced by the
amount of any payments made by Radian in respect of principal on such
Certificates under the Policy, except to the extent such payment shall have been
reimbursed to Radian pursuant to the provisions of this Agreement.

      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, N.A., or any successor custodian appointed
pursuant to the provisions hereof and of the Custodial Agreement.

      Cut-off Date: January 1, 2005.

      Cut-off Date Balance: An amount equal to $183,539,285.25.

      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.


                                     - 10 -
<PAGE>

      Deceased Holder: A Certificate Owner of an Insured Certificate who was a
natural person living at the time such interest was acquired and whose
authorized personal representative, surviving tenant by the entirety, surviving
joint tenant or surviving tenant in common or other person empowered to act on
behalf of a deceased Certificate Owner causes to be furnished to the Depository
Participant evidence of death satisfactory to the Depository Participant and any
tax waivers requested by the Depository Participant.

      Deficiency Amount: As of any Distribution Date, an amount equal to the sum
of:

      (1)   the excess of the Accrued Certificate Interest for the Class I-A-3
            Certificates on such Distribution Date over the amount of the
            Available Funds available to be distributed in respect of the Class
            I-A-3 Certificates on such Distribution Date;

      (2)   the principal portion of any Realized Losses allocated to the Class
            I-A-3 Certificates with respect to such Distribution Date; and

      (3)   the Current Principal Amount of the Class I-A-3 Certificates to the
            extent unpaid on the related Assumed Final Distribution Date (after
            taking into account all distributions of principal and allocations
            of Realized Losses with respect to such Certificates to be made on
            such date).

      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.

      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 Mortgage Loan: Any Mortgage Loan with a Net Mortgage Rate less
than 5.500% per annum.


                                     - 11 -
<PAGE>

      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 "JPMorgan Chase Bank, N.A.,
as Trustee f/b/o holders of Structured Asset Mortgage Investments II Inc., Prime
Mortgage Trust, Mortgage Pass-Through Certificates, Series 2005-1 - 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 February 2005,
or, if such 25th day is not a Business Day, the immediately following Business
Day.

      DTC Custodian: JPMorgan Chase Bank, N.A., or its successors in interest as
custodian for the Depository.

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

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

      Eligible Account: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1 or better by Standard & Poor's, F-1 by Fitch Ratings or
and P-1 by Moody's at the time of any deposit therein or (B) insured by the FDIC
(to the limits established by such Corporation), the uninsured deposits in which
account are otherwise secured such that, as evidenced by an Opinion of


                                     - 12 -
<PAGE>

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 determined without regard to
the Policy). Eligible Accounts may bear interest.

      EMC: EMC Mortgage Corporation.

      EMC Servicing Agreement: With respect to Mortgage Loans serviced by EMC,
the Servicing Agreement dated as of January 1, 2005, between the Depositor and
EMC, as attached hereto as Exhibit H-1 and as modified by the related Assignment
Agreement.

      ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Euroclear: Euroclear Clearance System, Societe Cooperative, a Belgium
cooperative cooperation.

      Euroclear Operator: Euroclear Bank S.A./N.V., as operator of the Euroclear
system.

      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


                                     - 13 -
<PAGE>

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.

      Fiscal Quarter: December 1 to February 29 (or the last day in such month),
March 1 to May 31, June 1 to August 31, or September 1 to November 30, as
applicable.

      Fannie Mae: Federal National Mortgage Association or any successor
thereto.

      FDIC: Federal Deposit Insurance Corporation or any successor thereto.

      Final Securities Payment Date: With respect to the Underlying
Certificates, the Underlying Certificates Payment Date that will be the last
Underlying Certificates Payment Date, as specified in a Notice of Final Payment
with respect to such Underlying Certificate.

      Final Certification: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.

      Fitch Ratings: Fitch, Inc.

      Fractional Undivided Interest: With respect to any Class of Mortgage
Pass-Through Certificates, the fractional undivided interest evidenced by any
Mortgage Pass-Through 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 Mortgage Pass-Through 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 Mortgage
Pass-Through Certificates in the aggregate, the fractional undivided interest
evidenced by (i) the Class I-R 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 Mortgage
Pass-Through Certificate and the denominator of which is the aggregate Notional
Amount of its respective Class and (iii) a Mortgage Pass-Through Certificate of
any other Class will be deemed to equal 97.75% multiplied by a fraction, the
numerator of which is the Current Principal Amount of such Mortgage Pass-Through
Certificate and the denominator of which is the aggregate Current Principal
Amount of all the Mortgage Pass-Through 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. With respect to any Class of
Re-REMIC Certificates, the fractional undivided interest evidenced by any
Re-REMIC Certificate of such Class, the numerator of which is the Certificate
Principal Balance of such Re-REMIC Certificate and the denominator of which is
the Certificate Principal Balance of such Class. With respect to the Re-REMIC
Certificates in the aggregate, the fractional undivided interest evidenced by
(i) the Class II-R Certificates will be deemed to equal 0.25% and (ii) a
Re-REMIC


                                     - 14 -
<PAGE>

Certificate of any other Class will be deemed to equal 99.75% multiplied by a
fraction, the numerator of which is the Certificate Principal Balance of such
Re-REMIC Certificate and the denominator of which is the aggregate Certificate
Principal Balance of all the Re-REMIC 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: With respect to any Mortgage Loan, any Realized Loss
attributable to fraud in the origination of such Mortgage Loan, as reported by
the applicable Servicer to the Master Servicer.

      Fraud Loss Amount: Upon the initial issuance of the Mortgage Pass-Through
Certificates, 1.00% of the aggregate Scheduled Principal Balances of the
Mortgage Loans. As of any Distribution Date prior to the first 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 third 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 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).

      Holder: The Person in whose name a Mortgage Pass-Through Certificate or
Re-REMIC Certificate is registered in the related 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 Mortgage Pass-Through
Certificate or Re-REMIC 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. With respect to the Class I-A-3 Certificates, Radian to the extent of
any Radian Reimbursement Amount.

      HSBC: HSBC Mortgage Corporation (USA), or its successor in interest.


                                     - 15 -
<PAGE>

      HSBC Servicing Agreement: With respect to the Mortgage Loans originated by
HSBC, the Purchase, Warranties and Servicing Agreement dated as of May 1, 2002
between the Seller and HSBC, attached hereto as Exhibit H-2 as modified by the
related Assignment Agreement.

      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.

      Indemnification Agreement: The Indemnification Agreement dated as of
January 28, 2005, among the Insurer, the Depositor, the Seller and Bear, Stearns
& Co. Inc.

      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.

      Individual Insured Certificate: An Insured Certificate that evidences
$1,000 initial Current Principal Amount.

      Initial Certificate Principal Balance: The aggregate principal balance of
any class of Re-REMIC Certificates on the Closing Date as set forth in Section
4.01 hereof.

      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.

      Insured Certificates: The Class I-A-3 Certificates.

      Insured Payment: (a) As of any Distribution Date, any Deficiency Amount
and (b) any Preference Amount.


                                     - 16 -
<PAGE>

      Insurer: Radian Asset Assurance Inc.

      Interest Accrual Period: For each Class of Mortgage Pass-Through
Certificates (other than the Class I-A-6 Certificates and Class I-A-7
Certificates) and each Class of Re-REMIC Certificate and for any Distribution
Date, the one-month period preceding the month in which such Distribution Date
occurs, commencing in January 2005. For the Class I-A-6 Certificates and Class
I-A-7 Certificates and any Distribution Date, the period beginning on the 25th
day of the month preceding the month in which the Distribution Date occurs (or
with respect to the first Interest Accrual Period, the Closing Date) and ending
on the 24th day of the month in which the Distribution Date occurs.

      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-4 Certificates and Class I-A-7
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) 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 Class I-B-4, Class I-B-5 or Class
I-B-6 Certificates in connection with such purchase, substantially in the form
set forth as Exhibit F-1 hereto.


                                     - 17 -
<PAGE>

      Issuer: Prime Mortgage Trust 2005-1.

      Lender-Paid PMI Rate: With respect to each Mortgage Loan covered by a
lender-paid primary mortgage insurance policy, the amount payable to the related
insurer, as stated in the Mortgage Loan Schedule.

      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 1.01.

      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 Servicer 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 and any Subsequent
Recoveries.

      Living Owner: A Certificate Owner of an Insured Certificate other than a
Deceased Holder.

      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.

      Lockout Certificates: The Class I-A-5 Certificates and Class I-A-8
Certificates.

      Lockout Percentage: On any Distribution Date occurring during the periods
set forth below will be as follows:

                  Period (dates inclusive)         Lockout Prepayment Percentage
            ------------------------------------   -----------------------------
            February 25, 2005 - January 25, 2010                0%
            February 25, 2010 - January 25, 2011                30%
            February 25, 2011 - January 25, 2012                40%
            February 25, 2012 - January 25, 2013                60%
            February 25, 2013 - January 25, 2014                80%
            February 25, 2014 and thereafter                   100%


                                     - 18 -
<PAGE>

      Lockout Principal Amount: For any Distribution Date, an amount equal to
the Lockout Percentage multiplied by the Lockout Pro Rata Optimal Principal
Amount.

      Lockout Pro Rata Optimal Principal Amount: With respect to any
Distribution Date, the product of (x) the Subgroup Principal Distribution Amount
for Subgroup 1 for such Distribution Date (without regard to the Subgroup Senior
Percentage for Subgroup 1 or the Subgroup Senior Prepayment Percentage for
Subgroup 1) multiplied by (y) a fraction, the numerator of which is the sum of
the Current Principal Amounts of the Class I-A-5 Certificates and Class I-A-8
Certificates immediately prior to such Distribution Date and the denominator of
which is the sum of the Non-PO Percentages of the Scheduled Principal Balances
of the Mortgage Loans in Subgroup 1.

      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.

      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, N.A. 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 the 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.


                                     - 19 -
<PAGE>

      Master Servicer Collection Account: The trust account or accounts created
and maintained pursuant to Section 4.02, which shall be denominated "JPMorgan
Chase Bank, N.A., as Trustee f/b/o holders of Structured Asset Mortgage
Investments II Inc., Prime Mortgage Trust, Mortgage Pass-Through Certificates,
Series 2005-1 - Master Servicer Collection Account." The Master Servicer
Collection Account shall be an Eligible Account.

      Master Servicing Compensation: The meaning specified in Section 3.14.

      Master Servicing Fee: As to each Mortgage Loan and any Distribution Date,
an amount payable out of each full payment of interest received on such Mortgage
Loan and equal to the sum of (i) one-twelfth of the Master Servicing Fee Rate
multiplied by the Scheduled Principal Balance of such Mortgage Loan as of the
first day of the related Due Period, subject to reduction as provided in Section
3.14.

      Master Servicing Fee Rate: With respect to each Mortgage Loan, 0.02% per
annum.

      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.

      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 6.06.

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

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

      Mortgage Fund: The portion of the Trust consisting of the assets described
in clauses (A)(i) through (ix) of Section 2.01(a).

      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.


                                     - 20 -
<PAGE>

      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. Notwithstanding any provision in this Agreement to the
contrary, in no event shall the term "Mortgage Loan" include any Underlying
Mortgage Loan.

      Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of January 28, 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.

      Mortgage Pass-Through Certificate: Any mortgage pass-through certificate
evidencing a beneficial ownership interest in the Mortgage 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.

      Mortgage Pass-Through Certificates Distribution Report: The report
prepared by the Securities Administrator with respect to the Mortgage
Pass-Through Certificates and the Mortgage Loans pursuant to Section 6.05(a).

      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. In no event, however, shall the term "Mortgaged
Property" include any mortgaged property or real estate owned property relating
to an Underlying Mortgage Loan.

      Mortgagor: The obligor on a Mortgage Note.

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

      Nat City Servicing Agreement: The Purchase, Warranties and Servicing
Agreement, dated as of October 1, 2001, between the Seller and Nat City,
attached hereto as Exhibit H-3, and as modified by the related Assignment
Agreement.


                                     - 21 -
<PAGE>

      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 Mortgage Loan with a Net Mortgage Rate
higher than 5.500% per annum.

      Non-PO Percentage: With respect to any Mortgage Loan with a Net Mortgage
Rate less than 5.500% per annum, a fraction, expressed as a percentage, (x) the
numerator of which is equal to the related Net Mortgage Rate, and (y) the
denominator of which is equal to 5.500% per annum.

      Nonrecoverable Advance: With respect to any Mortgage Loan, 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.

      Notice of Final Payment: With respect any Underlying Certificate, the
notice to be provided by the related trustee to the effect that the final
distribution on such class of Underlying Certificates is to be made on a
specified date only upon presentation and surrender thereof.

      Notional Amount: The Notional Amount of the Class I-A-4 Certificates, as
of any date of determination, is equal to the Current Principal Amount of the
Class I-A-3 Certificates. For federal income tax purposes, however, the Notional
Amount of the Class I-A-4 Certificates is the Uncertificated Principal Balance
of REMIC II Regular Interest I-A-3. The Notional Amount of the Class I-A-7
Certificates, as of any date of determination, is equal to the Current Principal
Amount of the Class I-A-6 Certificates. For federal income tax purposes,
however, the Notional Amount of the Class I-A-7 Certificates is the
Uncertificated Principal Balance of REMIC II Regular Interest I-A-6.

      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.


                                     - 22 -
<PAGE>

      Opinion of Counsel: A written opinion of counsel who is or are acceptable
to the Trustee, Radian 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 Mortgage Pass-Through Certificates,
Re-REMIC Certificates, the REMIC I Regular Interests and the REMIC II Regular
Interests, the rate of interest determined as provided with respect thereto, in
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 related
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;


                                     - 23 -
<PAGE>

            (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;

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


                                     - 24 -
<PAGE>

      Policy: The irrevocable Financial Guaranty Insurance Policy, No.
FANI-0528-05028-NY, including any endorsements thereto, issued by Radian with
respect to the Class I-A-3 Certificates, in the form attached hereto as Exhibit
K.

      PO Percentage: With respect to any Discount Mortgage Loan, a fraction
expressed as a percentage, (x) the numerator of which is equal to 5.500% minus
the related Net Mortgage Rate, and (y) the denominator of which is equal to
5.500% per annum.

      Preference Amount: Any amount previously distributed to Holders of the
Class I-A-3 Certificates that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with a
final nonappealable order of a court having competent jurisdiction.

      Premium Distribution Amount: As to any Distribution Date, an amount equal
to the sum of (i) the Premium Payment, subject to reduction pursuant to Section
6.03(i) and (ii) any Premium Unpaid Shortfall.

      Premium Payment: For any Distribution Date, the product of 1/12th of 0.07%
and the Current Principal Amount of the Class I-A-3 Certificates for such
Distribution Date prior to any distributions thereon.

      Premium Shortfall: For any Distribution Date, the amount by which the
Premium Payment (as reduced pursuant to Section 6.03(i) exceeds the amount of
premium actually distributed to Radian on such Distribution Date pursuant to
clause (i) of the definition of Premium Distribution Amount.

      Premium Unpaid Shortfall: As to any Distribution Date, the amount by which
the aggregate Premium Shortfalls on prior Distribution Dates exceeds the amount
of premium actually distributed to Radian on such prior Distribution Dates
pursuant to clause (ii) of the definition of Premium Distribution Amount.

      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 Distribution Date and the related
Servicer, such period as is provided in the related Servicing Agreement.

      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


                                     - 25 -
<PAGE>

Instrument, if any or any replacement policy therefor through the related
Interest Accrual Period for such Class relating to a Distribution Date.

      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 received at the time a Mortgage Loan becomes a Liquidated Mortgage
Loan.

      Private Certificates: The Class I-B-4, Class I-B-5, Class I-B-6, Class
II-A-1, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5 and Class II-R
Certificates.

      Protected Account: An account established and maintained for the benefit
of Holders of the Mortgage Pass-Through Certificates by each Servicer with
respect to the related Mortgage Loans and with respect to REO Property pursuant
to the applicable Servicing Agreement.

      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 related Mortgage Pass-Through
Certificates rated by the Rating Agencies as of the Closing Date.

      Radian: Radian Asset Assurance, an indirect wholly owned subsidiary of
Radian Group Inc., organized and created under the laws of the State of New
York, or any successor thereto.

      Radian Contact Person: The officer designated by the Master Servicer to
provide information to Radian pursuant to Section 6.08(i).

      Radian Default: As defined in Section 6.08(l).

      Radian Reimbursement Amount: Shall mean the sum of (a) the aggregate
unreimbursed amount of any payments made by Radian under the Policy, together
with interest on such amount from the date of payment by Radian until paid in
full, (b) all costs and expenses of Radian in connection with any action,
proceeding or investigation affecting the Trust Fund or the rights or
obligations of Radian under this Agreement or under the Policy, including any
judgment or settlement entered into affecting Radian or Radian's interests,
together with interest thereon and (c) any other amounts owed to Radian under
this Agreement or the Indemnification Agreement, together with interest thereon.


                                     - 26 -
<PAGE>

      Random Lot: With respect to any Distribution Date, the method by which the
Depository will determine which Insured Certificates will be paid, using its
established random lot procedures or, if the Insured Certificates are no longer
represented by a Book-Entry Certificate, using the Trustee's procedures.

      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. In addition, to the extent the Master Servicer receives Subsequent
Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss
with respect to that Mortgage Loan will be reduced to the extent such recoveries
are applied to reduce the Current Principal Amount of any class of Mortgage
Pass-Through Certificates on any Distribution Date.

      Record Date: With respect to any Distribution Date and any Class of
Certificates (other than the Class I-A-6 Certificates and Class I-A-7
Certificates), the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date. With respect to the
Class I-A-6 Certificates and Class I-A-7 Certificates, so long as such
Certificates are Book-Entry Certificates, the Business Day prior to such
Distribution Date, and otherwise, the close of business on the last Business Day
of the month immediately preceding the month of such Distribution Date..

      Regulation S: Regulation S promulgated under the Securities Act.

      Regulation S Global Certificates: The Regulation S Temporary Global
Certificates and the Regulation S Permanent Global Certificates.

      Regulation S Permanent Global Certificates: As defined in Section 5.09 (b)
hereof.

      Regulation S Temporary Global Certificates: As defined in Section 5.09(c)
hereof.

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

      Relief Act: The Servicemembers Civil Relief Act, formerly known as the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended, 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.


                                     - 27 -
<PAGE>

      REMIC I: That group of assets contained in the Trust Funds 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 the 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
Interest.

      REMIC I Regular Interests: REMIC I Regular Interests 1-A, 2-A, PO, 1-ZZZ,
2-ZZZ and R-I.

      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 Subgroup over (y) the Current Principal Amount
of the Senior Certificates in the related Subgroup.

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

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

      REMIC II Regular Interests: REMIC II Regular Interests I-A-1, I-A-2,
I-A-3, I-A-5, I-A-6, I-A-8, I-PO, R-II, I-B-1, I-B-2, I-B-3, I-B-4, I-B-5 and
I-B-6.

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

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

      REMIC III Regular Certificates: The Class I-A-1, Class I-A-2, Class I-A-3,
Class I-A-4 , Class I-A-5, Class I-A-6, Class I-A-7, Class I-A-8, Class I-PO,
Class I-B-1, Class I-B-2, Class I-B-3 , Class I-B-4, Class I-B-5 and Class I-B-6
Certificates.

      REMIC IV: That group of assets contained in the Trust Funds designated as
a REMIC consisting of, among other things, the Underlying 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.

      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.


                                     - 28 -
<PAGE>

      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.

      Re-REMIC Available Funds: As to any Distribution Date, the aggregate
amount on deposit in the Re-REMIC Certificate Account immediately prior to such
Distribution Date, net of; (i) any amounts reimbursable or payable to the
Trustee and the Securities Administrator as provided herein with respect to the
Underlying Certificates and Re-REMIC Certificates; and (ii) any distributions
received with respect to the Underlying Certificates after their repurchase by
the Depositor to the extent the distributions of such amounts would make the
total amount distributed in respect of any such repurchased Underlying
Certificates greater than the purchase price thereof. The Securities
Administrator shall determine the interest portion and principal portion of
Re-REMIC Available Funds based solely on information included on the Underlying
Certificates Payment Date Statements. To the extent the Underlying Certificates
Payment Date Statements are unclear or ambiguous with respect to any portion of
Re-REMIC Available Funds, the Securities Administrator shall treat that portion
as interest.

      Re-REMIC Certificates: Any of the Class II-A Certificates and Class II-R
Certificates.

      Re-REMIC Certificate Account: The trust account, which shall at all times
be an Eligible Account, created and maintained by the Trustee pursuant to
Section 4.06. Funds deposited in the Re-REMIC Certificate Account shall be held
in trust for the Re-REMIC Certificateholders for the uses and purposes set forth
in this Agreement.


                                     - 29 -
<PAGE>

      Re-REMIC Fund: The portion of the Trust consisting of the assets described
in clauses (B)(i) through (iv) of Section 2.01(a).

      Re-REMIC Lockout Certificates: The Class II-A-5 Certificates.

      Re-REMIC Lockout Principal Amount: For any Distribution Date occurring
prior to the Distribution Date in February 2010, zero. For any Distribution Date
occurring after the first five years following the Closing Date will be as
follows: for any Distribution Date during the sixth, seventh, eighth and ninth
years after the Closing Date, 30%, 40%, 60% and 80%, respectively, of an amount
equal to the product of (x) the principal portion of Re-REMIC Available Funds
for such Distribution Date multiplied by (y) a fraction, the numerator of which
is the Certificate Principal Balance of the Class II-A-5 Certificates
immediately prior to such Distribution Date and the denominator of which is the
Underlying Principal Balance of the Underlying Certificates immediately prior to
the Underlying Distribution Date.

      Re-REMIC Principal Distribution Amount: On any Distribution Date, the
aggregate amount of principal received with respect to the Underlying
Certificates.

      Reserve Fund: A fund established at the time of the issuance of the
Certificates solely for the benefit of the Class I-A-3 Certificates by an
initial deposit into the Reserve Fund of $20,000 by Bear, Stearns & Co. Inc.

      Reserve Interest Rate: With respect to any Interest Determination Date and
any Adjustable Rate Certificate, the rate per annum that the Securities
Administrator determines to be either (i) the arithmetic mean (rounded upwards
if necessary to the nearest whole multiple of 0.0625%) of the one-month United
States dollar lending rates which New York City banks selected by the Securities
Administrator are quoting on the relevant Interest Determination Date to the
principal London offices of leading banks in the London interbank market or (ii)
in the event that the Securities Administrator can determine no such arithmetic
mean, the lowest one-month United States dollar lending rate which New York City
banks selected by the Securities Administrator are quoting on such Interest
Determination Date to leading European banks.

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

      Rounding Account: With respect to the Insured Certificates, the account
created and maintained for such Insured Certificates pursuant to Section 6.10.

      Rounding Amount: With respect to the Rounding Account, the amount of
funds, if any, needed to be withdrawn and used to round the amount of any
distributions in reduction of the


                                     - 30 -
<PAGE>

Current Principal Amount of the Insured Certificates upward to the next higher
integral multiple of $1,000.

      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, a division of The McGraw-Hill Companies, Inc., and
its successors in interest.

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

      Scheduled Principal: The principal portion of any Scheduled Payment.

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

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

      Securities Administrator: Wells Fargo Bank, N.A., or its successor in
interest, or any successor securities administrator appointed as herein
provided.

      Securities Administration Fee: As to the Re-REMIC Certificates and any
Distribution Date, an amount payable out of amounts on deposit in the Re-REMIC
Certificate Account and equal to the sum of (i) one-twelfth of the Securities
Administration Fee Rate multiplied by the aggregate Certificate Principal
Balance of such Re-REMIC Certificates as of the related Distribution Date prior
to giving effect to any distributions of principal on such Distribution Date.

      Securities Administration Fee Rate: With respect to the Re-REMIC
Certificates, 0.02% per annum.

      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


                                     - 31 -
<PAGE>

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 [in the case of a Residual Certificate or a Class I-B-4,
Class I-B-5 and Class I-B-6 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 I-B-4, Class I-B-5 and Class I-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
FIDUCIARY DUTIES 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.


                                     - 32 -
<PAGE>

      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-A-5, Class I-A-6, Class I-A-7, Class I-A-8, Class I-PO and Class
I-R Certificates.

      Servicer: With respect to each Mortgage Loan, EMC, HSBC , Nat City and
U.S. Central. In no event, however, shall the term "Servicer" include any
servicer of any of the Underlying Mortgage Loans.

      Servicer Remittance Date: With respect to each Mortgage Loan, the date set
forth in the Servicing Agreement.

      Servicing Agreements: The EMC Servicing Agreement, HSBC Servicing
Agreement, Nat City Servicing Agreement and U.S. Central 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 and Radian.

      Special Hazard Loss: With respect to any Mortgage Loan, 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 Mortgage
Pass-Through Certificates, $2,049,289. 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.


                                     - 33 -
<PAGE>

      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).

      Startup Day: January 28, 2005.

      Subgroup: Any of Subgroup 1 and Subgroup 2.

      Subgroup 1: All of the Mortgage Loans with a Net Mortgage Rate of less
than or equal to 5.500% per annum, plus the Subgroup 1 Fraction of the principal
balance of any Mortgage Loan with a Net Mortgage Rate greater than 5.500% per
annum and less than 8.000% per annum.

      Subgroup 1 Certificates: The Class I-A-1, Class I-A-2, Class I-A-3, Class
I-A-4, Class I-A-5, Class I-A-8, Class I-PO and Class I-R Certificates.

      Subgroup 1 Fraction: With respect to any Mortgage Loan with a Net Mortgage
Rate of greater than 5.500% per annum and less than 8.000% per annum, a
fraction, (x) the numerator of which is equal to 8.000% minus the Net Mortgage
Rate of such Mortgage Loan, and (y) the denominator of which is equal to 2.500%
per annum.

      Subgroup 2: All of the Mortgage Loans with a Net Mortgage Rate equal to
8.000% per annum plus the Subgroup 2 Fraction of the principal balance of any
Mortgage Loan with a Net Mortgage Rate of greater than 5.500% per annum and less
than 8.000% per annum.

      Subgroup 2 Certificates: The Class I-A-6 Certificates and Class I-A-7
Certificates.

      Subgroup 2 Fraction: With respect to any Mortgage Loan with a Net Mortgage
Rate of greater than 5.500% per annum and less than 8.000% per annum, a
fraction, (x) the numerator of which is equal to the Net Mortgage Rate of such
Mortgage Loan minus 5.500% per annum, and (y) the denominator of which is equal
to 2.500% per annum.

      Subgroup Principal Distribution Amount: With respect to each of Subgroup 1
and Subgroup 2 Certificates and each Distribution Date will be an amount equal
to the sum of the following (but in no event greater than the aggregate Current
Principal Amounts of each of the Subgroup 1 and Subgroup 2 Certificates, as
applicable, immediately prior to such Distribution Date):

            (1) the applicable Subgroup Senior Percentage of the Non-PO
      Percentage of the principal portion of all Scheduled Payments due on the
      Mortgage Loans in the related Subgroup 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
      adjustments to such amortization schedule by reason of any bankruptcy or
      similar proceeding or any moratorium or similar waiver or grace period);

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


                                     - 34 -
<PAGE>

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

            (4) the lesser of (a) the applicable Subgroup Senior Prepayment
      Percentage of the Non-PO Percentage of the sum of (i) all Net Liquidation
      Proceeds allocable to principal received in respect of each Mortgage Loan
      in the related Subgroup which became a Liquidated Mortgage Loan during the
      related Prepayment Period (other than Mortgage Loans described in the
      immediately following clause (ii)) and all Subsequent Recoveries received
      in respect of each Liquidated Mortgage Loan in the related Subgroup during
      the related Due Period and (ii) the Scheduled Principal Balance of each
      such Mortgage Loan in the related Subgroup 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 Subgroup Senior Percentage of the Non-PO Percentage of the sum
      of (i) the Scheduled Principal Balance of each Mortgage Loan in the
      related Subgroup which became a Liquidated Mortgage Loan during the
      related Prepayment Period (other than the Mortgage Loans described in the
      immediately following clause (ii)) and all Subsequent Recoveries received
      in respect of each Liquidated Mortgage Loan in the related Subgroup during
      the related Due Period and (ii) the Scheduled Principal Balance of each
      such Mortgage Loan in the related Subgroup 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

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

      Subgroup Senior Percentage: With respect to each Subgroup, the lesser of
(a) 100% and (b) the percentage (carried to six places rounded up) obtained by
dividing the Current Principal Amount of the Senior Certificates of such
Subgroup (other than any Principal Only Certificates), immediately prior to such
Distribution Date, by the aggregate Scheduled Principal Balance of the Mortgage
Loans in the related Subgroup (other than the I-PO Percentage thereof with
respect to the related Discount Mortgage Loans) as of the beginning of the
related Due Period. The initial Subgroup Senior Percentage for the Senior
Certificates will be approximately 96.72%.

      Subgroup Senior Prepayment Percentage: The Subgroup Senior Prepayment
Percentage for the Subgroup 1 and Subgroup 2 Certificates, on any Distribution
Date occurring during the periods set forth below will be as follows:

                                     - 35 -
<PAGE>
<TABLE>
<CAPTION>
     Period (dates inclusive)                   Subgroup Senior Prepayment Percentage
------------------------------------     ---------------------------------------------------
<S>                                      <C>
February 25, 2005 - January 25, 2010     100%
February 25, 2010 - January 25, 2011     Subgroup Senior Percentage for the related Subgroup
                                         Certificates plus 70% of the related Subordinate
                                         Percentage
February 25, 2011 - January 25, 2012     Subgroup Senior Percentage for the related Subgroup
                                         Certificates plus 60% of the related Subordinate
                                         Percentage
February 25, 2012 - January 25, 2013     Subgroup Senior Percentage for the related Subgroup
                                         Certificates plus 40% of the related Subordinate
                                         Percentage
February 25, 2013 - January 25, 2014     Subgroup Senior Percentage for the related Subgroup
                                         Certificates plus 20% of the related Subordinate
                                         Percentage
February 25, 2014 and thereafter         Subgroup Senior Percentage for the related Subgroup
                                         Certificates
</TABLE>

      Any scheduled reduction to the Subgroup Senior Prepayment Percentage for
the Subgroup 1 and Subgroup 2 Certificates shall not be made as of any
Distribution Date unless, as of the last day of the month preceding such
Distribution Date (1) the aggregate Scheduled Principal Balance of the Mortgage
Loans delinquent 60 days or more (including for this purpose any such Mortgage
Loans in foreclosure and such Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust) averaged over the last six
months, as a percentage of the aggregate Current Principal Amount of the
Subordinate Certificates does not exceed 50% and (2) cumulative Realized Losses
on the Mortgage Loans do not exceed (a) 30% of the aggregate Current Principal
Amount of the Original Subordinate Principal Balance if such Distribution Date
occurs between and including February 2010 and January 2011, (b) 35% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including February 2011 and January 2012, (c) 40% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including February 2012 and January 2013, (d) 45% of the Original Subordinate
Principal Balance if such Distribution Date occurs between and including
February 2013 and January 2014, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after February
2014.

      Notwithstanding the foregoing, if on any Distribution Date, the percentage
for Subgroup 1 or Subgroup 2, the numerator of which is the aggregate Current
Principal Amount of the Senior Certificates of such Subgroup immediately
preceding such Distribution Date, and the denominator of which is the Scheduled
Principal Balance of the Mortgage Loans in such Subgroup (other than the I-PO
Percentage thereof with respect to the Discount Mortgage Loans) as of the
beginning of the related Due Period, exceeds such percentage as of the Cut-off
Date, then the Subgroup Senior Prepayment Percentage with respect to the Senior
Certificates of each Subgroup for such Distribution Date will equal 100%.

      Subordinate Certificates: The Class I-B-1, Class I-B-2, Class I-B-3, Class
I-B-4, Class I-B-5 and Class I-B-6 Certificates.

      Subordinate Certificate Writedown Amount: As to any Distribution Date, the
amount by which (a) the sum of the Current Principal Amounts of all the Mortgage
Pass-Through 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 Mortgage Pass-Through


                                     - 36 -
<PAGE>

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 from each
Subgroup (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 Subgroup 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 Subgroup 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 Subgroup;

            (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 Subgroup
            over (b) the sum of the amounts distributable to the related Senior
            Certificateholders pursuant to clause (4) of the definition of
            Subgroup Principal Distribution Amount and Class I-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 Subgroup 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 Subgroup 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; and

            (vi) on the Distribution Date on which the Current Principal Amounts
            of the related Senior Certificates (other than the Interest Only
            Certificates and Class I-PO Certificates), have all been reduced to
            zero, 100% of the related Subgroup Principal Distribution Amount.
            After the aggregate Current Principal Amount of the Subordinate
            Certificates has been reduced to zero, the Subordinate Optimal
            Principal Amount shall be zero.


                                     - 37 -
<PAGE>

      Subordinate Percentage: As of any Distribution Date and with respect to
any Subgroup, 100% minus the related Subgroup Senior Percentage for the Senior
Certificates related to such Subgroup. The initial Subordinate Percentage for
each Subgroup will be equal to approximately 3.28%.

      Subordinate Prepayment Percentage: As of any Distribution Date and with
respect to any Subgroup, 100% minus the related Subgroup Senior Prepayment
Percentage for such Subgroup, except that on any Distribution Date after the
Current Principal Amount of each class of Senior Certificates have each been
reduced to zero, the Subordinate Prepayment Percentage for the Subordinate
Certificates with respect to such Subgroup will equal 100%.

      Subsequent Recoveries: As of any Distribution Date, amounts received by
the related Servicer during the related Due Period or surplus amounts held by
the related Servicer to cover estimated expenses (including, but not limited to,
recoveries in respect of the representations and warranties made by the Seller
pursuant to the Mortgage Loan Purchase Agreement) specifically related to a
Liquidated Mortgage Loan or disposition of an REO Property prior to the related
Prepayment Period that resulted in a Realized Loss, after the liquidation or
disposition of such Mortgage Loan.

      Substitute Mortgage Loan: A mortgage loan tendered to the Trustee pursuant
to the 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.

      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.

      Trust Funds or Trusts: The corpus of the trusts created by this Agreement,
consisting of the Mortgage Loans, the Underlying Certificates and the other
assets described in Section 2.01(a), and which constitute two separate and
distinct trust funds: the Mortgage Fund and the Re-REMIC Fund.

      Trustee: JPMorgan Chase Bank, N.A., or its successor in interest, or any
successor trustee appointed as herein provided.


                                     - 38 -
<PAGE>

      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 Documents: Collective reference to the pooling and servicing
agreement, prospectus supplement or other comparable documents relating to the
issuance of the Underlying Certificates.

      Underlying Mortgage Loans: The mortgage loans underlying the Underlying
Certificates.

      Underlying Certificates: 99.247% percentage interest in the GS Mortgage
Securities Corp., Mortgage Pass-Through Certificates, Series 2004-8F, Class IA-1
Certificates.

      Underlying Certificates Balance: With respect to the Underlying
Certificates as of any Underlying Certificates Payment Date and as of any date
of determination thereafter until the next succeeding Underlying Certificates
Payment Date, the outstanding principal balance of such Underlying Certificates
as set forth in, or calculated in accordance with the terms of the Underlying
Documents on the basis of, the Underlying Certificates Payment Date Statement
sent to the Trustee as Underlying Certificateholder relating to such Underlying
Certificates Payment Date. The Underlying Certificates Balance of the Underlying
Certificates as of any Underlying Certificates Payment Date (and as of any date
thereafter until the next succeeding Underlying Certificates Payment Date) shall
reflect the payment of principal, if any, and allocation of realized losses, if
any, on such Underlying Certificates Payment Date with respect to the Underlying
Certificates.

      Underlying Certificates Payment Date: With respect to the Underlying
Certificates, the date on which payments are distributed on such certificate.

      Underlying Certificates Payment Date Statement: With respect to the
Underlying Certificates, the monthly statement forwarded to the holder thereof
with respect to such Underlying Certificates Payment Date as provided by the
related Underlying Document for each of the Underlying Certificates.

      Underlying Certificates Schedule: The schedule attached as Exhibit C
hereto identifying the Underlying Certificates.

      Underlying Certificateholder: The registered holder of the Underlying
Certificates, which following the execution and delivery of this Agreement by
the parties hereto, shall be the Trustee, or a financial intermediary on its
behalf.

      Underlying Principal Balance: The principal balance of the Underlying
Certificates.

      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


                                     - 39 -
<PAGE>

is not fully reimbursable by the hazard insurance policies required to be
maintained pursuant the Servicing Agreement, without regard to whether or not
such policy is maintained.

      U.S. Central: U.S. Central Credit Union.

      U.S. Central Servicing Agreement: The Purchase, Warranties and Servicing
Agreement, dated as of June 1, 2002, between the Seller and U.S. Central, as
amended by Amendment No. 1 to the Purchase, Warranties and Servicing Agreement
dated as of January 13, 2003 and the Letter Agreement dated as of November 13,
2003 between U.S. Central and EMC attached hereto as Exhibit H-5 and as modified
by the related Assignment Agreement.

      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 Treasury
regulations), provided that, for purposes solely of the Class I-R Certificates
and Class II-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.


                                     - 40 -
<PAGE>

      Section 1.01 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 e 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.


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<PAGE>

                                   ARTICLE II

       Conveyance of Mortgage Loans and Underlying Certificates; Original
    Issuance of Mortgage Pass-Through Certificates and Re-REMIC Certificates

      Section 2.01 Conveyance of Mortgage Loans and Underlying Certificates to
Trustee.

      (a) The Depositor concurrently with the execution and delivery of this
Agreement, sells, transfers and assigns to each Trust without recourse (A) with
respect to the Mortgage Fund, 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 the 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 Agreement as assigned to the Trustee on behalf of the
related Certificateholders by the Assignment Agreement, (viii) the Policy, the
Class I-A-3 Policy Payments Account, the Rounding Account and the Reserve Fund
and (ix) all proceeds of the foregoing; and (B) with respect to the Re-REMIC
Fund, all its right, title and interest in and to (i) all distributions on the
Underlying Certificates after the Underlying Certificates Payment Date in
January 2005, (ii) all the right, title and interest of the Depositor in and to
the Underlying Certificates, (iii) such assets relating to the Underlying
Certificate as from time to time may be held by the Trustee in the Re-REMIC
Certificate Account, and (iv) 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 the Underlying
Certificates and other assets in the Trust Funds 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 the Underlying
Certificates and other assets in the Trust Fund, and that this Agreement shall
constitute a security agreement under applicable law. Moreover, if for any other
reason this Agreement is held or deemed to create a security interest in the
Mortgage Loans or Underlying Certificates and the other assets constituting the
Trust Funds, then it is intended as follows: (a) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
Uniform Commercial Code; (b) the conveyance provided for in this Section shall
be deemed to be a grant by the Depositor to the Trustee of a security interest
in all of the Depositor's right, title and interest in and to the Mortgage Loans
and Underlying Certificates and all amounts payable to the holders of the
Underlying Certificates after the Closing Date 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, including
without limitation all amounts from time to time held or invested in the
Distribution Account and Re-REMIC Certificate Account, whether


                                     - 42 -
<PAGE>

in the form of cash, instruments, securities or other property; (c) the
possession by the Trustee or its agent of the Mortgage Loans and Underlying
Certificates 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 9-305 of the Uniform Commercial Code; (d) the Trustee shall be the
"securities intermediary," as such term is defined in Section 8-102(a)(14)(ii)
of the New York Uniform Commercial Code, that in the ordinary course of its
business maintains "securities accounts" for others, as such term is used in
Section 8-501 of the New York Uniform Commercial Code; (e) the Re-REMIC
Certificate Account shall be a "securities account", as such term is used in
Section 8-501(a) of the New York Uniform Commercial Code; (e) the "securities
intermediary's jurisdiction" as defined in the New York Uniform Commercial Code
shall be the State of New York; (f) the Trustee is not a "clearing corporation",
as such term is defined in Section 8-102(a)(5) of the New York Uniform
Commercial Code and (g) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed to be notifications to or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. The Depositor, the Master Servicer, the Seller and the Trustee
agree that it is not intended that any mortgage loan be conveyed to the Trust
that is either (i) a "High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act effective November 27, 2003, (ii) a "High-Cost Home Loan" as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004
(iii) a "High Cost Home Mortgage Loan" as defined in the Massachusetts Predatory
Home Loan Practices Act effective November 7, 2004 or (iv) a "High-Cost Home
Loan" as defined by the Indiana High Cost Home Loan Law effective Jan 1, 2005.

      (b) In connection with the above transfer and assignment, the Depositor
hereby delivers to the Custodian, as agent for the Trustee, with respect to each
Mortgage Loan (other than a Cooperative Loan):

            (i) the original Mortgage Note, endorsed without recourse (a) to the
order of the Trustee or (b) in the case of a Mortgage Loan registered on the
MERS system, endorsed in blank, in either case 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 "JPMorgan Chase
Bank, N.A., 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


                                     - 43 -
<PAGE>

related Mortgaged Property is located in a state other than Maryland or an
Opinion of Counsel has been provided as set forth in this Section 2.01(b), shall
be in recordable form);

            (iv) all intervening assignments of the Security Instrument, if
applicable and only to the extent available to the 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


                                     - 44 -
<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
originator or 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 and Radian has
been provided to the Trustee (with a copy to the Custodian) and Radian which
states that recordation of such Security Instrument is not required to protect
the interests of the related 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 Mortgage Pass-Through Certificates evidencing Fractional Undivided
Interests aggregating not less than 25% of the Mortgage Fund, (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.


                                     - 45 -
<PAGE>

      (c) In connection with such transfer and assignment, with respect to the
Underlying Certificates, the Depositor is concurrently herewith:

            (i) causing the delivery of the Underlying Certificates to the
Trustee together with powers to the Trustee sufficient to cause the transfer
thereof to the Trustee;

            (ii) delivering all documents required to be executed or furnished
by a transferee and transferor of the Underlying Certificates under each of the
related Underlying Documents other than any transferor and transferee letters;

            (iii) delivering copies of the Underlying Documents on CD-ROM;

            (iv) delivering a copy of the offering documents with respect to the
Underlying Certificates on CD-ROM; and

            (v) delivering copies of the most recent Aggregate Collateral
Reports and Underlying Certificates Payment Date Statements delivered to the
holders of the Underlying Certificates on CD-ROM .

      (d) The Trustee is hereby authorized and directed to execute such
documentation as may be required to permit the transfer to the Re-REMIC Fund of
the Underlying Certificates.

      Section 2.02 Acceptance of Mortgage Loans and Underlying Certificates by
Trustee.

      (a) The Trustee acknowledges the sale, transfer and assignment of the
Trust Funds to it by the Depositor and receipt of, subject to further review and
the exceptions which may be noted pursuant to the procedures described below,
and declares that it holds, the documents (or certified copies thereof)
delivered to the Custodian, as its agent, pursuant to Section 2.01(b), and
declares that it will continue to hold those documents and any amendments,
replacements or supplements thereto and all other assets of the Trust Funds
delivered to it as Trustee in trust for the use and benefit of all present and
future Holders of the related Certificates and Radian, as applicable. 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,
Radian 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
related Certificateholders and Radian, 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, Radian 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


                                     - 46 -
<PAGE>

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 defect within ninety (90) days from the
date of notice from the Trustee or the Custodian, as its agent, of the defect
and if the Seller fails to correct or cure the defect within such period, and
such defect materially and adversely affects the interests of the related
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 defect would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered; provided, however, that if such defect
relates solely to the inability of the 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.

      (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
and Radian, the Mortgage Files delivered to it and will execute and deliver or
cause to be executed and delivered to the Depositor, Radian 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 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 defect within such period, and if such defect materially and
adversely affects the interests of the related 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


                                     - 47 -
<PAGE>

the Closing Date) or purchase such Mortgage Loan at the Repurchase Price,
provided that, if such defect would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such
cure, 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 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,
the Trustee and Radian 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 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 immediately 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 Trustee, to reflect such repurchase and
shall promptly notify the Rating Agencies, Radian 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 defect in a
constituent document exists shall be the sole remedy respecting such defect
available to the related Certificateholders and Radian or to the Trustee on
their behalf.

      (d) The Trustee hereby acknowledges the receipt by it of the Underlying
Certificates and the documents and instruments referred to in Section
2.01(c)(i)-(v), and declares that it holds and will hold such Underlying
Certificates, such other documents and instruments, and all other assets and
documents included in the Trust Fund, in trust, upon the trusts herein set
forth, for the exclusive use and benefit of all present and future
Certificateholders of the Re-REMIC Certificates in accordance with the terms of
this Agreement.


                                     - 48 -
<PAGE>

      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 of the Mortgage Pass-Through Certificates, 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 (noting that the Seller has retained the right in the event of breach
of the representations, warranties and covenants, if any, with respect to the
related Mortgage Loans of the related Servicer under the related Servicing
Agreement to enforce the provisions thereof and to seek all or any available
remedies). The obligations of the Seller to substitute or repurchase, as
applicable, a Mortgage Loan shall be the Trustee's and the related
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, the related
Certificateholders of the Mortgage Pass-Through Certificates and Radian 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 related 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 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, Radian 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


                                     - 49 -
<PAGE>

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 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


                                     - 50 -
<PAGE>

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, Radian and the Rating Agencies.

      Section 2.05 Issuance of Certificates.

      (a) The Trustee acknowledges the assignment to it of the Mortgage Loans,
the Underlying Certificates and the other assets comprising the Trust Funds and,
concurrently therewith, has signed, and countersigned and delivered to the
Depositor, in exchange therefor, each of the Mortgage Pass-Through Certificates
and Re-REMIC 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 Underlying Certificates 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 related 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.

      (d) 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 Underlying Certificates, and the other assets of REMIC IV for the
benefit of the holders of the Re-REMIC Certificates. The Trustee acknowledges
receipt of the Underlying Certificates and the other assets of REMIC IV and
declares that it holds and will hold the same in trust for the exclusive use and
benefit of the holders of the Re-REMIC Certificates.


                                     - 51 -
<PAGE>

      Section 2.06 Representations and Warranties Concerning the Depositor.

      (a) 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 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


                                     - 52 -
<PAGE>

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.

      (b) The Depositor hereby represents and warrants to the Trustee as of the
Closing Date as follows:

            (viii) The information set forth in the Underlying Certificates
Schedule is true and correct in all material respects as of the date or dates
such information is furnished.

            (ix) Immediately prior to the sale and assignment herein
contemplated, the Depositor was the sole owner of the Underlying Certificates
free and clear of any lien, pledge, charge or encumbrance of any kind.

            (x) The Depositor has acquired its ownership in the Underlying
Certificates in good faith without notice of any adverse claim.

            (xi) The Depositor has not assigned any interest in the Underlying
Certificates or any distributions thereon, except as contemplated herein.

      The representations and warranties set forth in this Section 2.06(b) shall
survive the transfer and assignment of the Underlying Certificates. Upon
discovery by the Depositor or the Trustee of a breach of any of the foregoing
representations and warranties which materially and adversely affects the
interests of the Certificateholders in the affected Underlying Certificates, the
Depositor or the Trustee shall give prompt written notice to the other and to
the Certificateholders. Within 90 days of its discovery or its receipt of notice
of breach, the Depositor shall cure such breach in all material respects or, if
such breach cannot be cured, the Depositor shall repurchase from the Trustee the
Underlying Certificates as to which such breach exists if the Depositor is so
directed by the Holders of the Re-REMIC Certificates evidencing Fractional
Undivided Interests aggregating not less than 51% of the principal of the
Re-REMIC Fund. Any such repurchase of an Underlying Certificate by the Depositor
shall be accomplished prior to the related Underlying Certificates Payment Date
in any calendar month at a price equal to the fair market value thereof
determined by the Trustee (at the expense of the Depositor) on the basis of the
highest bid received from a dealer active in the market for comparable
securities (which may be an affiliate of the Depositor) which stands ready to
purchase such Underlying Certificates at its bid price therefor following
solicitation by the Trustee of such bids from at least three such dealers. The
payment of the purchase price in connection with a repurchased Underlying
Certificate shall be considered a prepayment in full of such Underlying
Certificate and shall be delivered to the Trustee for deposit in the Re-REMIC
Certificate Account in accordance with the provisions of Section 4.06 hereof.
Upon deposit of such sums into the Re-REMIC Certificate Account, or substitution
for an Underlying Certificate as described below, such Underlying Certificate
shall be released to the Depositor, and the Trustee shall execute and


                                     - 53 -
<PAGE>

deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty as shall be reasonably requested and
provided by the Depositor to vest in the Depositor, or its designee or assignee,
title to the Underlying Certificate repurchased pursuant hereto.


                                     - 54 -
<PAGE>

                                  ARTICLE III
        Administration of the Trust Fund and Servicing of Mortgage Loans

      Section 3.01 Master Servicer and Securities Administrator.

      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 6.05(a), 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.

      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. The Trustee shall be
indemnified by the Master Servicer for any costs, liabilities or expenses
incurred by it in connection with such powers of attorney.

      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 related Certificateholders, Radian, 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


                                     - 55 -
<PAGE>

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.

      To the extent timely received by the Trustee, the Trustee agrees to
furnish to the Securities Administrator, no later than three Business Days prior
to each Distribution Date, the Underlying Certificates Payment Date Statement
and the Aggregate Collateral Report for the related Underlying Distribution
Date. In connection with its receipt of any payment on the Underlying
Certificates on any Underlying Certificates Payment Date, the Trustee shall
review the related Underlying Certificates Payment Date Statements and shall
confirm that the principal and interest payments received on such Underlying
Certificates Payment Date are equal to the amounts shown on the related
Underlying Certificates Payment Date Statements. If (i) the amount of any
payment on the Underlying Certificates varies from the amount reported to the
Trustee on the applicable Underlying Certificates Payment Date Statement for
such payment, (ii) the Trustee shall not have received a payment on the
Underlying Certificates by the close of business on the date on which such
payment was to be received by the Trustee or (iii) the Trustee shall gain actual
knowledge of any other default or event of default under and as defined in the
related Underlying Document, the Trustee shall promptly notify the Depositor and
the related Certificateholders (and, in the case of clauses (i) and (ii), the
Securities Administrator) as to which situation in clauses (i), (ii) or (iii)
exists, and shall proceed in accordance with the provisions of Section 11.14.

      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 permit the sale of all or any portion of the Mortgage Loans, the
Underlying Mortgage Loans or the Underlying Certificates 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 and Radian has received
a REMIC Opinion addressed to the Trustee and Radian prepared at the expense of
the related 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 and Radian.

      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


                                     - 56 -
<PAGE>

constitute grounds for such termination, the Master Servicer shall notify the
Depositor, Radian and the Trustee thereof in writing. Pursuant to its receipt of
such notification from the Master Servicer, the Trustee shall issue such notice
of termination to the Servicer or take such other action as it deems
appropriate.

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

      (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


                                     - 57 -
<PAGE>

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 Holders of the Mortgage Pass-Through
Certificates 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, Liquidation Proceeds and Subsequent Recoveries,
and (iv) to effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Mortgage Loan, in each case, in accordance with
the provisions of this Agreement and the related Servicing Agreement, as
applicable; 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 related
REMIC to fail to qualify as a REMIC or result in the imposition of a tax upon
the Trust Funds (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 and
Radian have 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 related Servicing Agreement and this Agreement, and the
Trustee shall execute and deliver such other documents, as the Master Servicer
may request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer or
any Servicer). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 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.


                                     - 58 -
<PAGE>

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

      (b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with the applicable Servicing Agreement,
the Trustee shall execute such 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. Such trust receipt shall
obligate the Servicer or the Master Servicer to return the Mortgage File to the
Custodian on behalf of the


                                     - 59 -
<PAGE>

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,
Insurance Proceeds or Subsequent Recoveries in respect of any Mortgage Loan
shall be held for the benefit of the Trustee and the related Certificateholders
subject to the Master Servicer's right to retain or withdraw from the Master
Servicer Collection Account the Master Servicing Compensation and other amounts
provided in this Agreement, and to the right of each Servicer to retain its
Servicing Fee and other amounts as provided in the applicable Servicing
Agreement. The Master Servicer shall, and (to the extent provided in the
applicable Servicing Agreement) shall cause each Servicer to, provide access to
information and documentation regarding the Mortgage Loans to the Trustee, its
agents and accountants at any time upon reasonable request and during normal
business hours, Radian and to related 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,
Insurance Proceeds or Subsequent Recoveries, shall be held by the Master
Servicer for and on behalf of the Trustee, Radian and the related
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


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<PAGE>

provisions of the related Servicing Agreements. It is understood and agreed that
such insurance shall be with insurers meeting the eligibility requirements set
forth in the applicable Servicing Agreement and that no earthquake or other
additional insurance is to be required of any Mortgagor or to be maintained on
property acquired in respect of a defaulted loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.

      (b) Pursuant to Section 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, or by any Servicer, under any insurance
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into the
Master Servicer Collection Account, subject to withdrawal pursuant to Section
4.02 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, Radian and the Certificateholders all claims under the Insurance
Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to a Servicer and remitted to the Master Servicer) in
respect of such policies, bonds or contracts shall be promptly deposited in the
Master Servicer Collection Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property as a condition precedent to the presentation of claims on the
related Mortgage Loan to the insurer under any applicable Insurance Policy need
not be so deposited (or remitted).

      Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.

      (a) The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of 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


                                     - 61 -
<PAGE>

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, Radian 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.

      Section 3.13 Realization Upon Defaulted Mortgage Loans.

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

      Section 3.14 Compensation for the Master Servicer.

      The Master Servicer will be entitled to (i) the Master Servicing Fee;
provided, that the aggregate Master Servicing Fee with respect to any
Distribution Date shall be reduced by an amount equal to the Compensating
Interest payable by the Master Servicer for such Distribution Date pursuant to
Section 6.07 hereof, plus (ii) 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


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<PAGE>

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.

      Section 3.15 REO Property.

      (a) In the event the Mortgage 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 and Radian. 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, Radian and the
Rating Agencies on or before March 1 of each year, commencing on March 1, 2006,
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


                                     - 63 -
<PAGE>

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 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, Radian, the Rating Agencies
and the Depositor on or before March 1 of each year, commencing on March 1, 2006
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 but only if the Master Servicer has provided the Trustee with 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 (or other
comparable form containing the comparable information or other information
mutually agreed upon) with a copy of Mortgage


                                     - 64 -
<PAGE>

Pass-Through Certificate Distribution Report 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 Mortgage Fund,
if applicable. Prior to (i) March 15, 2006 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 of each Servicer (or, in the case of U.S. Central,
its sub-servicers) and annual statement of compliance of each Servicer (and, in
the case of U.S. Central, its sub-servicers), 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. Prior to (i) March 31, 2006, 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 Mortgage Fund. 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
Mortgage 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 Mortgage 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. Notwithstanding any
provision of the Agreement to the contrary, the duties and responsibilities of
the Securities Administrator and the Master Servicer under this Section 3.18
with respect to the preparation, execution and filing of annual and periodic
reports to the Commission and the Master Servicer Certification shall be deemed
to apply only to the portion of the Trust consisting of the Mortgage Fund and
the Mortgage Pass-Through Certificates, and the "issuer" or "issuing entity" for
purposes of all such reports shall be deemed to be the Mortgage Fund. In no
event shall the Securities Administrator, the Master Servicer or the Trustee
have any duty or responsibility to provide any information to the Commission
with respect to the Re-REMIC Fund, the Re-REMIC Certificates, the Underlying
Certificates, the Underlying Mortgage Loans or the servicing of the Underlying
Mortgage Loans, nor shall the Securities Administrator, the Master Servicer or
the Trustee have any obligation for, or incur any liability to any Person,
including the Seller, the Depositor or any Certificateholder, in respect of, any
failure to provide any information or report to the Commission with respect to
the Re-REMIC Fund; provided, however, for purposes of clarity, the Depositor and
the Seller agree that no such report or filing is required with respect to the
issuance of the Re-REMIC Certificates.


                                     - 65 -
<PAGE>

      Each of the Securities Administrator and the Master Servicer and their
respective officers, directors, agents and employee shall be indemnified and
held harmless by Bear, Stearns & Co. Inc. of any loss, liability, cost, expense,
disbursement or advance (including, without limitation, any legal fees and
expenses) arising out of or resulting from the omission in any report or any
Master Servicer Certification filed with the Commission of any information
relating to the Re-REMIC Fund, including, without limitation, any information
relating to distributions on the Re-REMIC Certificates or the Underlying
Certificates, the Underlying Mortgage Loans or the servicing thereof; provided,
however, for purposes of clarity, the Depositor and the Seller agree that no
such report or filing is required with respect to the issuance of the Re-REMIC
Certificates.

      Section 3.19 [Reserved].

      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. If directed by the Depositor in writing, the Trustee will file any
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
Fiscal 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
Fiscal 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 Fiscal Quarter.

      (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.


                                     - 66 -
<PAGE>

                                   ARTICLE IV
                                    Accounts

      Section 4.01 Protected Account.

      (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, Subsequent Recoveries 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 Holders of the Mortgage Pass-Through
Certificates and Radian.

      (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 Holders of the Mortgage Pass-Through
Certificates 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 Holders of the Mortgage
Pass-Through Certificates 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
Holders of the Mortgage Pass-Through Certificates.

      (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;


                                     - 67 -
<PAGE>

            (ii) Full Principal Prepayments and any Liquidation Proceeds or
Subsequent Recoveries 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 the Mortgage Fund 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 Holders of the Mortgage Pass-Through
Certificates and Radian, 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 or
Subsequent Recoveries 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


                                     - 68 -
<PAGE>

            (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.

      (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 and Radian 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 Holders of the Mortgage Pass-Through Certificates, 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
Collection Account. The risk of loss of moneys required to be distributed to the
Holders of the Mortgage Pass-Through Certificates 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, 7.03 and


                                     - 69 -
<PAGE>

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).

      (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 related Certificateholders and Radian, 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 related
Certificateholders and Radian 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 related Certificateholders shall be entitled to the
priorities afforded to such a trust account (in addition to


                                     - 70 -
<PAGE>

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

            (i) to reimburse the Master Servicer or any Servicer for any Monthly
Advance of its own funds, 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, Liquidation Proceeds and Subsequent Recoveries)
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 (xi) of this Subsection 4.03 (a) to the Master Servicer; and (ii) such
Liquidation Expenses were not included in the computation of such Excess
Liquidation Proceeds;

            (iv) to 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, Liquidation Proceeds and
Subsequent Recoveries) 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


                                     - 71 -
<PAGE>

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;

            (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 and Radian in accordance with written distribution instructions
provided to it by the Securities Administrator no later than two Business Days
prior to such Distribution Date and determined by the Securities Administrator
in accordance with Section 6.01.

      Section 4.06 Re-REMIC Certificate Account.

      (a) The Trustee, for the benefit of the Re-REMIC Certificateholders, shall
establish and maintain an account (the "Re-REMIC Certificate Account") which
shall be an Eligible Account, entitled "JPMorgan Chase Bank, N.A., in trust for
the registered holders of Prime Mortgage Trust, Re-REMIC Certificates, Series
Prime 2005-1". The Trustee shall upon receipt deposit in the Re-REMIC
Certificate Account the following payments and collections in respect of the
Underlying Certificates:

            (i) all payments received on the Underlying Certificates commencing
with the Underlying Certificates Payment Date in February 2005;


                                     - 72 -
<PAGE>

            (ii) any amount required to be deposited in the Re-REMIC Certificate
Account pursuant to Section 2.06(b) hereof in connection with the repurchase of
an Underlying Certificate by the Depositor;

            (iii) any amounts received in connection with the final payment on
the Underlying Certificates on a Final Securities Payment Date pursuant to
Section 10.02; and

            (iv) all monies received in connection with a liquidation through
auction and/or sale of the Underlying Certificates pursuant to Section 10.02
hereof;

The foregoing requirements for deposit in the Re-REMIC Certificate Account shall
be exclusive.

      (b) All amounts on deposit in the Re-REMIC Certificate Account will be
held uninvested.

      (c) Upon its receipt of a Notice of Final Payment, the Trustee shall, if
such Underlying Certificates are then in physical form, present and surrender
the related Underlying Certificates to which such notice applies for final
payment thereon or take such other action as is required to receive payment in
accordance with the terms and conditions of the related Underlying Document and
such Notice of Final Payment. The Trustee shall promptly deposit in the Re-REMIC
Certificate Account the final distribution received upon presentation and
surrender of, or otherwise with respect to, the Underlying Certificates.

      Section 4.07 Permitted Withdrawals From the Re-REMIC Certificate Account.

      The Trustee may from time to time withdraw funds from the Re-REMIC
Certificate Account for the following purposes:

            (i) to pay itself or the Securities Administrator any other amounts
reimbursable or payable to the Securities Administrator or the Trustee hereunder
with respect to the Re-REMIC Fund;

            (ii) to make payments to the applicable Certificateholders in the
amounts and in the manner provided in Section 6.02;

            (iii) to reimburse the Depositor in accordance with written
direction from the Depositor with respect to any repurchased Underlying
Certificates for all amounts received thereon to the extent the distribution of
such amounts would make the total amount distributed in respect of any such
repurchased Underlying Certificates greater than the purchase price therefor
calculated as provided in Section 2.06(b) hereof; and

            (iv) to clear and terminate the Re-REMIC Certificate Account upon
the termination of this Agreement in accordance with Section 10.02.


                                     - 73 -
<PAGE>

                                   ARTICLE V
                                  Certificates

      Section 5.01 Mortgage Pass-Through Certificates and Re-REMIC 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 (which are also
Physical Certificates) and the Individual Certificates and as provided in
Subsection 5.01(b), the Mortgage Pass-Through Certificates and Re-REMIC
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of such Mortgage Pass-Through
Certificates and Re-REMIC Certificates may not be transferred by the Trustee
except to a successor to the Depository; (ii) ownership and transfers of
registration of such Mortgage Pass-Through Certificates and Re-REMIC
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 Mortgage Pass-Through Certificates and
Re-REMIC Certificates for purposes of exercising the rights of the related
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 Class I-B-4, Class I-B-5 and Class I-B-6
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


                                     - 74 -
<PAGE>

liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions.

      (c) (i) REMIC I will be evidenced by (x) the REMIC I Regular Interests,
which will be uncertificated and non-transferable and are hereby designated as
the "regular interests" in REMIC I and have the initial principal amounts 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 Interest, which is hereby designated as
the single "residual interest" in REMIC I (each of the foregoing as designated
below).

<TABLE>
<CAPTION>
REMIC I Regular Interest   Initial Principal Amount  Pass-Through Rate   Related Subgroup
-----------------------------------------------------------------------------------------
<S>                             <C>                       <C>                        <C>
           1-A                  $      5,432.45           5.5000%           Subgroup 1
           2-A                  $        532.83           8.0000%           Subgroup 2
           PO                   $  1,458,035.73           0.0000%           Subgroup 1
          1-ZZZ                 $165,811,816.44           5.5000%           Subgroup 1
          2-ZZZ                 $ 16,263,367.80           8.0000%           Subgroup 2
           R-I                  $        100.00           5.5000%           Subgroup 1
</TABLE>

      Distributions of principal shall be deemed to be made to the REMIC I
Regular Interests, in each case from the related Subgroup, 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 0.1% of the excess of (x) the aggregate Scheduled Principal Balance of the
Mortgage Loans in the related Subgroup over (y) the Current Principal Amount of
the Senior Certificates in such Subgroup (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 Subgroup to the related REMIC I Regular Interest ending with
the designation "ZZZ" (provided that a portion of the remaining principal equal
to the Class I-PO Certificate Principal Distribution Amount attributable to the
Discount Mortgage Loans will be distributed to REMIC I Regular Interest PO).
Realized Losses from each Subgroup 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 0.1% of the excess of
(x) the aggregate Scheduled Principal Balance of the Mortgage Loans in the
related Subgroup over (y) the Current Principal Amount of the Senior
Certificates in the related Subgroup (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 Subgroup 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, the applicable portion of
such Realized Loss will be allocated to REMIC I Regular Interest PO).

            (ii) REMIC II will be evidenced by (x) the REMIC II Regular
Interests, which will be uncertificated and non-transferable and are hereby
designated as the "regular interests" in REMIC II and have the initial principal
amounts 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 Interest, which is hereby


                                     - 75 -
<PAGE>

designated as the single "residual interest" in REMIC II (each of the foregoing
as designated below).

<TABLE>
<CAPTION>
REMIC II Regular
    Interest        Initial Principal Amount      Pass-Through Rate        Related Subgroup
------------------------------------------------------------------------------------------------
<S>                      <C>                           <C>             <C>
      I-A-1              $122,951,000.00               5.5000%                Subgroup 1
      I-A-2              $  4,033,796.13               5.5000%                Subgroup 1
      I-A-3              $ 17,400,000.00               5.5000%                Subgroup 1
      I-A-5              $ 15,496,000.00               5.5000%                Subgroup 1
      I-A-6              $ 15,731,068.14               8.0000%                Subgroup 2
      I-A-8              $    504,000.00               5.5000%                Subgroup 1
      I-PO               $  1,458,035.73               0.0000%                Subgroup 1
      R-II               $        100.00               5.5000%                Subgroup 1
      I-B-1              $  3,212,000.00                 (1)           Subgroup 1 and Subgroup 2
      I-B-2              $  1,101,000.00                 (1)           Subgroup 1 and Subgroup 2
      I-B-3              $    642,000.00                 (1)           Subgroup 1 and Subgroup 2
      I-B-4              $    367,000.00                 (1)           Subgroup 1 and Subgroup 2
      I-B-5              $    276,000.00                 (1)           Subgroup 1 and Subgroup 2
      I-B-6              $    367,285.25                 (1)           Subgroup 1 and Subgroup 2
</TABLE>

      (1)   A variable Pass-Through Rate equal to the weighted average of the
            Pass-Through Rates on REMIC I Regular Interests 1-A and 2-A,
            weighted on the basis of the Uncertificated Principal Balances of
            each such REMIC I Regular Interest.

      Interest shall be payable to the REMIC II Regular Interests at the
applicable Pass-Through Rate on the related Uncertificated Principal Balance.
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) REMIC III will be evidenced by (x) the REMIC III Regular
Certificates which are hereby designated as the "regular interests" in REMIC III
and have the initial principal amounts and accrue interest at the Pass-Through
Rates equal to those set forth in this section 5.01(c)(iii) and (y) the Class
R-III Interest, which is hereby designated as the single "residual interest" in
REMIC III (each of the foregoing as designated below). The Classes of the
Mortgage Pass-Through Certificates shall have the following designations,
initial principal amounts and Pass-Through Rates:

        Designation        Initial Principal Amount    Pass-Through Rate
        -----------        ------------------------    -----------------
           I-A-1                $122,951,000.00              5.500%
           I-A-2                $  4,033,796.13              5.500%
           I-A-3                $ 17,400,000.00              5.350%
           I-A-4                $         (1)                0.080%
           I-A-5                $ 15,496,000.00              5.500%
           I-A-6                $ 15,731,068.14                (2)
           I-A-7                $         (4)                  (3)
           I-A-8                $    504,000.00              5.500%
           I-PO                 $  1,458,035.73              0.0000%
          I-R (5)               $        100.00              5.5000%
           I-B-1                $  3,212,000.00                (6)
           I-B-2                $  1,101,000.00                (6)
           I-B-3                $    642,000.00                (6)
           I-B-4                $    367,000.00                (6)
           I-B-5                $    276,000.00                (6)
           I-B-6                $    367,285.25                (6)


                                     - 76 -

<PAGE>


      (1)   The Class I-A-4 Certificates do not have an initial principal
            amount. The Class I-A-4 Certificates have an initial Notional Amount
            of $17,400,000.00 and for any subsequent Distribution Date, the
            Class I-A-4 Certificates will have a Notional Amount equal to the
            Current Principal Amount of the Class I-A-3 Certificates as of such
            Distribution Date . For federal income tax purposes, the Class I-A-4
            Certificates will have a Notional Amount equal to the Uncertificated
            Principal Balance of REMIC II Regular Interest I-A-3.

      (2)   The Class I-A-6 Certificates will bear interest at a Pass-Through
            Rate equal to approximately 2.800% per annum for the first
            Distribution Date, and thereafter at an adjustable Pass-Through Rate
            equal to 0.4000% per annum plus LIBOR, subject to a minimum rate of
            0.4000% per annum and a maximum rate equal to 8.000% per annum.

      (3)   The Class I-A-7 Certificates will bear interest at a Pass-Through
            Rate equal to approximately 5.200% 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
            0.0000% per annum and a maximum rate equal to 7.6000% per annum.

      (4)   The Class I-A-7 Certificates do not have an initial principal
            amount. The Class I-A-7 Certificates have an initial Notional Amount
            of $15,731,068.14 and for any subsequent Distribution Date, the
            Class I-A-7 Certificates will have a Notional Amount equal to the
            Current Principal Amount of the Class I-A-6 Certificates as of such
            Distribution Date. For federal income tax purposes, the Class I-A-7
            Certificates will have a Notional Amount equal to the Uncertificated
            Principal Balance of REMIC II Regular Interest I-A-6.

      (5)   The Class I-R Certificate will represent ownership of the Class R-I
            Interest, Class R-II Interest and Class R-III Interest, each of
            which is designated herein as the sole class of residual interest in
            the related REMIC.

      (6)   The Class B Certificates will each bear interest at a variable
            pass-through rate equal to the weighted average of 5.500% and 8.000%
            per annum, weighted on the basis of the aggregate Scheduled
            Principal Balance of the Mortgage Loans included in Subgroup 1 and
            Subgroup 2, respectively (other than the PO Percentage of the
            Scheduled Principal Balance of such Mortgage Loans), minus the
            aggregate Current Principal Amount of the Subgroup 1 and Subgroup 2
            Certificates other than the Class I-PO Certificates, respectively.
            The Pass-Through Rate for the initial Interest Accrual Period is
            5.72330554% per annum. For federal income tax purposes, however, the
            Class B Certificates will bear interest at a variable Pass-Through
            Rate equal to the weighted average of the Pass-Through Rates on
            REMIC II Regular Interests I-B-1, I-B-2, I-B-3, I-B-4, I-B-5 and
            I-B-6, weighted on the basis of the Uncertificated Principal Balance
            of each such REMIC II Regular Interest immediately preceding the
            related Distribution Date.

            (iv) REMIC IV will be evidenced by (x) the Re-REMIC Certificates
(other than the Class II-R Certificates) which are hereby designated as the
"regular interests" in REMIC IV and have the initial principal amounts and
accrue interest at the Pass-Through Rates equal to those set forth in this
section 5.01(c)(iv) and (y) the Class II-R Certificate, which is hereby
designated as the single "residual interest" in REMIC IV (each of the foregoing
as designated below). The Classes of the Re-REMIC Certificates shall have the
following designations, initial principal amounts and Pass-Through Rates.


                                     - 77 -
<PAGE>

            Designation      Initial Principal Amount       Pass-Through Rate
            -----------------------------------------------------------------
              II-A-1               $ 62,306,500.00                5.00%
              II-A-2               $ 62,306,500.00                6.00%
              II-A-3               $ 11,346,712.00                5.50%
              II-A-4               $  8,000,000.00                5.50%
              II-A-5               $ 16,000,000.00                5.50%
               II-R                $          N/A                  N/A

      (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 or the Underlying Certificate, as applicable, 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,
the REMIC III Regular Certificates and the Re-REMIC Certificates, as applicable.

         (e) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With respect
to each Distribution Date and each such Class of Certificates, interest shall be
calculated on the basis of a 360-day year comprised of twelve 30-day months,
based upon the respective Pass-Through Rate set forth, or determined as
provided, above and the Current Principal Amount (or Notional Amount 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, A-3, A-4, A-5 or A-6, as applicable. 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, 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.


                                     - 78 -
<PAGE>

      (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 Class I-A-3 Certificates and the
Residual Certificates), $1,000 and in each case increments of $1.00 in excess
thereof, (ii) in the case of the Class I-A-3 Certificates, $1,000 and increments
of $1,000 in excess thereof, and (iii) in the case of the Class I-B-l, Class
I-B-2 and Class I-B-3 Certificates, $25,000 and increments of $1.00 in excess
thereof, except that one Certificate of each such Class may be issued in a
different amount so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date, and (iv) in the case of the Re-REMIC Certificates
(other than the Class II-R Certificates) $100,000 and in each case increments of
$1.00 in excess thereof. On the Closing Date, the Trustee shall execute and
countersign Physical Certificates all in an aggregate principal amount that
shall equal the Current Principal Amount of such Class on the Closing Date. The
Class I-B-4, Class I-B-5 and Class I-B-6 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 Class I-B-4,
Class I-B-5 and Class I-B-6 Certificates of each Class may be issued in a
different amount so that the sum of the denominations of all outstanding Class
I-B-4, Class I-B-5 and Class I-B-6 Certificates of such Class shall equal the
Current Principal Amount of such Class on the Closing Date. The Class I-R
Certificates and Class II-R Certificates shall each be issued in certificated
fully-registered form, in the denomination of $100. Each Class of Global
Certificates, if any, shall be issued in fully registered form in minimum dollar
denominations of $50,000 and integral multiples of $1.00 in excess thereof,
except that one Certificate of each Class may be in a different denomination so
that the sum of the denominations of all outstanding Certificates of such Class
shall equal the Current Principal Amount of such Class on the Closing Date. On
the Closing Date, the Trustee shall execute and countersign (i) in the case of
each Class of Class I-A Certificates and the Class I-B-1, Class I-B-2 and I-B-3
Certificates, the Certificate in the entire Current Principal Amount of the
respective Class and (ii) in the case of each Class of Class I-B-4, Class I-B-5
and Class I-B-6 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 clauses
(i) and (ii) 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.

      (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


                                     - 79 -
<PAGE>

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 Class I-B-4, Class I-B-5 and Class
I-B-6 Certificates, whether upon original issuance or upon issuance of any other
Certificate of any such Class in exchange therefor or upon transfer thereof:

      THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, 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


                                     - 80 -
<PAGE>

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 separate
Certificate Register for each of the Mortgage Pass-Through Certificates and
Re-REMIC Certificates, respectively in which, subject to such reasonable
regulations as it may prescribe, the Trustee shall provide for the registration
of the related Certificates and of transfers and exchanges of the related
Certificates as herein provided.

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

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

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

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


                                     - 81 -
<PAGE>

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

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

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

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

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

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

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

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


                                     - 82 -
<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.


                                     - 83 -
<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 (and with respect
to any Class I-A-3 Certificates, to Radian) 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 or Radian and any agent of the Depositor, the Trustee
may treat the Person in whose


                                     - 84 -
<PAGE>

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, Radian or any agent of
the Depositor, the Trustee or Radian shall be affected by notice to the
contrary. No Certificate shall be deemed duly presented for a transfer effective
on any Record Date unless the Certificate to be transferred is presented no
later than the close of business on the third Business Day preceding such Record
Date.

      Section 5.05 Transfer Restrictions on Residual Certificates.

      (a) Residual Certificates, or interests therein, may not be transferred
without the prior express written consent of the Tax Matters Person and the
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 and
obligations 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


                                     - 85 -
<PAGE>

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.

      (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 I-B-4, Class I-B-5 and Class
I-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


                                     - 86 -
<PAGE>

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 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 I-B-4, Class I-B-5 and
Class I-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 I-B-1, Class I-B-2 or Class I-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


                                     - 87 -
<PAGE>

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 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.

      Section 5.09 Restrictions on Transferability of Re-REMIC Certificates.

      (a) Each Class of Re-REMIC Certificates offered and sold in reliance on
Rule 144A shall be issued initially in the form of one or more Global
Certificates (the "Rule 144A Global Certificates"), which shall be deposited on
behalf of the purchasers of the Book-Entry Certificates represented thereby with
the Trustee, as custodian for the Depository, and registered in the name of the
Depository or a nominee of the Depository, duly executed and authenticated by
the Trustee (or any duly appointed Authenticating Agent). The aggregate
principal amount of the Rule 144A Global Certificates may from time to time be
increased or decreased by adjustments made on the records of the Certificate
Registrar and the Depository or its nominee as hereinafter provided.

      (b) Each class of Re-REMIC Certificates offered and sold in reliance on
Regulation S shall be issued initially, and during the "40 day distribution
compliance period" described below remain, in the form of temporary Global
Certificates (the "Regulation S Temporary Global Certificates"), which shall be
deposited on behalf of the purchasers of the Book-Entry Certificates represented
thereby with the Trustee, as custodian for the Depository, and registered in the
name of the Depository or the nominee of the Depository for the investors'
respective accounts at the Euroclear Operator or Clearstream, Luxembourg, duly
executed and authenticated by the Trustee (or any duly appointed Authentication
Agent) as hereinafter provided.

      (c) The "40 day distribution compliance period" (as defined in Regulation
S) shall terminate upon the later of (i) 40 days after the Closing Date and (ii)
receipt by the Trustee of a written certificate from the Depository, together
with copies of certificates from the Euroclear Operator and Clearstream,
Luxembourg, certifying that they have received certification of non-United
States beneficial ownership of 100% of the aggregate principal amount of the
Regulation S Temporary Global Certificates (except to the extent of any
beneficial owners thereof who will take delivery of a beneficial ownership
interest in a Rule 144A Global Certificate, all as contemplated by Section
5.09(f)). Following the termination of the 40 day distribution


                                     - 88 -
<PAGE>

compliance period, beneficial interests in the Regulation S Temporary Global
Certificates shall be exchanged for beneficial interests in permanent Global
Certificates (the "Regulation S Permanent Global Certificates"), which will be
deposited with the Trustee, as custodian, and registered in the name of a
nominee of the Depository. Simultaneously with the authentication of the
Regulation S Permanent Global Certificates, the Trustee shall cancel the
Regulation S Temporary Global Certificates. The aggregate principal amount of
the Regulation S Temporary Global Certificates and the Regulation S Permanent
Global Certificates may from time to time be increased or decreased by
adjustments made on the records of the Certificate Registrar and the Depository
or its nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.

      (d) Each Global Certificate shall represent such of the outstanding
Book-Entry Certificates as shall be specified therein and each shall provide
that it shall represent the aggregate amount of outstanding Book-Entry
Certificates from time to time endorsed thereon and that the aggregate amount of
outstanding Book-Entry Certificates represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Certificate to reflect the amount of any increase or
decrease in the amount of outstanding Book-Entry Certificates represented
thereby shall be made by the Trustee, or by the custodian at the direction of
the Trustee, in accordance with instructions given by the holder thereof as
required by Section 5.09(f).

      (e) Except as set forth in Section 5.09(f), the Global Certificates may be
transferred, in whole and not in part, only to another nominee of the Depository
or to a successor of the Depository or its nominee.

      (f) (i) The transfer and exchange of Global Certificates or beneficial
interests therein shall be effected through the Depository, in accordance with
this Agreement and the procedures of the Depository therefor, which shall
include restrictions on transfer comparable to those set forth herein to the
extent required by the Securities Act. Beneficial interests in a Global
Certificate may be transferred to persons who take delivery thereof in the form
of a beneficial interest in the same Global Certificate in accordance with the
transfer restrictions set forth in the legend referred to in Section 5.09(g).
Transfers of beneficial interests in the Global Certificates to persons required
or permitted to take delivery thereof in the form of an interest in another
Global Certificate shall be permitted as follows:

      (A) Rule 144A Global Certificate to Regulation S Global Certificate. If,
      at any time, an Owner of a beneficial interest in a Rule 144A Global
      Certificate deposited with the Depository (or the Trustee as custodian for
      the Depository) wishes to transfer its interest in such Rule 144A Global
      Certificate to a person who is required or permitted to take delivery
      thereof in the form of a beneficial interest in a Regulation S Global
      Certificate, such Owner shall, subject to compliance with the procedures
      described in the next sentence of this Section 5.09(f)(B), exchange or
      cause the exchange of such beneficial interest for an equivalent
      beneficial interest in a Regulation S Global Certificate. Upon receipt by
      the Trustee of (1) instructions given from an Agent Member directing the
      Trustee to credit or cause to be credited a beneficial interest in the
      Regulation S Global Certificate in an amount equal to the beneficial
      interest in the Rule 144A Global


                                     - 89 -
<PAGE>

      Certificate to be exchanged, (2) a written order containing information
      regarding the participant account of the Depository and the Euroclear
      Operator or Clearstream, Luxembourg account to be credited with such
      increase, and (3) a certificate in the form of Exhibit F-4 given by the
      transferring Owner stating that the transfer of such interest has been
      made in compliance with the transfer restrictions applicable to the Global
      Certificates and pursuant to and in accordance with Rule 903 or Rule 904
      of Regulation S, then the Trustee, as Certificate Registrar, shall
      instruct the Depository to reduce or cause to be reduced the outstanding
      principal amount of the applicable Rule 144A Global Certificate and to
      increase or cause to be increased the outstanding principal amount of the
      applicable Regulation S Global Certificate by the outstanding principal
      amount of the beneficial interest in the Rule 144A Global Certificate to
      be exchanged, to credit or cause to be credited to the account of the
      person specified in such instructions a beneficial interest in the
      Regulation S Global Certificate equal to the reduction in the outstanding
      principal amount of the Rule 144A Global Certificate, and to debit, or
      cause to be debited, from the account of the person making such exchange
      or transfer the beneficial interest in the Rule 144A Global Certificate
      that is being exchanged or transferred.

      (B) Regulation S Global Certificate to Rule 144A Global Certificate. If,
      at any time an Owner of a beneficial interest in a Regulation S Global
      Certificate deposited with the Depository or with the Trustee, as
      custodian for the Depository, wishes to transfer its interest in such
      Regulation S Global Certificate to a person who is required or permitted
      to take delivery thereof in the form of a beneficial interest in a Rule
      144A Global Certificate, such Owner shall exchange or cause the exchange
      of such beneficial interest for an equivalent beneficial interest in a
      Rule 144A Global Certificate as provided in this Section 5.09(f)(B). Upon
      receipt by the Trustee of (1) instructions from the Euroclear Operator or
      Clearstream, Luxembourg, if applicable, and the Depository directing the
      Trustee, as Certificate Registrar, to credit or cause to be credited a
      beneficial interest in the Rule 144A Global Certificate equal to the
      beneficial interest in the Regulation S Global Certificate to be exchanged
      and containing information regarding the participant account with the
      Depository to be credited with such increase, (2) a written order
      containing information regarding the participant account of the Depository
      and (3) if such transfer is being effected prior to the expiration of the
      "40-day distribution compliance period" (as defined by Regulation S), a
      certificate in the form of Exhibit H-2 attached hereto given by the Owner
      of such beneficial interest, then the Trustee, as Certificate Registrar,
      shall instruct the Depository to reduce or cause to be reduced the
      outstanding principal amount of such Regulation S Global Certificate and
      to increase or cause to be increased the outstanding principal amount of
      the applicable Rule 144A Global Certificate by the outstanding principal
      amount of the beneficial interest in the Regulation S Global Certificate
      to be exchanged, and the Trustee, as Certificate Registrar, shall instruct
      the Depository, concurrently with such reduction, to credit or cause to be
      credited to the account of the person specified in such instructions a
      beneficial interest in the applicable Rule 144A Global Certificate equal
      to the reduction in the outstanding principal amount of such Regulation S
      Global Certificate and to debit or cause to be debited from the account of
      the person making such transfer the beneficial interest in the Regulation
      S Global Certificate that is being transferred.


                                     - 90 -
<PAGE>

            (ii) Transfer and Exchange from Definitive Certificates to
Definitive Certificates. If Definitive Certificates are presented by a
Certificateholder to the Trustee (or its designated Certificate Registrar) with
a request to register the transfer of Definitive Certificates in the form of
other Definitive Certificates, the Trustee (or its designated Certificate
Registrar) shall register the transfer or make the exchange as requested;
provided, however, that the Certificateholder shall (x) satisfy the requirements
of Section 5.09 and (y) make the representations, acknowledgments and agreements
in the certifications attached hereto as Exhibits F-3 and F-4.

            (iii) Transfer and Exchange of a Definitive Certificate for a
Book-Entry Certificate in a Rule 144A Global Certificate or a Regulation S
Global Certificate. The transfer and exchange of a Definitive Certificate for a
beneficial interest in a Rule 144A Global Certificate or Regulation S Global
Certificate shall be effected in accordance with this Pooling and Servicing
Agreement and the procedures of the Depository therefor. If, at any time a
holder of a Definitive Certificate wishes to transfer its interest in such
Certificate to a person who is required or permitted to take delivery thereof in
the form of a beneficial interest in a Rule 144A Global Certificate or
Regulation S Global Certificate, such Certificateholder shall exchange or cause
the exchange of such Definitive Certificate for an equivalent beneficial
interest in a Rule 144A Global Certificate or Regulation S Global Certificate as
provided in this Section. Upon receipt by the Trustee of (1) the Definitive
Certificates for registration of transfer or exchange duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to the
Trustee duly executed by such Certificateholder or by his attorney, duly
authorized in writing, (2) the instructions from the Depository, directing the
Trustee, as Certificate Registrar, to credit or cause to be credited a
beneficial interest in the Rule 144A Global Certificate or Regulation S Global
Certificate equal to the Definitive Certificate to be exchanged, such
instructions to contain information regarding the participant account with the
Depository to be credited with such increase, and (3) a written order containing
information regarding the participant account of the Depository, then the
Trustee, as Certificate Registrar, shall instruct the Depository to increase or
cause to be increased the outstanding principal amount of the applicable Rule
144A Global Certificate or Regulation S Global Certificate by the outstanding
principal amount of the Definitive Certificate to be exchanged, and the Trustee,
as Certificate Registrar, shall instruct the Depository, concurrently with such
increase, to credit or cause to be credited to the account of the person
specified in such instructions a beneficial interest in the applicable Rule 144A
Global Certificate or Regulation S Global Certificate equal to the outstanding
principal amount of such Definitive Certificate being transferred.

      Each transferee of any Definitive Certificate pursuant to this Section
shall be deemed to have made the representations and warranties listed in
Section 5.09(f) hereof.

            (iv) Transfer of a beneficial interest in a Rule 144A Global
Certificate or Regulation S Permanent Global Certificate for a Definitive
Certificate. Any person having a beneficial interest in a Rule 144A Global
Certificate or Regulation S Permanent Global Certificate may upon the
satisfaction of the requirements of Section 5.09(f), exchange such beneficial
interest for a Definitive Certificate. Upon receipt by the Trustee of written
instructions or such other form of instructions as is customary for the
Depository (or the Euroclear Operator or Clearstream, Luxembourg, if
applicable), from the Depository or its


                                     - 91 -
<PAGE>

nominee on behalf of any Person having a beneficial interest in a Rule 144A
Global Certificate or Regulation S Permanent Global Certificate, then the
Trustee or the custodian, at the direction of the Trustee, shall, in accordance
with the standing instructions and procedures existing between the Depository
and the custodian, cause the outstanding principal amount of Rule 144A Global
Certificates or Regulation S Permanent Global Certificates, as applicable, to be
reduced accordingly and, following such reduction, the Trustee (or any duly
appointed Authenticating Agent) shall authenticate and deliver to the transferee
a Definitive Certificate in the appropriate principal amount.

      Definitive Certificates issued in exchange for a Book-Entry Certificate in
a Rule 144A Global Certificate or Regulation S Permanent Global Certificate, as
applicable, pursuant to this Section shall be registered in such names and in
such authorized denominations as the Depository, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee (or
its designated Certificate Registrar). The Trustee (or its designated
Certificate Registrar) shall deliver such Definitive Certificates to the persons
in whose names such Certificates are so registered. Following any such issuance
of Definitive Certificates, the Trustee (or its designated Certificate
Registrar) shall instruct the Depository to reduce or cause to be reduced the
outstanding principal amount of the applicable Global Certificate to reflect the
transfer.

            (v) Restrictions on Transfer and Exchange of Global Certificates.
Notwithstanding any other provision of this Agreement, a Global Certificate may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Clearing Agency or a nominee of such successor Clearing Agency.

      (g) Legending of Certificates. (i) each Re-REMIC Certificate that is
Global Certificate or Definitive Certificate will bear a legend in substantially
the following form:

            "[For Class II-R Certificates only:] THIS CERTIFICATE MAY NOT BE
            ACQUIRED DIRECTLY OR INDIRECTLY BY A TRANSFEREE UNLESS THE PROPOSED
            TRANSFEREE CERTIFIES TO THE TRUSTEE THAT IT IS NOT ACQUIRING SUCH
            CERTIFICATE DIRECTLY OR INDIRECTLY FOR, ON BEHALF OF OR WITH THE
            ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
            WHICH IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
            1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
            1986, AS AMENDED (EACH A "PLAN") OR PROVIDES THE OPINION OF COUNSEL
            REQUIRED BY THE POOLING AGREEMENT."

            "THIS CERTIFICATE (OR ITS PREDECESSOR) HAS NOT BEEN AND IS NOT
            EXPECTED TO BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
            1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
            BE OFFERED, SOLD, PLEDGED OR


                                     - 92 -
<PAGE>

            OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
            ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS, EXCEPT AS SET FORTH IN
            THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
            INTEREST HEREIN, THE OWNER:

            (1)   REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
                  (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB")
                  AND IS ACQUIRING SUCH CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT
                  FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR
                  OTHERS, (WHICH OTHERS ARE ALSO QIBS) TO WHOM NOTICE IS GIVEN
                  THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (B)
                  IT HAS ACQUIRED THIS CERTIFICATE IN AN OFFSHORE TRANSACTION IN
                  COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C)
                  IS OTHERWISE ACQUIRING THIS CERTIFICATE IN A TRANSACTION
                  EXEMPT FROM THE SECURITIES ACT, IN WHICH CASE (A) HAS
                  CERTIFIED TO THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR
                  APPOINTED BY IT) IN WRITING THE FACTS SURROUNDING SUCH
                  TRANSFER, IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE
                  (OR ANY SUCH CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE
                  DEPOSITOR AND (B) HAS DELIVERED A WRITTEN OPINION OF COUNSEL
                  SATISFACTORY TO THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR
                  APPOINTED BY IT) AND THE DEPOSITOR TO THE EFFECT THAT ITS
                  ACQUISITION WILL NOT VIOLATE THE SECURITIES ACT,

            (2)   AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
                  CERTIFICATE EXCEPT (A) TO A PERSON WHOM THE SELLER REASONABLY
                  BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
                  ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
                  RULE 144A UNDER THE SECURITIES ACT, (B) IN AN OFFSHORE
                  TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904
                  UNDER THE SECURITIES ACT, (C) IN A TRANSACTION MEETING THE
                  REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D)
                  PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
                  SECURITIES ACT, OR (E) SUCH SALE, PLEDGE OR OTHER TRANSFER IS
                  OTHERWISE MADE IN A TRANSFER EXEMPT FROM THE REGISTRATION
                  REQUIREMENTS OF THE SECURITIES ACT, IN WHICH CASE (A) THE
                  TRUSTEE (OR ANY CERTIFICATE REGISTRAR APPOINTED BY IT) SHALL
                  REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE
                  PROSPECTIVE TRANSFEREE CERTIFY TO THE TRUSTEE, THE SELLER, THE
                  DEPOSITOR AND THE


                                     - 93 -
<PAGE>

                  INITIAL PURCHASER IN WRITING THE FACTS SURROUNDING SUCH
                  TRANSFER, WHICH CERTIFICATION SHALL BE IN FORM AND SUBSTANCE
                  SATISFACTORY TO THE TRUSTEE (OR ANY CERTIFICATE REGISTRAR
                  APPOINTED BY IT) AND THE DEPOSITOR, AND (B) THE TRUSTEE (OR
                  ANY CERTIFICATE REGISTRAR APPOINTED BY IT) SHALL REQUIRE A
                  WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE
                  OF THE TRUSTEE) SATISFACTORY TO THE TRUSTEE (OR ANY
                  CERTIFICATE REGISTRAR APPOINTED BY IT) AND THE DEPOSITOR TO
                  THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES
                  ACT OR ANY APPLICABLE STATE SECURITIES LAWS,

            (3)   AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
                  CERTIFICATE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
                  SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND,

            (4)   ACKNOWLEDGES THAT ANY ATTEMPTED TRANSFER IN CONTRAVENTION OF
                  THE IMMEDIATELY PRECEDING RESTRICTIONS WILL BE VOID AB INITIO
                  AND THE PURPORTED TRANSFEROR WILL CONTINUE TO BE TREATED AS
                  THE OWNER OF THIS CERTIFICATE FOR ALL PURPOSES.

            AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
            HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER
            THE SECURITIES ACT. THE POOLING AND SERVICING AGREEMENT UNDER WHICH
            THIS CERTIFICATE WAS ISSUED CONTAINS A PROVISION REQUIRING THE
            TRUSTEE (OR CERTIFICATE REGISTRAR APPOINTED BY THE TRUSTEE) TO
            REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF
            THE FOREGOING."

            (ii) each Re-REMIC Certificate that is a Global Certificate will
bear a legend in substantially the following form:

            "UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
            REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
            CORPORATION ("DTC"), TO THE TRUSTEE, AS DEFINED HEREIN, OR ITS AGENT
            FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
            CERTIFICATE IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
            NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
            PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
            REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
            PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
            PERSON IS WRONGFUL INASMUCH AS


                                     - 94 -
<PAGE>

            THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."

            (iii) each Regulation S Temporary Global Certificate will bear a
legend in substantially the following form:

            "THIS REGULATION S TEMPORARY GLOBAL CERTIFICATE IS A "TEMPORARY
            GLOBAL CERTIFICATE" FOR PURPOSES OF REGULATION S UNDER THE UNITED
            STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
            WHICH IS EXCHANGEABLE FOR A PERMANENT GLOBAL CERTIFICATE SUBJECT TO
            THE TERMS AND CONDITIONS SET FORTH HEREIN."

            (iv) each Regulation S Permanent Global Certificate will bear a
legend in substantially the following form:

            "THIS REGULATION S PERMANENT GLOBAL CERTIFICATE IS A GLOBAL
            CERTIFICATE WHICH IS EXCHANGEABLE FOR INTERESTS IN OTHER GLOBAL
            CERTIFICATES AND DEFINITIVE CERTIFICATES SUBJECT TO THE TERMS AND
            CONDITIONS SET FORTH HEREIN AND IN THE POOLING AND SERVICING
            AGREEMENT (AS DEFINED HEREIN)."


                                     - 95 -
<PAGE>

                                   ARTICLE VI
                         Payments to Certificateholders

      Section 6.01 Distributions on the Mortgage Pass-Through Certificates.

      (a) Interest and principal (as applicable) on the Mortgage Pass-Through
Certificates will be distributed by the Trustee monthly on each Distribution
Date based on the Mortgage Pass-Through Certificates Distribution Report for
such Distribution Date furnished by the Securities Administrator pursuant to
6.05 hereof, commencing in February 2005, 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 Available Funds will be
distributed to the Senior Certificates as follows:

            first, with respect to the Class I-A-3 Certificates, to Radian, an
            amount allocable to Premium equal to the Premium Distribution Amount
            and any shortfall being allocated to such Class and Radian in
            proportion to the amount of the Premium Distribution Amount that
            would have been distributed in the absence of such shortfall;

            second, to the Senior Certificates (other than the Class I-PO
            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 Senior Certificates (other than
            the Class I-PO Certificates) is subject to reduction in the event of
            certain Net Interest Shortfalls allocable thereto;

            third, to the Senior Certificates (other than the Class I-PO
            Certificates), on a pro rata basis, any Accrued Certificate Interest
            thereon remaining undistributed from previous Distribution Dates, to
            the extent of remaining Available Funds; and

            fourth, concurrently as follows:

                  (I)   to the extent of the remaining Available Funds related
                        to Subgroup 1, to the Class I-A-1, Class I-A-2, Class
                        I-A-3, Class I-A-5, Class I-A-8 and Class I-R
                        Certificates, as principal, the Subgroup 1 Principal
                        Distribution Amount in the order set forth in Section
                        6.01(g) below, in reduction of the Current Principal
                        Amounts thereof, until the Current Principal Amounts
                        thereof have been reduced to zero; and

                  (II)  to the extent of the remaining Available Funds related
                        to Subgroup 2, to the Class I-A-6 Certificates, as
                        principal, the Subgroup 2 Principal Distribution Amount,
                        in reduction of the Current


                                     - 96 -
<PAGE>

                        Principal Amount, until the Current Principal Amount
                        thereof has been reduced to zero.

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

            sixth, to the Class I-PO Certificates, the Class I-PO Certificate
            Deferred Amount, provided, that (i) on any Distribution Date,
            distributions pursuant to this priority sixth shall not exceed the
            excess, if any, of (x) Available Funds remaining after giving effect
            to distributions pursuant to priority first through fifth above over
            (y) the sum of the amount of Accrued Certificate Interest for such
            Distribution Date and Accrued Certificate Interest remaining
            undistributed from previous Distribution Dates on all classes of
            Subordinate Certificates then outstanding, (ii) such distributions
            shall not reduce the Current Principal Amount of the Class I-PO
            Certificates and (iii) no distribution will be made in respect of
            the Class I-PO Certificate Deferred Amount on or after the
            Cross-Over Date; and

            seventh, to the Insurer, any amounts due and owing to the Insurer
      under this Agreement.

            (ii) On each Distribution Date on or prior to the Cross-Over Date,
an amount equal to the remaining Available Funds after the distributions in (i)
above will be distributed sequentially in the following order, to the Class
I-B-1, Class I-B-2, Class I-B-3, Class I-B-4, Class I-B-5 and Class I-B-6
Certificates, in each case up to an amount equal to and in the following order:
(a) the Accrued Certificate Interest thereon for such Distribution Date, (b) any
Accrued Certificate Interest thereon remaining undistributed from previous
Distribution Dates and (c) such class's Allocable Share for such Distribution
Date, in each case, to the extent of the remaining Available Funds.

            (iii) If, after distributions have been made pursuant to priorities
first, second and third of clause (i) above on any Distribution Date, the
remaining Available Funds related to Subgroup 1 is less than the sum of the
Subgroup 1 and Class I-PO Principal Distribution Amount, or the remaining
Available Funds related to Subgroup 2 is less than the Subgroup 2 Principal
Distribution Amount, such amounts shall be reduced, and such remaining funds
will be distributed to the related Senior Certificates (other than the Interest
Only 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 sixth 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.


                                     - 97 -
<PAGE>

      Notwithstanding the priorities relating to distributions of principal
among the Insured Certificates described above, on any Distribution Date,
distributions in respect of principal on the Insured Certificates will be
allocated among the Holders of the Insured Certificates as set forth in Section
6.11. On each Distribution Date on which amounts are available for distributions
in reduction of the Current Principal Amount of the Insured Certificates
(including, for purposes of this paragraph, the portion of any Insured Payment
allocable to principal) the aggregate amount available for such distributions
will be rounded upward by the Rounding Amount. Such rounding will be
accomplished on the first Distribution Date on which distributions in reduction
of the Current Principal Amount of the Insured Certificates are made by
withdrawing from the Rounding Account the Rounding Amount for deposit into the
Distribution Account, and such Rounding Amount will be added to the amount that
is available for distributions in reduction of the Current Principal Amount of
the Insured Certificates. On each succeeding Distribution Date on which
distributions in reduction of the Current Principal Amount of the Insured
Certificates are made, first, the aggregate amount available for distribution in
reduction of the Current Principal Amount of the Insured Certificates will be
applied to repay the Rounding Amount withdrawn from the Rounding Account on the
prior Distribution Date and then, the remainder of such allocable amount, if
any, will be similarly rounded upward through another withdrawal from the
Rounding Account and such determined Rounding Amount will be added to the amount
that is available for distribution in reduction of the Current Principal Amount
of the Insured Certificates. Any funds remaining in the Rounding Account after
the Current Principal Amount of the Insured Certificates is reduced to zero
shall be distributed to the Class I-R Certificateholders.

      (b) On each Distribution Date, any Available Funds remaining after payment
of interest and principal to the Classes of Certificates entitled thereto, will
be distributed to the Class I-R Certificates; provided, that if on any
Distribution Date there are any 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 I-R Certificates.

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

      (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 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 (other than the
Class I-PO Certificates) 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


                                     - 98 -
<PAGE>

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.

      (g) On each Distribution Date, an amount, up to the amount of the Subgroup
1 Principal Distribution Amount for that Distribution Date, will be distributed
as principal as follows:

      (1)   to the Class I-R Certificates, in reduction of the Current Principal
            Amount thereof, until the Current Principal Amount thereof has been
            reduced to zero;

      (2)   to the Class I-A-5 Certificates and Class I-A-8 Certificates, the
            Lockout Principal Amount, concurrently on a pro rata basis based on
            the Current Principal Amount of each such Class, in reduction of the
            Current Principal Amounts thereof, until the Current Principal
            Amounts thereof have been reduced to zero;

      (3)   an amount equal to the lesser of (a) $17,400 and (b) the balance of
            the Subgroup 1 Principal Distribution Amount remaining after the
            distributions, if any, described under clause (2) above, to the
            Class I-A-3 Certificates, for each Distribution Date commencing on
            the Distribution Date in February 2008, in reduction of the Current
            Principal Amount thereof, until the Current Principal Amount thereof
            has been reduced to zero;

      (4)   to the Class I-A-1, Class I-A-2 and Class I-A-3 Certificates,
            sequentially, in that order, in each case in reduction of the
            Current Principal Amount thereof, until the Current Principal Amount
            thereof has been reduced to zero; and

      (5)   to the Class I-A-5 Certificates and Class I-A-8 Certificates,
            concurrently on a pro rata basis based on the Current Principal
            Amount of each such class, in reduction of the Current Principal
            Amounts thereof, until the Current Principal Amounts thereof have
            been reduced to zero.

      (h) On each Distribution Date, an amount, up to the amount of the Subgroup
2 Principal Distribution Amount for that Distribution Date, will be distributed
as principal, to the Class I-A-6 Certificates, in reduction of the Current
Principal Amount thereof, until the Current Principal Amount thereof has been
reduced to zero

      (i) In addition, in the event that the Master Servicer receives any
Subsequent Recoveries from a Servicer, the Master Servicer shall deposit such
funds into the Master Servicer Collection Account pursuant to Section 4.02. If,
after taking into account such Subsequent


                                     - 99 -
<PAGE>

Recoveries, the amount of a Realized Loss is reduced, the amount of such
Subsequent Recoveries will be applied to increase the Current Principal Amount
of the Class of Subordinate Certificates with the highest payment priority to
which Realized Losses have been allocated, but not by more than the amount of
Realized Losses previously allocated to that Class of Subordinate Certificates
pursuant to Section 6.03. The amount of any remaining Subsequent Recoveries will
be applied to sequentially increase the Current Principal Amount of the
Subordinate Certificates, beginning with the Class of Subordinate Certificates
with the next highest payment priority, up to the amount of such Realized Losses
previously allocated to such Class of Certificates pursuant to Section 6.03.
Holders of such Certificates will not be entitled to any payment in respect of
current interest on the amount of such increases for any Interest Accrual Period
preceding the Distribution Date on which such increase occurs. Any such
increases shall be applied to the Current Principal Amount of each Subordinate
Certificate of such Class in accordance with its respective Fractional Undivided
Interest.

      Section 6.02 Distributions on the Re-REMIC Certificates.

      (a) On each Distribution Date, based on the statement for such
Distribution Date furnished by the Securities Administrator pursuant to Section
6.05(c) hereof, the Trustee shall distribute the interest portion of Re-REMIC
Available Funds to the Certificateholders in the following order of priority:

            (i) On each Distribution Date, the Trustee shall distribute the
interest portion of net Re-REMIC Available Funds to the Class II-A-1, Class
II-A-2, Class II-A-3, Class II-A-4 and Class II-A-5 Certificateholders, pro
rata, in an amount equal to one month's interest accrued during the related
Interest Accrual Period at the related Pass-Through Rate on the then outstanding
Certificate Principal Balance of such Certificates for such Distribution Date
plus any interest thereon remaining unpaid from any previous Distribution Dates;

      (b) On each Distribution Date, the Trustee shall distribute the principal
portion of Available Funds to the Class II-A Certificateholders in the following
order of priority:

            (i) to the Class II-A-5 Re-REMIC Certificates, in reduction of the
Certificate Principal Balance thereof, until the Certificate Principal Balance
thereof has been reduced to zero, in an amount equal to the Re-REMIC Lockout
Principal Amount; and

            (ii) to the Class II-A-1, Class II-A-2, Class II-A-3, Class II-A-4
and II-A-5 Certificates, in the following manner and order of priority:

                  (a) first, to the Class II-A-1 Certificates and Class II-A-2
            Certificates, concurrently on a pro rata basis, based on their
            respective Certificate Principal Balances, in reduction of the
            Certificate Principal Balances of such Classes until reduced to
            zero;

                  (b) second, to the Class II-A-3 Certificates and Class II-A-4
            Certificates, sequentially, in that order, in each case in reduction
            of the Certificate Principal Balance of such Class until reduced to
            zero; and


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<PAGE>

                  (c) third, to the Class II-A-5 Certificates, in reduction of
            the Certificate Principal Balance thereof, until reduced to zero.

      Section 6.03 Allocation of Losses.

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

      (b) Realized Losses with respect to a Mortgage Loan will be allocated on a
pro rata basis between the I-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 I-PO Percentage of the principal
portion of any Realized Loss on a Discount Mortgage Loan and any Class I-PO
Certificate Cash Shortfall will be allocated to the 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 I-PO Certificate Cash Shortfall and all amounts previously allocated in
respect of such Realized Losses or Class I-PO Certificate Cash Shortfall and not
distributed on prior Distribution Dates will be the Class I-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 for the Class I-PO Certificates will be made in
accordance with priority sixth of Section 6.01(a)(i). No interest will accrue on
the Class I-PO Certificate Deferred Amount. On each Distribution Date through
the Cross-Over Date, the Current 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 I-PO Certificate Deferred Amount on such
Distribution Date 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 I-PO Certificate Cash Shortfalls allocable to the Principal
Only Certificates will not be added to, the Class I-PO Certificate Deferred
Amount.

      (d) The 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 I-B-6 Certificates; second, to the Class I-B-5 Certificates; third,
to the Class I-B-4 Certificates; fourth, to the Class I-B-3 Certificates; fifth,
to the Class I-B-2 Certificates; and sixth, to the Class I-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 Mortgage Pass-Through Certificates (other than the Principal Only
Certificates and the Interest Only Certificates) based on their Current
Principal Amounts. Once the Subordinate Certificates have been reduced to zero,
the principal portion of Realized Losses on the Mortgage Loans (if any) will be
allocated on a pro rata basis to the remaining Senior Certificates (other than
the Interest Only Certificates).


                                    - 101 -
<PAGE>

      (e) Notwithstanding the foregoing clause (d), no such allocation of any
Realized Loss shall be made on a Distribution Date to any Class of Mortgage
Pass-Through Certificates to the extent that such allocation would result in the
reduction of the aggregate Current Principal Amounts of all the Mortgage
Pass-Through 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 Mortgage Pass-Through
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 in writing of the Subordinate Certificate
Writedown Amount. Any Subordinate Certificate Writedown Amount shall effect a
corresponding reduction in the Current Principal Amount of (i) if prior to the
Cross-Over Date, the Current Principal Amounts of the Subordinate Certificates,
in the reverse order of their numerical Class designations and (ii) from and
after the Cross-Over Date, the Senior Certificates, 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
Mortgage Pass-Through 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 Mortgage
Pass-Through 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 to the extent not covered, with respect to the Class I-A-3
Certificates, by the Reserve Fund.

      (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 (determined


                                    - 102 -
<PAGE>

without regard to the Policy). 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.

      (k) Following distributions made on each Distribution Date, the principal
portion of any realized losses allocated to the Underlying Certificates will be
allocated to the Class II-A Certificates on a pro rata basis, based on the
Certificate Principal Balances thereof.

      Section 6.04 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 written 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 or, in the case of the Re-REMIC
Certificates, solely on the related Underlying Certificates Payment Date
Statement. Neither the Securities Administrator nor the Trustee shall be
required to confirm, verify or recompute any such information but shall be
entitled to rely conclusively on such information.

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

      Section 6.05 Statements to Certificateholders.

      (a) Concurrently with each distribution to Holders of the Mortgage
Pass-Through Certificates, the Securities Administrator shall make available to
the parties hereto, Radian, each Rating Agency and each such Holder via the
Securities Administrator's internet website as set forth below, a Mortgage
Pass-Through Certificates Distribution Report containing the following
information with respect to the Mortgage Pass-Through Certificates and the
Mortgage Loans, 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 class I-R Certificates, an
initial Current Principal Amount of $100:


                                    - 103 -
<PAGE>

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

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

            (v) the amount of the distribution allocable to interest on each
Class of Mortgage Pass-Through Certificates;

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

            (vii) the Current Principal Amount (or Notional Amount) of each
Class of Mortgage Pass-Through 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
Servicers included in such distribution;

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

            (x) with respect to each Mortgage Loan which incurred a Realized
Loss during the related Prepayment Period, (i) the loan number, (ii) the
Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date, (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) 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)
remaining in the Trust Fund as of the end of the related Prepayment Period;


                                    - 104 -
<PAGE>

            (xiii) information 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) 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) 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; 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
Mortgage Pass-Through Certificates since the prior Distribution Date and in the
aggregate for all prior Distribution Dates; and

            (xviii) the Average Loss Severity Percentage;

            (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 Subgroup Senior Percentage, Subgroup Senior
Prepayment Percentage, Subordinate Percentage and Subordinate Prepayment
Percentage for each Subgroup.

      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 Mortgage Pass-Through Certificates Distribution Report to
Holders of the Mortgage Pass-Through Certificates 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


                                    - 105 -
<PAGE>

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.

      To the extent timely received from the Securities Administrator, the
Trustee will also make monthly statements available each month to
Certificateholders and Radian via the Trustee's internet website. The Trustee's
internet website will initially be located at "www.jpmorgan.com/sfr". Assistance
in using the Trustee's website service can be obtained by calling the Trustee's
customer service desk at (877) 722-1095.

      (b) By April 30 of each year beginning in 2006, 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.

      (c) On each Distribution Date, based solely upon the information provided
in the related Underlying Certificates Payment Date Statement, the Securities
Administrator shall make available on its website at www.ctslink.com a statement
with respect to the Re-REMIC Certificates and the Underlying Certificates to
each Rating Agency, each Holder of the Re-REMIC Certificates and the Depositor
setting forth:

            (i) the Re-REMIC Available Funds payable to the Re-REMIC
Certificates for such Distribution Date, separately stating for each Class the
amounts being distributed as interest and the amounts, if any, being distributed
as principal;

            (ii) the Pass-Through Rate for each Class of Re-REMIC Certificates
constituted by the application of the portion of the Re-REMIC Available Funds
being paid as interest on the Re-REMIC Certificates of such Class;

            (iii) the Certificate Principal Balance for the Re-REMIC
Certificates before and after the Distribution Date to which the statement
relates;

            (iv) the Underlying Certificate Balances of the Underlying
Certificates, reported separately for each of the Underlying Certificates,
immediately preceding and immediately following the preceding Underlying
Certificates Payment Date;

            (v) the realized losses and any additional underlying trust
expenses, with respect to the Underlying Certificates, reported separately for
each of the Underlying Certificates for the preceding Underlying Certificates
Payment Date; and


                                    - 106 -
<PAGE>

            (vi) delinquencies on the related Underlying Mortgage Loans;
reported separately for each of the Underlying Certificates and separately
indicating Underlying Mortgage Loans that are 30 to 59, 60 to 89, and 90 plus
days delinquent, Underlying Mortgage Loans which are subject to foreclosure or
similar proceedings and Underlying Mortgage Loans, the mortgaged properties
related to which are currently held as real estate owned;

      Each such statement shall be furnished by the Securities Administrator to
the Trustee no later than one Business Day prior to the related Distribution
Date. In the case of the information furnished pursuant to clause (i) above, the
amount shall also be expressed as a dollar amount per Single Certificate.

      (d) As soon as reasonably practicable following each Distribution Date if
received, and in any event no later than one Business Day after the Distribution
Date, the Trustee shall make available to the Depositor a copy of each such
Underlying Certificates Payment Date Statement and Aggregate Collateral Report
received by it from the trustees for the Underlying Certificates. The Trustee
shall also mail any specific Underlying Certificates Payment Date Statement or
Aggregate Collateral Report if received to a Holder of the Re-REMIC Certificates
upon their request and at their expense.

      (e) After the end of each calendar year, beginning with calendar year
2005, but no later than the latest date permitted by law, the Trustee shall
prepare and deliver by first class mail to each Person who at any time during
the previous calendar year was a Holder of the Re-REMIC Certificates of record a
statement containing the information required to be contained in the regular
monthly report to Holder of the Re-REMIC Certificates, as set forth in clause
(c) above aggregated for such calendar year or the applicable portion thereof
during which such Person was a Holder of the Re-REMIC Certificates. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee or
the Securities Administrator pursuant to any requirements of the Code and
regulations thereunder as from time to time are in force.

      (f) The Trustee shall furnish to each Holder of the Re-REMIC Certificates,
during the term of this Agreement, such periodic, special, or other reports or
information, whether or not provided for herein, as shall be necessary,
reasonable or appropriate with respect to the Certificateholder, or otherwise
with respect to the purposes of this Agreement, all such reports or information
to be provided by and in accordance with such applicable instructions and
directions as the Certificateholder may reasonably require and at the expense of
such Holder of the Re-REMIC Certificates. For purposes of this Section 6.05, the
Trustee's duties are limited to the extent that the Trustee receives timely
reports as Underlying Certificateholder under the relevant Underlying Documents.

      Section 6.06 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


                                    - 107 -
<PAGE>

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 and Radian (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 6.07 Compensating Interest Payments.

      The Master Servicer shall deposit in the Master Servicer Collection
Account not later than each Distribution Account Deposit Date an amount equal to
the lesser of (i) the sum of the aggregate amounts required to be paid by the
Servicers under the related Servicing Agreement with respect to subclauses (a)
and (b) of the definition of Interest Shortfall with respect to the Mortgage
Loans for the related Distribution Date, and not so paid by the Servicers and
(ii) the Master Servicing Fee 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.

      Section 6.08 Policy Matters.

      (a) If, on the third Business Day before any Distribution Date, the
Securities Administrator notifies the Trustee that a Deficiency Amount exists on
such Distribution Date, the Trustee shall give notice to Radian and the Fiscal
Agent (as defined in the Policy), if any, by telephone or telecopy of the amount
of such Deficiency Amount, confirmed in writing by notice substantially in the
form of Exhibit A to the Policy by 12:00 noon, New York City time on such third
Business Day. The Trustee's responsibility for delivering the notice to Radian
as provided in the preceding sentence is contingent upon its receipt of
available, timely and accurate information from the Securities Administrator.

      (b) In the event the Trustee receives a certified copy of an order of the
appropriate court regarding any Preference Amount (as defined in the Policy),
the Trustee shall (i) promptly notify Radian and the Fiscal Agent, if any, and
(ii) comply with the provisions of the Policy to obtain payment by Radian of
such Preference Amount. In addition, the Trustee shall mail notice to all
Holders of the Class I-A-3 Certificates so affected that, in the event that any
such Holder's scheduled payment is a Preference Amount, such Holder will be
entitled to payment pursuant to the terms of the Policy, a copy of which shall
be made available to such Holders by the Trustee. The Trustee shall furnish to
Radian and the Fiscal Agent, if any, its records listing the payments on the
affected Class I-A-3 Certificates, if any, that have been made by the Trustee
and subsequently recovered from the affected Holders, and the dates on which
such payments were made by the Trustee.

      (c) At the time of the execution hereof, and for the purposes hereof, the
Trustee shall establish a separate special purpose trust account in the name of
the Trustee for the benefit of


                                    - 108 -
<PAGE>

Holders of the Class I-A-3 Certificates (the "Class I-A-3 Policy Payments
Account") over which the Trustee shall have exclusive control and sole right of
withdrawal. The Class I-A-3 Policy Payments Account shall be an Eligible
Account. The Trustee shall deposit any amount paid under the Policy into the
Class I-A-3 Policy Payments Account and distribute such amount only for the
purposes of making the payments to Holders of the Class I-A-3 Certificates in
respect of the Insured Payment for which the related claim was made under the
Policy. Such amounts shall be allocated by the Trustee to Holders of Class I-A-3
Certificates affected by such shortfalls in the same manner as interest and
principal payments are to be allocated with respect to such Certificates
pursuant to Section 6.01. It shall not be necessary for such payments to be made
by checks or wire transfers separate from the checks or wire transfers used to
make regular payments hereunder with funds withdrawn from the Distribution
Account. However, any payments made on the Class I-A-3 Certificates from funds
in the I-A-3 Policy Payments Account shall be noted as provided in subsection
(e) below. Funds held in the Class I-A-3 Policy Payments Account shall not be
invested by the Trustee.

      (d) Any funds received from Radian for deposit into the Class I-A-3 Policy
Payments Account pursuant to the Policy in respect of a Distribution Date or
otherwise as a result of any claim under the Policy shall be applied by the
Trustee directly to the payment in full (i) of the Deficiency Amount due on such
Distribution Date on the Class I-A-3 Certificates, or (ii) of other amounts
payable under the Policy. Funds received by the Trustee as a result of any claim
under the Policy shall be used solely for payment to the Holders of the Class
I-A-3 Certificates and may not be applied for any other purpose, including,
without limitation, satisfaction of any costs, expenses or liabilities of the
Trustee, the Depositor, the Seller, any Servicer, the Securities Administrator,
the Master Servicer or the Trust Fund. Any funds remaining in the Class I-A-3
Policy Payments Account on the first Business Day after each Distribution Date
shall be remitted promptly to Radian pursuant to the written instruction of
Radian.

      (e) The Trustee shall keep complete and accurate records in respect of (i)
all funds remitted to it by Radian and deposited into the Class I-A-3 Policy
Payments Account and (ii) the allocation of such funds to (A) payments of
interest on and principal in respect of any Class I-A-3 Certificates and (B) the
amount of funds available to make distributions on the Class I-A-3 Certificates
pursuant to Section 6.01. Radian shall have the right to inspect such records at
reasonable times during normal business hours upon three Business Days' prior
notice to the Trustee.

      (f) The Trustee acknowledges, and each Holder of a Class I-A-3 Certificate
by its acceptance of the Class I-A-3 Certificate agrees, that, without the need
for any further action on the part of Radian or the Trustee to the extent Radian
makes payments, directly or indirectly, on account of principal of or interest
on any Class I-A-3 Certificates, Radian will be fully subrogated to the rights
of the Holders of such Class I-A-3 Certificates to receive such principal and
interest from the Trust Fund. The Holders of the Class I-A-3 Certificates, by
acceptance of the Class I-A-3 Certificates, assign their rights as Holders of
the Class I-A-3 Certificates to the extent of Radian's interest with respect to
amounts paid under the Policy. Anything herein to the contrary notwithstanding,
solely for purposes of determining Radian's rights, as applicable, as subrogee
for payments distributable pursuant to Section 6.01, any payment with respect to
distributions to the Class I-A-3 Certificates which is made with funds received
pursuant to the


                                    - 109 -
<PAGE>

terms of the Policy, shall not be considered payment of the Class I-A-3
Certificates from the Trust Fund and shall not result in the distribution or the
provision for the distribution in reduction of the Current Principal Amount of
the Class I-A-3 Certificates as described in this Article VI.

      The Trustee, the Seller, the Depositor and the Master Servicer shall
cooperate in all respects with any reasonable request by Radian for action to
preserve or enforce Radian's rights or interests under this Agreement without
limiting the rights or affecting the interests of the Holders of the Mortgage
Pass-Through Certificates as otherwise set forth herein.

      (g) Upon a Responsible Officer of the Trustee becoming aware of the
occurrence of an Event of Default, the Trustee shall promptly notify Radian of
such Event of Default.

      (h) The Trustee shall promptly notify Radian of either of the following as
to which a Responsible Officer has actual knowledge: (A) the commencement of any
proceeding by or against the Seller commenced under the United States bankruptcy
code or any other applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law (an "Insolvency Proceeding") and (B) the making of
any claim in connection with any proceeding seeking the avoidance as a
preferential transfer (a "Preference Claim") of any distribution made with
respect to the Class I-A-3 Certificates as to which it has actual knowledge.
Each Holder of a Class I-A-3 Certificate, by its purchase of Class I-A-3
Certificates, and the Trustee hereby agrees that Radian (so long as no Radian
Default (as defined below) exists) may at any time during the continuation of
any proceeding relating to a Preference Claim direct all matters relating to
such Preference Claim, including, without limitation, (i) the direction of any
appeal of any order relating to any Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal. In addition and
without limitation of the foregoing, Radian shall be subrogated to the rights of
the Trustee and each Holder of a Class I-A-3 Certificate in the conduct of any
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.

      (i) The Master Servicer shall designate a Radian Contact Person who shall
be available to Radian to provide reasonable access to information regarding the
Mortgage Loans. The initial Radian Contact Person is to the attention of Client
Manager - Prime 2005-1.

      (j) The Trustee shall promptly surrender the Policy to Radian for
cancellation upon the reduction of the Current Principal Amount of the Class
I-A-3 Certificates to zero.

      (k) The Trustee shall send or otherwise make available to Radian any
statements or communications sent or made available by the Trustee to Holders of
the Class I-A-3 Certificates including, without limitation, statements prepared
pursuant to Section 6.05, 8.03 and 9.12, in each case at the same time such
reports, statements and communications are otherwise sent.

      (l) For so long as there is not a continuing default by Radian under its
obligations under the Policy (a "Radian Default"), each Holder of a Class I-A-3
Certificate agrees that Radian shall be treated by the Seller, the Depositor,
the Master Servicer, the Securities Administrator and the Trustee as if Radian
were the Holder of all Class I-A-3 Certificates for the purpose (and solely for
the purpose) of the giving of any consent, the making of any direction or


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the exercise of any voting or other control rights otherwise given the Holders
of the Class I-A-3 Certificates hereunder without any further consent of the
Holders of the Class I-A-3 Certificates and such holders shall not exercise such
rights without the prior written consent of Radian.

      With respect to this Section 6.08, (i) the terms "Receipt" and "Received"
shall mean actual delivery to Radian and Radian's Fiscal Agent, if any, received
prior to 12:00 noon, New York City time, on a Business Day; delivery either on a
day that is not a Business Day or after 12:00 noon, New York City time, shall be
deemed to be Received on the next succeeding Business Day. If any notice or
certificate given under the Policy by the Trustee is not in proper form or is
not properly completed, executed or delivered, it shall be deemed not to have
been Received. Radian or its Fiscal Agent, if any, shall promptly so advise the
Trustee and the Trustee may submit an amended notice and (ii) "Business Day"
means any day other than (A) a Saturday or Sunday, (B) a day on which Radian is
closed or (C) a day on which banking institutions in the City of New York, New
York, or in which the Corporate Trust Office of the Trustee is located, are
authorized or obligated by law or executive order to be closed.

      Section 6.09 Reserve Fund.

      The Reserve Fund will be maintained by the Trustee in a separate account.
The Reserve Fund will be beneficially owned by Bear, Stearns & Co. Inc. and will
not be an asset of the REMICs. The Trustee shall make a withdrawal on each
Distribution Date from amounts on deposit in the Reserve Fund, to the extent
funds are available therein, to cover any Prepayment Interest Shortfalls
allocated to the Class I-A-3 Certificates that were not offset by Compensating
Interest Payments and any Interest Shortfalls relating to the application of the
Relief Act allocated to the Insured Certificates. The Trustee shall distribute
such amounts withdrawn from the Reserve Fund to the Class I-A-3
Certificateholders on such Distribution Date in the same manner as interest
payments are to be allocated with respect to the Class I-A-3 Certificates
pursuant to Section 6.01. The balance of any amount remaining in the Reserve
Fund on the Distribution Date on which the Current Principal Amount of the Class
I-A-3 Certificates has been reduced to zero will be distributed to Bear, Stearns
& Co. Inc. No later than the Closing Date, the Trustee will establish and
maintain the Reserve Fund. On the Closing Date the Bear, Stearns & Co. Inc.
shall deposit with the Trustee, and the Trustee shall deposit into the Reserve
Fund, cash in an amount equal to $20,000.

      Section 6.10 Rounding Account.

      (a) No later than the Closing Date, the Trustee will establish and
maintain with itself a segregated trust account that is an Eligible Account,
which shall be titled "Rounding Account, JPMorgan Chase Bank N.A., as trustee
for the registered holders of Prime Mortgage Trust 2005-1, Mortgage Pass-Through
Certificates, Series 2005-1, Class I-A-3." On the Closing Date, Bear, Stearns &
Co. Inc. shall deposit with the Trustee, and the Trustee shall deposit into the
Rounding Account, cash in an amount equal to $999.99.

      (b) The Trustee on each Distribution Date shall, based upon information
provided to it by the Master Servicer for the related Distribution Date,
withdraw funds from the Rounding Account to pay the Rounding Amount to the
Certificate Owners of the Insured Certificates pursuant to Section 6.01. In
addition, the Trustee on each Distribution Date shall, based upon


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information provided to it by the Master Servicer for the related Distribution
Date, withdraw funds from the Distribution Account to repay to the Rounding
Account the Rounding Amount from the prior Distribution Date as contemplated in
Section 6.01.

      Section 6.11 Principal Distributions on the Insured Certificates.

      Distributions in reduction of the Current Principal Amount of the Insured
Certificates will be made in integral multiples of $1,000 at the request of the
appropriate representatives of Deceased Holders of such Insured Certificates and
at the request of Living Owners of such Insured Certificates or by mandatory
distributions by Random Lot, pursuant to clauses (a) and (d) below, or on a pro
rata basis pursuant to clause (e) below.

      (a) On each Distribution Date on which distributions in reduction of the
Current Principal Amount of the Insured Certificates are made, such
distributions will be made through the Depository in the following priority
among the Certificate Owners of the Insured Certificates:

                  (i) any request by the personal representatives of a Deceased
      Holder or by a surviving tenant by the entirety, by a surviving joint
      tenant or by a surviving tenant in common, but not exceeding an aggregate
      amount of $100,000 per request; and

                  (ii) any request by a Living Owner, but not exceeding an
      aggregate amount of $10,000 per request.

      Thereafter, distributions will be made, with respect to the Insured
Certificates, as provided in clauses (i) and (ii) above up to a second $100,000
and $10,000, respectively. This sequence of priorities will be repeated for each
request for principal distributions made by the Certificate Owners of the
Insured Certificates until all such requests have been honored.

      Requests for distributions in reduction of the Current Principal Amount of
the Insured Certificates presented on behalf of Deceased Holders in accordance
with the provisions of clause (i) above will be accepted in order of their
receipt by the Depository. Requests for distributions in reduction of the
Current Principal Amount of the Insured Certificate presented in accordance with
the provisions of clause (ii) above will be accepted in the order of their
receipt by the Depository after all requests presented in accordance with clause
(i) above have been honored. All requests for distributions in reduction of the
Current Principal Amount of the Insured Certificates will be accepted in
accordance with the provisions set forth in Section 6.11(c). All requests for
distributions in reduction of the Current Principal Amount of the Insured
Certificates with respect to any Distribution Date must be received by the
Depository and on the Depository's "participant terminal system" and received by
the Trustee no later than the close of business on the related Record Date.
Requests for distributions that are on the Depository's participant terminal
system and received by the Trustee after the related Record Date and requests,
in either case, for distributions not accepted with respect to any Distribution
Date, will be treated as requests for distributions in reduction of the Current
Principal Amount of Insured Certificates on the next succeeding Distribution
Date, and each succeeding Distribution Date thereafter, until such request is
accepted or is withdrawn as provided in Section 6.11(c). Such requests as are
not so withdrawn shall retain their order of priority without the need for any


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<PAGE>

further action on the part of the appropriate Certificate Owner of the related
Insured Certificate, all in accordance with the procedures of the Depository and
the Trustee. Upon the transfer of the beneficial ownership of the Insured
Certificate, any distribution request previously submitted with respect to such
Certificate will be deemed to have been withdrawn only upon the receipt by the
Trustee on or before the Record Date for such Distribution Date of notification
of such withdrawal in the manner set forth in Section 6.11(c) on the
Depository's participant terminal system.

      Distributions in reduction of the Current Principal Amount of the Insured
Certificates will be applied in an amount equal to the Subgroup Principal
Distribution Amount allocable to such Class pursuant to Section 6.01(a)(i),
plus, with respect to the Insured Certificates, any amounts available for
distribution from the Rounding Account established as provided in Section 6.10,
provided that the aggregate distribution in reduction of the Current Principal
Amount of the Insured Certificates on any Distribution Date shall be made in an
integral multiple of $1,000.

      To the extent that the portion of the Subgroup Principal Distribution
Amount allocable to distributions in reduction of the Current Principal Amount
of the Insured Certificates on any Distribution Date exceeds the aggregate
Current Principal Amount of the Insured Certificates with respect to which
distribution requests, as set forth above, have been received (plus any amounts
required to be distributed pursuant to the Rounding Account with respect to the
Insured Certificates), distributions in reduction of the Current Principal
Amount of the Insured Certificates will be made by mandatory distribution
pursuant to Section 6.11(d).

      (b) An Insured Certificate shall be deemed to be held by a Deceased Holder
for purposes of this Section 6.11 if the death of the Certificate Owner thereof
is deemed to have occurred. Insured Certificates beneficially owned by tenants
by the entirety, joint tenants or tenants in common will be considered to be
beneficially owned by a single owner. The death of a tenant by the entirety,
joint tenant or tenant in common will be deemed to be the death of the
Certificate Owner, and the Insured Certificates so beneficially owned will be
eligible for priority with respect to distributions in reduction of the Current
Principal Amount thereof, subject to the limitations stated above. Insured
Certificates beneficially owned by a trust will be considered to be beneficially
owned by each beneficiary of the trust to the extent of such beneficiary's
beneficial interest therein, but in no event will a trust's beneficiaries
collectively be deemed to be Certificate Owners of a number of Individual
Insured Certificates of which such trust is the owner. The death of a
beneficiary of a trust will be deemed to be the death of a Certificate Owner of
the Insured Certificates, as applicable, owned by the trust to the extent of
such beneficiary's beneficial interest in such trust. The death of an individual
who was a tenant by the entirety, joint tenant or tenant in common in a tenancy
which is the beneficiary of a trust will be deemed to be the death of the
beneficiary of such trust. The death of a person who, during his or her
lifetime, was entitled to substantially all of the beneficial ownership
interests in Individual Insured Certificates will be deemed to be the death of
the Certificate Owner of the Insured Certificates regardless of the registration
of ownership, if such beneficial interest can be established to the satisfaction
of the Depository Participant. Such beneficial interest will be deemed to exist
in typical cases of street name or nominee ownership, ownership by a trustee,
ownership under the Uniform Gifts to Minors Act and community property or other
joint ownership arrangements between a husband and wife. Certificate beneficial
interests shall include the power to sell,


                                    - 113 -
<PAGE>

transfer or otherwise dispose of an Insured Certificate and the right to receive
the proceeds therefrom, as well as interest and distributions in reduction of
the Current Principal Amount of the Insured Certificates, as applicable, payable
with respect thereto. The Trustee shall not be under any duty to determine
independently the occurrence of the death of any deceased Certificate Owner. The
Trustee may rely entirely upon documentation delivered to it pursuant to Section
6.11(c) in establishing the eligibility of any Certificate Owner to receive the
priority accorded Deceased Holders in Section 6.11(a).

      (c) Requests for distributions in reduction of the Current Principal
Amount of Insured Certificates must be made by delivering a written request
therefor to the Depository Participant or Indirect Depository Participant that
maintains the account evidencing such Certificate Owner's interest in Insured
Certificates. In the case of a request on behalf of a Deceased Holder,
appropriate evidence of death and any tax waivers are required to be forwarded
to the Depository Participant under separate cover. The Depository Participant
shall forward a certification, satisfactory to the Trustee, certifying the death
of the Deceased Holder and the receipt of the appropriate death and tax waivers.
The Depository Participant should in turn make the request of the Depository
(or, in the case of an Indirect Depository Participant, such Indirect Depository
Participant must notify the related Depository Participant of such request,
which Depository Participant should make the request of the Depository) on the
Depository's participant terminal system. The Depository may establish such
procedures as it deems fair and equitable to establish the order of receipt of
requests for such distributions received by it on the same day. None of the
Depositor, the Seller, the Master Servicer, the Securities Administrator, Radian
or the Trustee shall be liable for any delay in delivery of requests for
distributions or withdrawals of such requests by the Depository, a Depository
Participant or any Indirect Depository Participant.

      The Depository shall maintain a list of those Depository Participants
representing the appropriate Certificate Owners of Insured Certificates that
have submitted requests for distributions in reduction of the Current Principal
Amount of Insured Certificates, together with the order of receipt and the
amounts of such requests on the Depository's participant terminal system. The
Depository will honor requests for distributions in the order of their receipt
(subject to the priorities described in Section 6.11(a) above). The Trustee
shall notify the Depository as to which requests should be honored on each
Distribution Date at least two Business Days prior to such Distribution Date
based on the report received by the Trustee pursuant to Section 4.05(c) and
shall notify the Depository as to the amount of the Subgroup Principal
Distribution Amount to be distributed to the Insured Certificates by Random Lot
pursuant to Section 6.11(d). Requests shall be honored by the Depository in
accordance with the procedures, and subject to the priorities and limitations,
described in this Section 6.11. The exact procedures to be followed by the
Trustee and the Depository for purposes of determining such priorities and
limitations will be those established from time to time by the Trustee or the
Depository, as the case may be. The decisions of the Trustee and the Depository
concerning such matters will be final and binding on all affected persons.

      Individual Insured Certificates that have been accepted for a distribution
shall be due and payable on the applicable Distribution Date. Such Certificates
shall cease to bear interest after the last day of the month preceding the month
in which such Distribution Date occurs.


                                    - 114 -
<PAGE>

      Any Certificate Owner of an Insured Certificate that has requested a
distribution may withdraw its request by so notifying in writing the Depository
Participant or Indirect Depository Participant that maintains such Certificate
Owner's account. In the event that such account is maintained by an Indirect
Depository Participant, such Indirect Depository Participant must notify the
related Depository Participant which in turn must forward the withdrawal of such
request on the Depository's participant terminal system. If such withdrawal of a
request for distribution has not been received on the Depository's participant
terminal system on or before the Record Date for the next Distribution Date, the
previously made request for distribution will be irrevocable with respect to the
making of distributions in reduction of the Current Principal Amount of the
Insured Certificates on such Distribution Date.

      In the event any requests for distributions in reduction of the Current
Principal Amount of the Insured Certificates are rejected by the Trustee for
failure to comply with the requirements of this Section 6.11, the Trustee shall
return such request to the appropriate Depository Participant with a copy to the
Depository with an explanation as to the reason for such rejection.

      (d) To the extent, if any, that distributions in reduction of the Current
Principal Amount of the Insured Certificates on a Distribution Date exceed the
outstanding Current Principal Amount of the Insured Certificates with respect to
which distribution requests have been received by the related Record Date, as
provided in Section 6.11(a) above, the additional distributions in reduction of
the Current Principal Amount of the Insured Certificates will be made by
mandatory distributions in reduction thereof. Such mandatory distributions on
Individual Insured Certificates will be made by Random Lot in accordance with
the then-applicable Random Lot procedures of the Depository, the Depository
Participants and the Indirect Depository Participants representing the
Certificate Owners. The Trustee shall notify the Depository of the aggregate
amount of the mandatory distribution in reduction of the Current Principal
Amount of the Insured Certificates to be made on any such Distribution Date. The
Depository shall then allocate such aggregate amount among its Depository
Participants on a Random Lot basis. Each Depository Participant and, in turn,
each Indirect Depository Participant will then select, in accordance with its
own procedures, Individual Insured Certificates from among those held in its
accounts to receive mandatory distributions in reduction of the Current
Principal Amount of the Insured Certificates, such that the total amount so
selected is equal to the aggregate amount of such mandatory distributions
allocated to such Depository Participant by the Depository and to such Indirect
Depository Participant by its related Depository Participant, as the case may
be. Depository Participants and Indirect Depository Participants that hold
Insured Certificates selected for mandatory distributions in reduction of the
Current Principal Amount thereof are required to provide notice of such
mandatory distributions to the affected Certificate Owners. The Master Servicer
agrees to notify the Trustee of the amount of distributions in reduction of the
Current Principal Amount of the Insured Certificates to be made on each
Distribution Date in a timely manner such that the Trustee may fulfill its
obligations pursuant to the letter of representations dated the Closing Date
among the Company, the Trustee and the Depository.

      (e) Notwithstanding any provisions herein to the contrary, on any
Distribution Date on which (i) any Realized Losses are allocated to the Insured
Certificates and (ii) a Radian Default has occurred and/or is continuing,
distributions in reduction of the Current Principal


                                    - 115 -
<PAGE>

Amount of the Insured Certificates will be made pro rata on the basis of their
respective percentage interests with the respect to the Insured Certificates
among the Certificate Owners of the Insured Certificates and will not be made in
integral multiples of $1,000 nor pursuant to requests for distribution as
permitted by this Section 6.11 or mandatory distributions by Random Lot.

      (f) In the event that Definitive Certificates representing the Insured
Certificates are issued pursuant to Section 5.01, an amendment to this
Agreement, which may be approved without the consent of any Certificateholders,
shall establish procedures relating to the manner in which distributions in
reduction of the Current Principal Amount of such Insured Certificates are to be
made; provided that such procedures shall be consistent, to the extent
practicable and customary for certificates similar to the Insured Certificates,
with the provisions of this Section 6.11.


                                    - 116 -
<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 Mortgage Pass-Through 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 with respect to the Mortgage Loans and the Mortgage
Pass-Through Certificates, the Servicing Agreements, the Assignment Agreement or
the Mortgage Pass-Through 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 Indemnified Person shall have given the Master Servicer and
the Depositor written notice thereof promptly after the Indemnified Person 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 Indemnified
Person right to indemnification hereunder, except to the extent the Master
Servicer 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.


                                    - 117 -
<PAGE>

      (b) With respect to the Underlying Certificates and Re-REMIC Certificates,
the Trustee and any director, officer, employee or agent of the Trustee shall be
indemnified by the Re-REMIC Fund and held harmless against any loss, liability
or expense (including reasonable attorney's fees and expenses) incurred in
connection with any claim or legal action relating to (a) this Agreement, (b)
the Re-REMIC Certificates or (c) the performance of any of the Trustee's duties
hereunder, including, but not limited to, liability resulting from information
distributed by the Trustee concerning the characterization, for tax purposes, of
distributions made by the Re-REMIC Fund, other than any loss, liability or
expense incurred by reason of misfeasance, bad faith or negligence in the
performance of, or omission to perform, any of the Trustee's duties hereunder.
The Mortgage Fund shall indemnify the Trustee and any director, officer,
employee or agent of the Trustee for any loss liability or expense incurred by
such party in connection with the provisions of the last sentence of Section
2.01(c) hereof. The indemnities in this clause (b) shall survive the termination
of this Agreement or the resignation or removal of the Trustee hereunder.

      (c) The Mortgage Fund 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.

      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 Mortgage Fund or the Holders of the
Mortgage Pass-Through Certificates 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, and the Trustee to the extent
it becomes party to the Servicing Agreement pursuant to Section 3.03, and any
director, officer, employee or agent of the Trustee, shall be indemnified by the
Mortgage Fund 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 Mortgage Pass-Through Certificates or
the related Servicing Agreement (except to the extent that the Master Servicer
or Trustee, as the case may be, is indemnified by the


                                    - 118 -
<PAGE>

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 Holders of the Mortgage Pass-Through Certificates 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 Mortgage
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 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.

      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; provided, however, in the event that
the Securities Administrator resigns or is terminated or removed in accordance
with the provisions hereof, the Master Servicer shall resign. Any such
determination permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Independent Counsel addressed to the Trustee and
Radian to such effect delivered to the Trustee and Radian. 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 and Radian of the resignation of the Master Servicer.


                                    - 119 -
<PAGE>

      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.

      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 and Radian 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 Mortgage Pass-Through Certificates (determined without
regard to the Policy) 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 and
Radian an Officer's Certificate and an Opinion of Independent Counsel addressed
to the Trustee and Radian, 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.


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                                  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 Holders of the Mortgage Pass-Through Certificates, 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 Mortgage Pass-Through 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


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<PAGE>

            (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.

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 Mortgage Pass-Through 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
Holders of the Mortgage Pass-Through Certificates), with a copy to the Rating
Agencies and Radian, 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 Mortgage Pass-Through
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. All reasonable and
properly documented costs and expenses incurred by the Trustee in connection
with such transfer shall be reimbursed to the Trustee by the Master Servicer
within 30 days of request therefor or, if the Master Servicer fails to pay any
such amount, reimbursed from amounts on deposit in the Distribution Amount. 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 Holder of the Mortgage Pass-Through Certificates 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


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<PAGE>

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, 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 6.06); 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, 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 Mortgage Pass-Through Certificates
(determined without regard to the Policy) 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 Master Servicer
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


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<PAGE>

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 Holders of the Mortgage
Pass-Through Certificates at their respective addresses appearing in the
Certificate Register and to the Rating Agencies and Radian.

      Section 8.04 Waiver of Defaults.

      The Trustee shall transmit by mail to all Holders of the Mortgage
Pass-Through Certificates, 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 Mortgage Pass-Through Certificates evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund may, on
behalf of all Holders of the Mortgage Pass-Through Certificates, waive any
default by the Master Servicer in the performance of its obligations hereunder
and the consequences thereof, except a default in the making of or the causing
to be made any required distribution on the Mortgage Pass-Through Certificates,
which default may only be waived by Holders of Mortgage Pass-Through
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 and Radian.

      Section 8.05 List of Certificateholders.

      Upon written request of three or more Holders of Mortgage Pass-Through
Certificates of record, for purposes of communicating with other Holders of
Mortgage Pass-Through Certificates with respect to their rights under this
Agreement, the Trustee will afford such Certificateholders access during
business hours to the most recent list of related Certificateholders held by the
Trustee.


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<PAGE>

                                   ARTICLE IX
             Concerning the Trustee and the Securities Administrator

      Section 9.01 Duties of Trustee and Securities Administrator.

      (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 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 related Certificateholders from
funds in the Distribution Account or Re-REMIC Certificate Account, as
applicable, 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;


                                    - 125 -
<PAGE>

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

            (iii) Neither the Trustee nor the Securities Administrator shall be
liable with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the directions of the Holders of Mortgage
Pass-Through Certificates or Re-REMIC Certificates, as applicable, evidencing
Fractional Undivided Interests aggregating not less than 25% of the portion of
the Trust Fund related to such Certificates, 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.


                                    - 126 -
<PAGE>

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

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

      Section 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,


                                    - 127 -
<PAGE>

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


                                    - 128 -
<PAGE>

      Section 9.03 Trustee and Securities Administrator Not Liable for Mortgage
Pass-Through Certificates, Re-REMIC Certificates, Mortgage Loans or Underlying
Certificates.

      The recitals contained herein and in the Mortgage Pass-Through
Certificates and Re-REMIC Certificates (other than the signature and
countersignature of the Trustee on such Certificates) shall be taken as the
statements of the Depositor, and neither the Trustee, nor 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 Mortgage Pass-Through
Certificates and Re-REMIC Certificates (other than the signature and
countersignature of the Trustee on the such Certificates) or of any Mortgage
Loan; 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 Mortgage Pass-Through Certificates and
Re-REMIC Certificates shall be solely in its capacity as Trustee and shall not
constitute the Mortgage Pass-Through Certificates and Re-REMIC 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 Mortgage Pass-Through Certificates and Re-REMIC
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 Mortgage
Pass-Through Certificates and Re-REMIC 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 either
Trust Fund, or any portion of either Trust Fund or its ability to make 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 of the Trustee shall be paid in accordance with a side letter
agreement between the Trustee and the Master Servicer. With respect to the
Mortgage Fund, the Securities Administrator shall be entitled to receive a fee
payable by the Master Servicer and as agreed to


                                    - 129 -
<PAGE>

between the Securities Administrator and the Master Servicer in a separate
agreement. With respect to the Re-REMIC Fund, the Securities Administrator shall
be entitled to receive on each Distribution Date the Securities Administration
Fee for such Distribution Date. In addition, the Trustee and the Securities
Administrator will be entitled to recover, from the Distribution Account
pursuant to Section 4.05 with respect to the Mortgage Pass-Through Certificates
and from the Re-REMIC Certificate Account pursuant to Section 4.07 with respect
to the Re-REMIC Certificates, all reasonable out-of-pocket expenses,
indemnification payments, disbursements and advances and the expenses of the
Trustee and the Securities Administrator, respectively, in connection with any
Event of Default, any breach of this Agreement or any claim or legal action
(including any pending or threatened claim or legal action) incurred or made by
the Trustee or the Securities Administrator, respectively, in the administration
of the trusts hereunder (including the reasonable compensation, expenses and
disbursements of its counsel) except any such expense, disbursement or advance
as may arise from its negligence or intentional misconduct or which is the
responsibility of the related Certificateholders. If funds in the Distribution
Account or Re-REMIC Certificate Account, as applicable, 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 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.

      The Securities Administrator (i) may not be the Seller, an originator of
any of the Mortgage Loans, Master Servicer, Servicer, the Depositor or an
affiliate of the Depositor unless the Securities Administrator is in an
institutional trust department of Wells Fargo, N.A., (ii) must be authorized to
exercise corporate trust powers under the laws of its jurisdiction of
organization,


                                    - 130 -
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and (iii) must be rated at least "A/F1" by Fitch, if Fitch is a Rating Agency,
or the equivalent rating by S&P or Moody's, or such other rating as is
acceptable to Fitch as provided in writing. If no successor Securities
Administrator shall have been appointed by the Depositor and shall have accepted
appointment within 60 days after the Securities Administrator ceases to be the
Securities Administrator pursuant to this Section 9.06, then the Trustee shall
perform the duties of the Securities Administrator pursuant to this Agreement.
The Trustee shall notify the Rating Agencies of any change of Securities
Administrator. In such event, the Trustee shall assume all of the rights and
obligations of the Securities Administrator hereunder arising thereafter except
that the Trustee shall not be (i) liable for losses of the predecessor
Securities Administrator or any acts or omissions of the predecessor Securities
Administrator hereunder or (ii) deemed to have made any representations and
warranties of the Securities Administrator made herein. The Trustee shall not be
accountable, shall have no liability and makes no representation as to any acts
or omissions hereunder of the Securities Administrator until such time as the
Trustee may be required to act as successor Securities Administrator pursuant to
this Section 9.06 and thereupon only for the acts or omissions of the Trustee as
successor Securities Administrator.

      The Trustee or successor Securities Administrator shall be entitled to be
reimbursed from the Master Servicer for all reasonable costs and expenses
associated with the transfer of the duties of the Securities Administrator from
the predecessor Securities Administrator, including, without limitation, any
costs or expenses associated with the complete transfer of all Securities
Administrator data as may be required by the Trustee or successor Securities
Administrator to correct any errors or insufficiencies in such Securities
Administrator data or otherwise to enable the Trustee or successor Securities
Administrator to perform the duties of the Securities Administrator properly and
effectively.

      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
(including, in the case of the Securities Administrator, in connection with the
resignation or termination of the Master Servicer) and be discharged from the
Trust hereby created by giving written notice thereof to the Depositor, the
Seller, the Securities Administrator (or the Trustee, if the Securities
Administrator resigns) 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


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which instrument shall be delivered to each of the resigning trustee or
securities administrator, as applicable, and the successor trustee or securities
administrator, as applicable. If no successor trustee or successor 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 Securities
Administrator, as applicable, so removed, the successor Trustee or Securities
Administrator, as applicable.

      (c) The Holders of Mortgage Pass-Through Certificates or Re-REMIC
Certificates, as applicable, evidencing Fractional Undivided Interests
aggregating not less than 51% of the portion of the Trust Fund related to such
Certificates, may at any time remove the Trustee or the Securities Administrator
and appoint a successor Trustee or Securities Administrator for the related
Trust Fund 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 Mortgage
Pass-Through Certificates or Re-REMIC 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


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<PAGE>

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 and Radian. The
Company shall pay the cost of any mailing by the successor Trustee or Securities
Administrator.

      Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator.

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

      Section 9.11 Appointment of Co-Trustee or Separate Trustee.

      (a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or property constituting the same may at the time be located, the
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.


                                    - 133 -
<PAGE>

      (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 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.


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<PAGE>

      (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, each 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 300% PSA). The Securities Administrator will
apply for an Employee Identification Number from the Internal Revenue Service
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, Internal Revenue Service 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, 2005 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 I-R Certificate is hereby designated as the "Tax
Matters Person" (within the meaning of Treasury Regulation Section 1.860F-4(d))
for REMIC I, the Holder of the Class I-R Certificate (in respect of the Class
R-II Interest) is hereby designated as the "Tax Matters Person" for REMIC II,
and the Holder of the Class I-R Certificate (in respect of the Class R-III
Interest) is hereby designated as the "Tax Matters Person" for REMIC III. The
Holder of the Class II-R Certificate (in respect of the Class II-R Interest) is
hereby designated as the "Tax Matters Person" (within the meaning of Treasury
Regulation Section 1.860F-4(d)) for REMIC IV. The Securities Administrator is
hereby designated and appointed as the agent of each such Tax Matters Person.
Any Holder of a Residual Certificate will by acceptance thereof appoint the
Securities Administrator as agent and attorney-in-fact for the purpose of acting
as Tax Matters Person for each 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 their 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).


                                    - 135 -
<PAGE>

      (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, original
issue discount or principal on the Certificates 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, original issue discount payments or principal or advances thereof to
any Certificateholder pursuant to Federal withholding requirements, the Trustee
or the Securities Administrator shall, together with their monthly report to
such Certificateholders, indicate such amount withheld.

      (f) The Trustee and the Securities Administrator agree to indemnify the
applicable Trust Fund and the Depositor for any taxes and costs including,
without limitation, any reasonable attorneys fees imposed on or incurred by such
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 either Trust Fund for the failure by the other to perform any duty
under this Agreement or the breach by the other of any covenant in this
Agreement.


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<PAGE>

                                    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 with respect to the Mortgage Fund and
the Mortgage Pass-Through Certificates, other than the obligation of the Trustee
to make payments to Certificateholders as hereinafter set forth and the
indemnification obligations under Section 7.03 hereof, 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 plus payment due Radian of all Radian
Reimbursement Amounts, (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 Mortgage 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 Mortgage Pass-Through Certificateholders
and Radian of all amounts required to be paid to them pursuant to this
Agreement.

      (b) In no event, however, shall the Mortgage Fund created hereby continue
beyond the earlier of (i) the "latest possible maturity date" specified in
Section 5.01(d) or (ii) 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.


                                    - 137 -
<PAGE>

      (c) The right of the Depositor or its designee to repurchase all the
assets of the Mortgage 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 10% 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 or REMIC III at
any time, and upon such election, the Depositor or its designee, shall
repurchase all the assets of the Mortgage Fund described in Subsection
10.01(a)(i) above.

      (d) The Trustee shall give notice of any termination to the Mortgage
Pass-Through Certificateholders, with a copy to the Master Servicer, the
Securities Administrator, Radian and the Rating Agencies, upon which the
Mortgage Pass-Through Certificateholders shall surrender their Mortgage
Pass-Through 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 Mortgage Pass-Through Certificates will be made
upon presentation and surrender of the Mortgage Pass-Through 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 Mortgage Pass-Through 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 Mortgage 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 Mortgage Pass-Through Certificates
by the Mortgage Pass-Through 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 Mortgage Pass-Through
Certificate (other than the Interest Only Certificates and the Class I-R
Certificates), the outstanding Current Principal Amount, plus with respect to
each Mortgage Pass-Through Certificate (other than the Class I-R Certificates),
one month's interest thereon at the applicable Pass-Through Rate; and with
respect to the Class I-R Certificates, the percentage interest evidenced thereby
multiplied by the difference, if any, between the above described repurchase
price and the aggregate amount to be distributed to the Holders of the
Certificates (other than the Class I-R Certificates). If the proceeds with
respect to the Mortgage Loans are not sufficient to pay all of the Senior
Certificates 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 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 Mortgage Pass-Through Certificateholders in trust


                                    - 138 -
<PAGE>

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
Account. Upon the presentation and surrender of the Mortgage Pass-Through
Certificates, the Trustee shall distribute to the remaining Mortgage
Pass-Through 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 Mortgage Pass-Through Certificateholders shall
surrender their Mortgage Pass-Through 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 Mortgage
Pass-Through Certificateholders to surrender their Mortgage Pass-Through
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice, not all the Mortgage
Pass-Through 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 Mortgage Pass-Through Certificateholders
concerning surrender of their Mortgage Pass-Through Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain subject to
this Agreement.

      Section 10.02 Termination of Re-REMIC Fund.

      (a) The respective obligations and responsibilities of the Depositor, the
Trustee and the Securities Administrator created hereby with respect to the
Re-REMIC Certificates (other than the obligation to make certain payments and to
send certain notices to related Certificateholders as hereinafter set forth and
the indemnification obligations under Section 7.03 hereof) shall terminate upon
the payment (or provision for payment) to the Holders of the Re-REMIC
Certificates of all amounts held by or on behalf of the Trustee and required to
be paid to them hereunder (i) on the Distribution Date in September 2035; or
(ii) if earlier, on the second Distribution Date following the Assumed Final
Distribution Date and distribution has been made by the Trustee to related
Certificateholders with respect to the last Class of Re-REMIC Certificates then
outstanding; provided, however, that in no event shall the trust created hereby
continue beyond the earlier of (i) the "latest possible maturity date" specified
in Section 5.01(d) or (ii) the expiration of twenty-one years from the death of
the last survivor of the descendants of Joseph P. Kennedy, the late ambassador
of the United States to the Court of St. James, living on the date hereof.


                                    - 139 -
<PAGE>

      (b) If the Underlying Principal Balances of the Underlying Certificates
have not been reduced to zero by the Underlying Certificates Payment Date in
September 2035, the Trustee will notify each related Certificateholder in
accordance with Section 11.07 and seek instructions from each such
Certificateholder as to whether such Certificateholder wishes to receive its
Percentage Interest of the Underlying Certificates in kind or the cash proceeds
of the sale thereof on the Distribution Date in September 2035. To the extent
consistent with minimum denominations, the Trustee will sell in accordance with
the procedures set forth below the Underlying Certificates as to which
Certificateholders have requested the sale or as to which Certificateholders
have not responded by the date indicated by the Trustee and on the following
Distribution Date distribute as interest such proceeds or to those who have so
requested, their Percentage Interests of the Underlying Certificates. In
conducting the sale of some or all of the Underlying Certificates, the Trustee
will use its best efforts to sell such Underlying Certificates at the highest
bid obtained from three dealers (which may include affiliates of the Depositor)
then active in the market for securities comparable to the Underlying
Certificates (or such lesser number as may then be active). In the event that
the Trustee is able to obtain a bid from only one active dealer, then the
Trustee may in such event obtain an opinion (a "FMV Opinion") of an investment
banking firm of national reputation (which may be an affiliate of the Depositor)
to determine whether such bid is at least equal to the fair market value of such
Underlying Certificates. Any FMV Opinion shall be obtained at the expense of the
requesting Certificateholder, and in no event shall be an expense of the Trustee
or the Trust Fund. If it is not at least equal to the fair market value of the
Underlying Certificates, the Trustee shall consult with the Certificateholders
whose Percentage Interests of the Underlying Certificates were being sold as to
whether, based on the available price, they would prefer receipt of such
Underlying Certificates in kind and shall sell or deliver in kind in accordance
with instructions received and if none are received from a Certificateholder,
the Trustee shall sell the applicable Underlying Certificates to the party who
provided the bid. In the event that the Trustee is unable to obtain a bid from
any active dealer, then the Trustee may sell the Underlying Certificates it then
holds to any party at the first bid; provided, however, that the Trustee may in
such event obtain a FMV Opinion, and if such bid is not at least equal to the
fair market value of such Underlying Certificates as stated in such FMV Opinion,
the Trustee shall consult with the Certificateholders whose Percentage Interests
of the Underlying Certificates were being sold as to whether, based on the
available price, they would prefer receipt of such Underlying Certificates in
kind and shall sell or deliver in kind in accordance with instructions received
and if none are received from a Certificateholder, the Trustee shall sell the
applicable Underlying Certificates to the party who provided the bid.
Notwithstanding the foregoing, any purchaser of such Underlying Certificates
must be an eligible transferee pursuant to the terms of the related Underlying
Documents. Any expenses of the Trustee incurred in connection with the
provisions of this Section 10.02(b) shall be reimbursed to the Trustee from the
proceeds of the sale of the Underlying Certificates, or to the extent not
covered, from the Re-REMIC Fund in accordance with Section 4.07 hereof and
otherwise from the Depositor.

      (c) Whenever the Securities Administrator determines, on the basis of
Underlying Certificates Payment Date Statements or a notice to the Underlying
Certificateholder, that the final distribution on the related Re-REMIC
Certificates (which may include in accordance with


                                    - 140 -
<PAGE>

Section 10.02(b) a distribution in kind of the related Underlying Certificates)
will be made, the Securities Administrator shall give notice thereof to the
Trustee and the Trustee shall give notice to the Re-REMIC Certificateholders,
specifying the Distribution Date upon which the related Certificateholders may
surrender their Certificates to the Trustee for payment and cancellation, as
soon as practicable but in no event later than 5 Business Days prior to the
Final Distribution Date specifying (i) the Distribution Date upon which final
payment on the applicable Certificates will be made or transfer of the related
Underlying Certificates will be effected upon presentation and surrender of such
Certificates at the office or agency appointed by the Trustee for that purpose,
(ii) the amount of any such final payment or related Underlying Certificates to
be distributed, identified by maturity and principal amount, and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable
with respect to the Certificates to be surrendered and that payments shall be
made or the related Underlying Certificates transferred only upon presentation
and surrender of Certificates at the office or agency of the Trustee therein
specified. Upon presentation and surrender of related Certificates, the Trustee
shall cause to be distributed to the related Certificateholders an amount, if a
distribution of cash, equal to the amount otherwise distributable on such
Distribution Date, or if a distribution in kind, in the case of Underlying
Certificates, to submit for transfer to be delivered in physical form, to be
registered in such name as to which it shall receive written direction;
provided, that no Underlying Certificates shall be transferred to a
Certificateholder until they furnish acceptable proof to the Trustee that they
have complied with all relevant transfer provisions of the related Underlying
Documents.

      (d) With respect to the related Certificates, any funds or Underlying
Certificates not distributed on the Final Distribution Date, because of the
failure of any applicable Certificateholders to tender their Certificates, shall
be set aside and held in trust for the account of the appropriate non-tendering
Certificateholders, and the related Trust Fund shall terminate with respect to
such Certificates. If any Certificates as to which notice of the final
distribution has been given pursuant to this Section 10.02 shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trustee shall mail a second notice to the remaining non-tendering
related Certificateholders, at their last addresses shown in the Certificate
Register, to surrender their Certificates for cancellation in order to receive,
from such funds or the related Underlying Certificates held, the final
distribution with respect thereto. If within one year after the second notice
any related Certificate shall not have been surrendered for cancellation, the
Trustee shall, directly or through an agent, take reasonable steps to contact
the remaining non-tendering Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining such funds and of contacting
related Certificateholders shall be paid out of the assets which remain held for
the benefit of such Certificateholders. If within two years after the second
notice any related Certificates shall not have been surrendered for
cancellation, the Trustee shall pay or transfer to the Depositor all amounts or
Underlying Certificates distributable to the Holders thereof and the Depositor
shall thereafter hold such amounts or Underlying Certificates for the benefit of
such Holders. No interest shall accrue or be payable to any Certificateholder on
any amount held as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section 10.02.

      (e) The Trustee shall notify the Rating Agency following the final payment
to a Re-REMIC Certificate.


                                    - 141 -
<PAGE>

      Section 10.03 Additional Termination Requirements with respect to the
Mortgage Pass-Through Certificates.

      (a) If the option of the Depositor to repurchase all of the Mortgage Loans
under Subsection 10.01(a)(i) above is exercised, the Mortgage Fund and each
related REMIC shall be terminated in accordance with the following additional
requirements, unless the Trustee and Radian have been furnished with an Opinion
of Counsel addressed to the Trustee and Radian 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 interests 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 related
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 Mortgage Pass-Through Certificates, the Trustee shall sell
or otherwise dispose of all of the remaining assets of the Mortgage Fund in
accordance with the terms hereof; and

            (iii) at or after the time of adoption of such a plan of complete
liquidation of each related REMIC, and at or prior to the final Distribution
Date relating thereto, the Trustee shall sell for cash all of the assets of such
REMIC to or at the direction of the Depositor, and each related REMIC shall
terminate at such time. (b) By their acceptance of the I-R 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 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 related REMIC. Upon complete liquidation or
final distribution of all of the assets of the Mortgage Fund, the related Trust
Fund and each related REMIC shall terminate.

      Section 10.04 Additional Termination Requirements with respect to the
Re-REMIC Certificates.

      Notwithstanding Section 10.02 hereof, in the event that any right to sell
or distribute the Underlying Certificates is exercised, the REMIC related to the
Re-REMIC Certificates shall be terminated in its entirety, if the following
additional requirements, which are intended to meet the definition of a
"qualified liquidation" in Section 860F(a)(4) of the Code, are met:

      (a) the Trustee shall specify the first day in the 90-day liquidation
period in a statement (such statement to be prepared by the Depositor together
with a qualified plan of


                                    - 142 -
<PAGE>

complete liquidation and delivered to the Securities Administrator and the
Trustee) attached to the related REMIC's final tax return prepared by the
Securities Administrator, pursuant to Treasury Regulation Section 1.860F-1 and
shall satisfy all requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder evidenced by an Opinion of Counsel
addressed to the Trustee and Securities Administrator (which shall not be an
expense of the Trustee); and

      (b) immediately following the making of the final payment on the Re-REMIC
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited, to the Holders of the Class II-R Certificates all cash on hand
(other than cash retained to meet claims), in the Re-REMIC Fund.


                                    - 143 -
<PAGE>

                                   ARTICLE XI
                            Miscellaneous Provisions

      Section 11.01 Intent of Parties.

      The parties intend that each of REMIC I, REMIC II, REMIC III and REMIC IV
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,
(with the consent of Radian except with respect to any amendment related to the
Re-REMIC Certificates) but without notice to or the consent of any of the
related 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 Counsel, addressed to the Trustee and Radian, adversely affect in any
material respect the interests of any related Certificateholder (determined
without regard to the Policy) or cause any REMIC to fail to qualify as a REMIC
for federal income tax purposes as evidenced by an Opinion of Counsel addressed
to the Trustee but not at the Trustee's expense.

      (b) With respect to the Mortgage Pass-Through Certificates, 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
Radian) and the Holders of Mortgage Pass-Through Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% 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 related 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 Mortgage Pass-Through Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all Mortgage Pass-Through Certificates then outstanding, or (iii)
cause any related REMIC to fail to qualify as a REMIC for federal income tax
purposes, as evidenced by an Opinion of Counsel addressed to the Trustee and
Radian which shall be provided to the Trustee and Radian other than at the
Trustee's expense or Radian's expense. Notwithstanding any other provision of
this Agreement, for purposes of giving or withholding of consents pursuant to
this first paragraph of Section 11.02(b), Mortgage Pass-Through 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.


                                    - 144 -
<PAGE>

      With respect to the Re-REMIC Certificates, this Agreement may also be
amended from time to time by the Company, the Depositor, the Securities
Administrator and the Trustee, and the Holders of Re-REMIC Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
Re-REMIC 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 related Certificateholders;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments received on Underlying Certificates
which are required to be distributed on any Re-REMIC Certificate without the
consent of the Holder of such Certificate, (ii) reduce the aforesaid percentage
of Re-REMIC Certificates the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all Re-REMIC Certificates
then outstanding, or (iii) cause any related REMIC to fail to qualify as a REMIC
for federal income tax purposes, as evidenced by an Opinion of 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 giving or withholding of consents pursuant to this Section 11.02(b),
Re-REMIC Certificates registered in the name of or held for the benefit of the
Depositor, the Securities Administrator or the Trustee or any Affiliate thereof
shall be entitled to vote their Fractional Undivided Interests with respect to
matters affecting such Re-REMIC 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 related Certificateholder, with a copy to the Rating
Agencies and Radian.

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

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

      Section 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


                                    - 145 -
<PAGE>

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 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


                                    - 146 -
<PAGE>

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 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


                                    - 147 -
<PAGE>

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, N.A., 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 2005-1), facsimile no.: (410) 715-2380, or such other address as may
hereafter be furnished to the other parties hereto in writing; (v) in the case
of the Rating Agencies, Fitch Ratings, One State Street Plaza, New York, New
York 10004, Attention: ABS Monitoring Department, and Standard & Poor's, a
division of The McGraw-Hill Companies, Inc., 55 Water Street, New York, New York
10041 (vi) in the case of Radian, Radian Asset Assurance Inc., 335 Madison
Avenue, New York, New York 10017, AMSRM@radian.biz, Attention: Chief Risk
Officer and Chief Legal Officer (Prime Mortgage Trust 2005-1)or such other
address as may be hereafter furnished to the Depositor, Trustee and Master
Servicer in writing by Fitch. 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.


                                    - 148 -
<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 and Radian 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.

      Section 11.13 Radian Rights.

      (a) All notices, statements, reports, certificates, lists or opinions
required by this Agreement to be sent to the parties hereto, the Rating Agencies
or the Class I-A-3 Certificateholders shall also be sent at such time to Radian
at the notice address set forth in Section 11.07.

      (b) Radian shall be an express third party beneficiary of this Agreement
for the purpose of enforcing the provisions hereof to the extent of Radian's
rights explicitly specified herein as if a party hereto.


                                    - 149 -
<PAGE>

      All references herein to the ratings assigned to the Certificates and to
the interests of any Certificateholders shall be without regard to the Policy.

      Section 11.14 Action Under the Underlying Documents. In the event that
there are any matters arising under an Underlying Document related to an
Underlying Certificate which require the vote or direction of holders of the
Underlying Certificate thereunder, the Trustee, as holder of the Underlying
Certificate will vote such Underlying Certificate in accordance with the written
instructions received from holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 51% of the principal of the
Re-REMIC Fund. In the absence of any such instructions, the Trustee will not
vote such Underlying Certificate.

            The Trustee will forward to the Certificateholders copies of any
communications received regarding matters arising that require action by holders
of the Underlying Certificates.


                                    - 150 -
<PAGE>

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

                                           STRUCTURED ASSET MORTGAGE
                                           INVESTMENTS II INC., as Depositor

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


                                           JPMORGAN CHASE BANK, N.A., as Trustee

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


                                           WELLS FARGO BANK, N.A., as Master
                                           Servicer

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


                                           WELLS FARGO BANK, N.A., as Securities
                                           Administrator

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


                                           EMC MORTGAGE CORPORATION

                                           By:
                                              ----------------------------------
                                           Name: Dana Dillard
                                           Title: Senior Vice President


                                    - 151 -
<PAGE>

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

in its capacity as Seller

EMC MORTGAGE CORPORATION


By:
    ----------------------------------
Name: Dana Dillard
Title: Senior Vice President


                                    - 152 -
<PAGE>

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

      On the 28th day of January, 2005 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., 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]


                                    - 153 -
<PAGE>

STATE OF      )
              ) ss.:
COUNTY OF     )

      On the 28th day of January, 2005 before me, a notary public in and for
said State, personally appeared ____________, known to me to be a ____________
of JPMorgan Chase Bank, N.A., 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]


                                    - 154 -
<PAGE>

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

      On the 28th day of January, 2005 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, N.A., 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]


                                    - 155 -
<PAGE>

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

      On the 28th day of January, 2005 before me, a notary public in and for
said State, personally appeared ____________, known to me to be a(n)
____________ of Wells Fargo Bank, N.A., 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]


                                    - 156 -
<PAGE>

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

      On the 28th day of January, 2005 before me, a notary public in and for
said State, personally appeared Dana Dillard, known to me to be a Senior 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]


                                    - 157 -
<PAGE>

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

         On the 28th day of January, 2005 before me, a notary public in and for
said State, personally appeared ____________, known to me to be ____________ 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]


                                    - 158 -
<PAGE>


                                    EXHIBIT 1

                                                                     EXHIBIT A-1

                        FORM OF CLASS I-A-[_] CERTIFICATE

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

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

            UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE 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>

Certificate No.1                           [Adjustable][Fixed][Variable]Pass-
                                           Through Rate

Class I-[A]-[_] Senior

Date of Pooling and Servicing Agreement    Aggregate Initial [Current
and Cut-off Date:                          Principal][Notional] Amount of
January 1, 2005                            this Senior Certificate as of the
                                           Cut-off Date:
                                           $[_____________]

First Distribution Date:                   Initial [Current Principal]
February 25, 2005                          [Notional] Amount of this Senior
                                           Certificate as of the Cut-off Date:
                                           $[_____________]

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

Assumed Final Distribution Date:
March 25, 2035

                           PRIME MORTGAGE TRUST 2005-1
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2005-1

      evidencing a fractional undivided interest in the distributions allocable
      to the Class I-[A]-[_] Certificates with respect to a portion of 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 portion of a
trust (the "Trust Fund") primarily consisting of fixed rate


                                     A-1-2
<PAGE>

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, 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, National
Association as master servicer and securities administrator (in such capacity,
the "Securities Administrator") and JPMorgan Chase Bank, N.A. 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. The Assumed Final Distribution Date is the
Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Current Principal Amount of this Class of Certificates will be reduced
to zero.]

            [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][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 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. The Assumed Final Distribution Date is the
Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the [Current Principal][Notional] Amount of this Class of Certificates
will be reduced to zero.]


                                     A-1-3
<PAGE>

            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
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"). 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, and with the consent of the
Insurer with respect to amendments related to the Mortgage Pass-Through
Certificates, evidencing Fractional Undivided Interests aggregating not less
than 51% of the portion of the Trust Fund related to such Certificates (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-1-4
<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 earlier of (i) the "latest possible maturity date" specified
in Section 5.01(d) of the Agreement or (ii) 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__             JPMORGAN CHASE BANK, N.A.
                                    Not in its individual capacity but solely as
                                    Trustee


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

                          CERTIFICATE OF AUTHENTICATION

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

                                    JPMORGAN CHASE BANK, N.A.
                                    Authorized signatory of JPMorgan Chase Bank,
                                    N.A. not in its individual capacity but
                                    solely as Trustee

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

<PAGE>

                                   ASSIGNMENT

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

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

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

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

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

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


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

                                        Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

            The assignee should include the following for purposes of
distribution:

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

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

<PAGE>

                                                                     EXHIBIT A-2

                        FORM OF CLASS I-B-[_] CERTIFICATE

            THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES, [AND THE CLASS I-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 I-B-1, Class I-B-2 and Class I-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, 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.]

            [For Class I-B-1, Class I-B-2 and Class I-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 I-B-4, Class I-B-5 and Class I-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 I-B-4, Class I-B-5 and Class I-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


                                     A-2-2
<PAGE>

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.]


                                     A-2-3
<PAGE>

Certificate No.1                            Pass-Through Rate: ____%

Class I-B-[_] Subordinate


Date of Pooling and Servicing Agreement     Aggregate Initial Current Principal
and Cut-off Date: January 1, 2005           Amount of this Subordinate
                                            Certificate as of the Cut-off Date:
                                            $[_________]

First Distribution Date:                    Initial Current Principal Amount of
February 25, 2005                           this Subordinate Certificate as of
                                            the Cut-off Date:
                                            $[_________]

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

Assumed Final Distribution Date:
March 25, 2035

                           PRIME MORTGAGE TRUST 2005-1
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2005-1

      evidencing a fractional undivided interest in the distributions allocable
      to the Class I-B-[_] Certificates with respect to a portion of 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 portion of 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


                                     A-2-4
<PAGE>

Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to SAMI II. Wells
Fargo Bank, 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 as seller and company (the
"Seller"), SAMI II, as depositor (the "Depositor"), Wells Fargo Bank, National
Association as master servicer and securities administrator (in such capacity,
the "Securities Administrator"), and JPMorgan Chase Bank, N.A. 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. The Assumed Final Distribution Date is the Distribution Date
in the month immediately following the month of the latest scheduled maturity
date of any Mortgage Loan and is not likely to be the date on which the Current
Principal Amount of this Class of Certificates will be reduced to zero.

            Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement 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 I-B-4, Class I-B-5 and Class I-B-6][No transfer of this
Class I-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


                                     A-2-5
<PAGE>

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 I-B-1, Class I-B-2 and Class I-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 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 I-B-4, Class I-B-5 and Class I-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"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust Fund formed pursuant to the Agreement.

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

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


                                     A-2-6
<PAGE>

            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, and with the consent of the
Insurer with respect to amendments related to the Mortgage Pass-Through
Certificates, evidencing Fractional Undivided Interests aggregating not less
than 51% of the portion of the Trust Fund related to such Certificates (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 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,


                                     A-2-7
<PAGE>

will the Trust Fund created by the Agreement continue beyond the earlier of (i)
the "latest possible maturity date" specified in Section 5.01(d) of the
Agreement or (ii) the expiration of 21 years after the death of certain persons
identified in the Agreement.

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


                                     A-2-8
<PAGE>

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

Dated: _________, 20__              JPMORGAN CHASE BANK, N.A.
                                    Not in its individual capacity but solely as
                                    Trustee


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

                          CERTIFICATE OF AUTHENTICATION

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

                                    JPMORGAN CHASE BANK, N.A. Authorized
                                    signatory of JPMorgan Chase Bank, N.A. not
                                    in its individual capacity but solely as
                                    Trustee


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

<PAGE>

                                   ASSIGNMENT

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

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

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

                                         Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

            The assignee should include the following for purposes of
distribution:

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

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

<PAGE>

                                                                     EXHIBIT A-3

                         FORM OF CLASS I-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-3-1
<PAGE>

Certificate No.1                             Pass-Through Rate: 0.000%

Class I- PO Senior

Date of Pooling and Servicing Agreement      Aggregate Initial Current Principal
and Cut-off Date:                            Amount of this Senior Certificate
January 1, 2005                              as of the Cut-off Date:
                                             $[_____________]

First Distribution Date:                    Initial Current Principal Amount of
February 25, 2005                           this Senior Certificate as of the
                                            Cut-off Date:
                                            $[_____________]

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

Assumed Final Distribution Date:
March 25, 2035

                           PRIME MORTGAGE TRUST 2005-1
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2005-1

      evidencing a fractional undivided interest in the distributions allocable
      to the Class I-PO Certificates with respect to a portion of 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 portion of 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


                                     A-3-2
<PAGE>

Mortgage Loans were sold by EMC Mortgage Corporation ("EMC") to SAMI II. Wells
Fargo Bank, 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, National Association as master servicer and securities administrator (in
such capacity, the "Securities Administrator") and JPMorgan Chase Bank, N.A. 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.

            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
principal required to be distributed to the Holders of Certificates of the same
Class as this Certificate. The Assumed Final Distribution Date is the
Distribution Date in the month immediately following the month of the latest
scheduled maturity date of any Mortgage Loan and is not likely to be the date on
which the Current Principal Amount of this Class of Certificates will be reduced
to zero.

            Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement 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.

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

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

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


                                     A-3-3
<PAGE>

            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, and with the consent of the
Insurer with respect to amendments related to the Mortgage Pass-Through
Certificates, evidencing Fractional Undivided Interests aggregating not less
than 51% of the portion of the Trust Fund related to such Certificates (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 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,


                                     A-3-4
<PAGE>

will the Trust Fund created by the Agreement continue beyond the earlier of (i)
the "latest possible maturity date" specified in Section 5.01(d) of the
Agreement or (ii) 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-3-5
<PAGE>

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

Dated: __________, 20__            JPMORGAN CHASE BANK, N.A.
                                   Not in its individual capacity but solely as
                                   Trustee


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

                          CERTIFICATE OF AUTHENTICATION

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

                                   JPMORGAN CHASE BANK, N.A.
                                   Authorized signatory of JPMorgan Chase Bank,
                                   N.A. not in its individual capacity but
                                   solely as Trustee


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

<PAGE>

                                   ASSIGNMENT

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

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

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

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

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

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

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

                                          Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

            The assignee should include the following for purposes of
distribution:

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

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

<PAGE>

                                                                     EXHIBIT A-4

                          FORM OF CLASS I-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 PROVIDES A TRANSFER AFFIDAVIT TO THE
TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) 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, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT SELECTED BY
SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
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
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES


                                     A-4-1
<PAGE>

DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE
PARTNERSHIP UNDER SECTION 775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION,
(2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OR 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-4-2
<PAGE>

Certificate No.1                          Pass-Through Rate: _____%

Class I-R

Date of Pooling and Servicing Agreement   Aggregate Initial Current Principal
and Cut-off Date: January 1, 2005         Amount of this Certificate as of the
                                          Cut-off Date: $___________

First Distribution Date:                  Initial Current Principal Amount of
February 25, 2005                         this Certificate as of the Cut-off
                                          Date: $_________

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

Assumed Final Distribution Date:
March 25, 2035

                           PRIME MORTGAGE TRUST 2005-1
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2005-1

      evidencing a fractional undivided interest in the distributions allocable
      to the Class I-R Certificates with respect to a portion of a Trust Fund
      (as defined below) 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
portion of 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


                                     A-4-3
<PAGE>

("EMC") to SAMI II. Wells Fargo Bank, National Association ("Wells Fargo") will
act as master servicer of the Mortgage Loans (the "Master Servicer", which term
includes any successors thereto under the Agreement referred to below). The
Trust Fund was created pursuant to the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement'), among SAMI II, as
depositor (the "Depositor"), Wells Fargo Bank, National Association as Master
Servicer and securities administrator (in such capacity, the "Securities
Administrator"), EMC Mortgage Corporation, as seller and company, and JPMorgan
Chase Bank, N.A., 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. The Assumed Final Distribution Date is the Distribution Date
in the month immediately following the month of the latest scheduled maturity
date of any Mortgage Loan and is not likely to be the date on which the Current
Principal Amount of this Class of Certificates will be reduced to zero.

            Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement 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


                                     A-4-4
<PAGE>

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.

            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").. 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, and with the consent of the
Insurer with respect to amendments related to the Mortgage Pass-Through
Certificates, evidencing Fractional Undivided Interests aggregating not less
than 51% of the portion of the Trust Fund related to such Certificates (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


                                     A-4-5
<PAGE>

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 earlier of (i) the "latest possible maturity date" specified
in Section 5.01(d) of the Agreement or (ii) 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-4-6
<PAGE>

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

Dated: _________, 20__.            JPMORGAN CHASE BANK, N.A
                                   Not in its individual capacity but solely as
                                   Trustee


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

                          CERTIFICATE OF AUTHENTICATION

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

                                   JPMORGAN CHASE BANK, N.A
                                   Authorized signatory of JPMorgan Chase Bank,
                                   N.A., not in its individual capacity but
                                   solely as Trustee


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

<PAGE>

                                   ASSIGNMENT

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

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

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

                                         Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

            The assignee should include the following for purposes of
distribution:

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

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

<PAGE>

                                                                     EXHIBIT A-5

              FORM OF RULE 144A GLOBAL CLASS II-A-[__] CERTIFICATE

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

            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.

            THE CERTIFICATES DESCRIBED HEREIN MAY ONLY BE OFFERED TO (I)
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED UNDER RULE 144A AND/OR (II) OUTSIDE
THE UNITED STATES TO ENTITIES WHICH ARE "QUALIFIED INSTITUTIONAL BUYERS" AND
WHICH ARE NOT U.S. PERSONS WITHIN THE MEANING OF REGULATION S UNDER THE 1933 ACT
AND/OR (III) INSTITUTIONAL INVESTORS THAT ARE "ACCREDITED INVESTORS" UNDER THE
1933 ACT.

            ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF THIS
CERTIFICATE (OR INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS
IN THE POOLING AND SERVICING AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, ANY SUBSERVICER, AND THE TRUST FUND
FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR EXPENSES INCURRED BY
SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.

            THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT.


                                     A-5-1
<PAGE>

Certificate No.1                          Pass-Through Rate: _____%

Class II-A-[__]

Date of Pooling and Servicing Agreement   Certificate Principal Balance of all
and Cut-off Date: January 1, 2005         Class II-A-[__] Certificates as of the
                                          Closing Date: $________

First Distribution Date:                  Initial Certificate Principal Balance
February 25, 2005                         of this Certificate as of the Closing
                                          Date: $_________

Depositor:                                CUSIP: [_____________]
Structured Asset Mortgage
Investments II Inc.
                                          ISIN: [__________]
Assumed Final Distribution Date:
September 25, 2035

                           PRIME MORTGAGE TRUST 2005-1
                              RE-REMIC CERTIFICATES
                           CLASS II-A-[__] CERTIFICATE

      evidencing a partial beneficial ownership interest in a portion of a trust
      fund (the "Trust Fund") including (i) the Underlying Certificates, (ii)
      all distributions thereon after the Underlying Distribution Date in
      January 2005, and (iii) the Re-REMIC Certificate Account and such assets
      that are deposited therein from time to time and any investments thereof,
      together with any and all income, proceeds and payments with respect
      thereto.

            THIS CERTIFIES THAT Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of this Certificate as of the Closing Date
by the Initial Certificate Principal Balance of all Class II-A-[__] Certificates
as of the Closing Date) representing a specified beneficial ownership interest
in the Trust Fund created pursuant to a Pooling and Servicing Agreement to be
dated as of the Cut-off Date specified above (the "Agreement"), among SAMI II,
as depositor (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), Wells Fargo Bank, National Association as
Master Servicer and securities administrator (in such capacity, the "Securities
Administrator"), EMC Mortgage Corporation, as seller and company, and JPMORGAN
CHASE BANK, N.A., as trustee (hereinafter called the "Trustee," which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is


                                     A-5-2
<PAGE>

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 the
acceptance hereof assents and by which such Holder is bound.

            Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each calendar month (or if such 25th day is not a Business
Day, the next succeeding Business Day) (each, a "Distribution Date"), commencing
on the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the applicable Record Date, in an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of all of the Class II-A-[__]
Certificates on such Distribution Date pursuant to Section 6.01 of the
Agreement.

            All distributions made under Section 6.01 of the Agreement on this
Certificate will be made by the Trustee (i) by wire transfer in immediately
available funds, if the Certificateholder shall have so notified the Trustee in
writing at least five Business Days prior to the related Record Date or (ii) by
check mailed to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the Corporate Trust Office or such other
location as may be specified in such notice.

            No transfer of this Class II-A-[__] 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 5.09
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.

            The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Underlying Certificates or in certain
instances distributions thereof in kind, all as more specifically set forth
herein and in the Agreement. The registered Holder hereof, by its acceptance
hereof, agrees that it will look solely to the Trust Fund (to the extent of its
rights therein) for distributions hereunder. As provided in the Agreement,
withdrawals from the Re-REMIC Certificate Account may be made from time to time
for purposes other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the Trust Fund.

            Any distribution to the Holder of this Certificate (or any
predecessor Certificate or this Class) in respect of principal hereof is binding
on such Holder and all future Holders of this Certificate and any Certificate
issued upon the transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such distribution is made upon this Certificate.


                                     A-5-3
<PAGE>

            The Certificates are issuable in fully registered form only without
coupons in the minimum denomination specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates in authorized denominations evidencing the
same aggregate Percentage Interest, as requested by the Holder surrendering the
same. In addition to the extent provided in the Agreement, this Certificate or a
permitted portion hereof may be exchanged for a pro rata amount of the
Underlying Certificates, subject to rounding downward, if necessary, to comply
with minimum denomination requirements.

            As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office, duly endorsed by or accompanied by an
assignment in the form below and by such other documents as required by the
Agreement and thereupon one or more new Certificates in authorized denominations
evidencing the same aggregate Percentage Interest will be issued to the
designated transferee or transferees.

            The Certificates have not been registered or qualified under the
Securities Act or any state securities law. No transfer, sale, pledge or other
disposition of any Certificate or any interest therein shall be made unless that
transfer is made pursuant to an effective registration statement under the
Securities Act and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. In the event that a transfer is to be made
without registration or qualification, the Trustee shall require, in order to
assure compliance with such laws, that the prospective transferor and transferee
each certify to the Depositor and the Trustee in writing the facts surrounding
the transfer. Such certifications shall be substantially in the forms of
Exhibits E, F-1 and F-2 to the Agreement, respectively. Neither the Depositor
nor the Trustee is obligated to register or qualify the Certificates under the
Securities Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of Certificates without
registration or qualification. Any Certificateholder desiring to effect such
transfer shall indemnify, pursuant to the Agreement, the Trustee and the
Depositor against any liability that may result if the transfer is not so exempt
or is not made in accordance with such applicable federal and state laws.

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

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

            The Trust Fund and the obligations of the Depositor and the Trustee
created by the Agreement with respect to the Certificates shall terminate upon
distribution (or provision for distribution) to the Certificateholders of all
amounts (or in certain instances Underlying Certificates in kind) held by or on
behalf of the Trustee and required to be distributed to them


                                     A-5-4
<PAGE>

pursuant to the Agreement. In no event, however, will the Trust Fund created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of a specific person named in the Agreement
living on the date of the Agreement.

            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 portion of the Trust Fund related
to such Certificates (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.

            THE AGREEMENT AND THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK (OTHER THAN PROVISIONS THEREOF REGARDING
CONFLICT OF LAWS) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.

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


                                     A-5-5
<PAGE>

            IN WITNESS WHEREOF, the Trustee has caused this Class II-A-[__]
Certificates to be duly executed.

Dated: January 28, 2005                JPMORGAN CHASE BANK, N.A.,
                                       as Trustee


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

Countersigned:


-------------------------------
Authorized Signatory of
JPMORGAN CHASE BANK, N.A.
as Trustee

<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assigns(s) and
transfers unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

    (please print or typewrite name and address including postal zip code of
                                   assignee)

a Percentage Interest equal to ___% evidenced by the within Re-REMIC 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 Trustee to issue a new Re-REMIC
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Re-REMIC Certificate to the following address:

Dated:

                            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______________________________________________________________
to_____________________________________________________________________________.

            Applicable statements should be mailed to___________________________
________________________________________________________________________________

            This information is provided by ___________________________________,
the Assignee named above, or __________________________________________________,
as its agent. The Assignee's taxpayer identification number is _________________
___________________________.

<PAGE>

                                                                     EXHIBIT A-6

        FORM OF TEMPORARY REGULATION S GLOBAL CLASS II-A-[__] CERTIFICATE

            THIS CERTIFICATE IS A TEMPORARY REGULATION S GLOBAL CERTIFICATE FOR
PURPOSES OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"). NEITHER THIS TEMPORARY REGULATION S GLOBAL CLASS B
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS
PERMITTED UNDER THE POOLING AND SERVICING AGREEMENT.

            THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
1933 ACT AND, PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE CLOSING DATE, MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A
U.S. PERSON EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT.

            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").

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

            THE CERTIFICATES DESCRIBED HEREIN MAY ONLY BE OFFERED TO (I) AS
DEFINED UNDER RULE 144A AND/OR (II) OUTSIDE THE UNITED STATES TO ENTITIES WHICH
ARE "QUALIFIED INSTITUTIONAL BUYERS" AND WHICH ARE NOT U.S. PERSONS WITHIN THE
MEANING OF REGULATION S UNDER THE 1933 ACT.

            ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF THIS
CERTIFICATE (OR INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS
IN THE POOLING AND SERVICING AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE
DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, ANY SUBSERVICER, AND THE TRUST FUND


                                     A-6-1
<PAGE>

FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR EXPENSES INCURRED BY
SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.

            THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT.


                                     A-6-2
<PAGE>

Certificate No.1                         Pass-Through Rate: _____%

Class II-A-[__]

Date of Pooling and Servicing Agreement  Certificate Principal Balance of all
and Cut-off Date: January 1, 2005        Class II-A-[__] Certificates as of the
                                         Closing Date: $________

First Distribution Date:                 Initial Certificate Principal Balance
February 25, 2005                        of this Certificate as of the Closing
                                         Date: $_________

Depositor:
Structured Asset Mortgage
Investments II Inc.                      CUSIP: [_____________]

                                         ISIN: [__________]
Assumed Final Distribution Date:
September 25, 2035

                           PRIME MORTGAGE TRUST 2005-1
                              RE-REMIC CERTIFICATES
                           CLASS II-A-[__] CERTIFICATE

      evidencing a partial beneficial ownership interest in a portion of a trust
      fund (the "Trust Fund") including (i) the Underlying Certificates, (ii)
      all distributions thereon after the Underlying Distribution Date in
      January 2005, and (iii) the Re-REMIC Certificate Account and such assets
      that are deposited therein from time to time and any investments thereof,
      together with any and all income, proceeds and payments with respect
      thereto.

            THIS CERTIFIES THAT Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of this Certificate as of the Closing Date
by the Initial Certificate Principal Balance of all Class II-A-[__] Certificates
as of the Closing Date) representing a specified beneficial ownership interest
in the Trust Fund created pursuant to a Pooling and Servicing Agreement to be
dated as of the Cut-off Date specified above (the "Agreement"), among SAMI II,
as depositor (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), Wells Fargo Bank, National Association as
Master Servicer and securities administrator (in such capacity, the "Securities
Administrator"), EMC Mortgage Corporation, as seller and company, and JPMORGAN
CHASE BANK, N.A., as trustee (hereinafter called the "Trustee," which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is


                                     A-6-3
<PAGE>

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 the
acceptance hereof assents and by which such Holder is bound.

            Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each calendar month (or if such 25th day is not a Business
Day, the next succeeding Business Day) (each, a "Distribution Date"), commencing
on the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the applicable Record Date, in an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of all of the Class II-A-[__]
Certificates on such Distribution Date pursuant to Section 6.01 of the
Agreement.

            All distributions made under Section 6.01 of the Agreement on this
Certificate will be made by the Trustee (i) by wire transfer in immediately
available funds, if the Certificateholder shall have so notified the Trustee in
writing at least five Business Days prior to the related Record Date or (ii) by
check mailed to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the Corporate Trust Office or such other
location as may be specified in such notice.

            No transfer of this Class II-A-[__] 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 5.09
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.

            The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Underlying Certificates or in certain
instances distributions thereof in kind, all as more specifically set forth
herein and in the Agreement. The registered Holder hereof, by its acceptance
hereof, agrees that it will look solely to the Trust Fund (to the extent of its
rights therein) for distributions hereunder. As provided in the Agreement,
withdrawals from the Re-REMIC Certificate Account may be made from time to time
for purposes other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the Trust Fund.

            Any distribution to the Holder of this Certificate (or any
predecessor Certificate or this Class) in respect of principal hereof is binding
on such Holder and all future Holders of this Certificate and any Certificate
issued upon the transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such distribution is made upon this Certificate.


                                     A-6-4
<PAGE>

            The Certificates are issuable in fully registered form only without
coupons in the minimum denomination specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates in authorized denominations evidencing the
same aggregate Percentage Interest, as requested by the Holder surrendering the
same. In addition to the extent provided in the Agreement, this Certificate or a
permitted portion hereof may be exchanged for a pro rata amount of the
Underlying Certificates, subject to rounding downward, if necessary, to comply
with minimum denomination requirements.

            As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office, duly endorsed by or accompanied by an
assignment in the form below and by such other documents as required by the
Agreement and thereupon one or more new Certificates in authorized denominations
evidencing the same aggregate Percentage Interest will be issued to the
designated transferee or transferees.

            The Certificates have not been registered or qualified under the
Securities Act or any state securities law. No transfer, sale, pledge or other
disposition of any Certificate or any interest therein shall be made unless that
transfer is made pursuant to an effective registration statement under the
Securities Act and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. In the event that a transfer is to be made
without registration or qualification, the Trustee shall require, in order to
assure compliance with such laws, that the prospective transferor and transferee
each certify to the Depositor and the Trustee in writing the facts surrounding
the transfer. Such certifications shall be substantially in the forms of
Exhibits E, F-1 and F-2 to the Agreement, respectively. Neither the Depositor
nor the Trustee is obligated to register or qualify the Certificates under the
Securities Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of Certificates without
registration or qualification. Any Certificateholder desiring to effect such
transfer shall indemnify, pursuant to the Agreement, the Trustee and the
Depositor against any liability that may result if the transfer is not so exempt
or is not made in accordance with such applicable federal and state laws.

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

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

            The Trust Fund and the obligations of the Depositor and the Trustee
created by the Agreement with respect to the Certificates shall terminate upon
distribution (or provision for distribution) to the Certificateholders of all
amounts (or in certain instances Underlying Certificates in kind) held by or on
behalf of the Trustee and required to be distributed to them


                                     A-6-5
<PAGE>

pursuant to the Agreement. In no event, however, will the Trust Fund created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of a specific person named in the Agreement
living on the date of the Agreement.

            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 portion of the Trust Fund related
to such Certificates (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.

            THE AGREEMENT AND THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK (OTHER THAN PROVISIONS THEREOF REGARDING
CONFLICT OF LAWS) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.

            Unless manually 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-6-6
<PAGE>

            IN WITNESS WHEREOF, the Trustee has caused this Class II-A-[__]
Certificates to be duly executed.

Dated: January 28, 2005               JPMORGAN CHASE BANK, N.A.,
                                      as Trustee


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

Countersigned:


-----------------------------------
Authorized Signatory of
JPMORGAN CHASE BANK, N.A.
as Trustee

<PAGE>

                                   ASSIGNMENT

            FOR VALUE RECEIVED, the undersigned hereby sell(s), assigns(s) and
transfers unto__________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
    (please print or typewrite name and address including postal zip code of
                                   assignee)

a Percentage Interest equal to ___% evidenced by the within Re-REMIC 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 Trustee to issue a new Re-REMIC
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Re-REMIC Certificate to the following address:

Dated:

                            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 _____________________________________________________________
to _____________________________________________________________________________

            Applicable statements should be mailed to __________________________
________________________________________________________________________________

            This information is provided by __________________________________,
the Assignee named above, or _____________________________________________, as
its agent. The Assignee's taxpayer identification number is ____________________
_________________________.

<PAGE>

                                                                     EXHIBIT A-7

                         FORM OF CLASS II-R CERTIFICATE

            THIS CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST
IN, AND IS NOT GUARANTEED BY THE DEPOSITOR, THE INITIAL PURCHASER OR THE TRUSTEE
OR ANY OF THEIR RESPECTIVE AFFILIATES. NONE OF THIS CERTIFICATE, THE UNDERLYING
CERTIFICATE OR THE RELATED UNDERLYING MORTGAGE LOANS ARE INSURED OR GUARANTEED
BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

            THIS CERTIFICATE EVIDENCES A BENEFICIAL OWNERSHIP INTEREST IN THE
UNDERLYING CERTIFICATES.

            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 PROVIDES A TRANSFER AFFIDAVIT TO THE
TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) 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, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT SELECTED BY
SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
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
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE


                                     A-7-1
<PAGE>

PARTNERSHIP UNDER SECTION 775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION,
(2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OR 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-7-2
<PAGE>

Certificate No.1                                Percentage Interest: 100%

Class II-R

Date of Pooling and Servicing Agreement and
Cut-off Date: January 1, 2005

First Distribution Date:
February 25, 2005

                                                CUSIP: [_____________]

Final Scheduled Distribution Date:
September 25, 2035

                           PRIME MORTGAGE TRUST 2005-1
                              RE-REMIC CERTIFICATES
                              CLASS II-RCERTIFICATE

      evidencing a partial beneficial ownership interest in a portion of a trust
      fund (the "Trust Fund") including (i) the Underlying Certificates, (ii)
      all distributions thereon after the Underlying Distribution Date in
      January 2005, and (iii) the Re-REMIC Certificate Account and such assets
      that are deposited therein from time to time and any investments thereof,
      together with any and all income, proceeds and payments with respect
      thereto.

            THIS CERTIFIES THAT Bear Stearns Securities Corp. is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the Initial Certificate Principal Balance of this Certificate as of the
Closing Date by the Initial Certificate Principal Balance of all Class II-R
Certificates as of the Closing Date) representing a specified beneficial
ownership interest in the Trust Fund created pursuant to a Pooling and Servicing
Agreement to be dated as of the Cut-off Date specified above (the "Agreement"),
among SAMI II, as depositor (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), Wells Fargo Bank, National
Association as Master Servicer and securities administrator (in such capacity,
the "Securities Administrator"), EMC Mortgage Corporation, as seller and
company, and JPMORGAN CHASE BANK, N.A., as trustee (hereinafter called the
"Trustee," which term includes any successor entity under the Agreement) and
auction administrator, a summary of certain of the pertinent provisions of which
is set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned 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 the
acceptance hereof assents and by which such Holder is bound.


                                     A-7-3
<PAGE>

            Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each calendar month (or if such 25th day is not a Business
Day, the next succeeding Business Day) (each, a "Distribution Date"), commencing
on the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the applicable Record Date, in an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of all of the Class II-R
Certificates on such Distribution Date pursuant to the Agreement. For Record
Date, accounting and certain other purposes as described herein, if any
Distribution Date occurs in the month following the month in which the
corresponding Underlying Distribution Date occurs, such date will be deemed to
fall on the last day of the month in which the Underlying Distribution Date
occurs.

            All distributions made under the Agreement on this Certificate will
be made by the Trustee (i) by wire transfer in immediately available funds, if
the Certificateholder shall have so notified the Trustee in writing at least
five Business Days prior to the related Record Date or (ii) by check mailed to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the Corporate Trust Office or such other location as may be
specified in such notice.

            The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Underlying Certificates or in certain
instances distributions thereof in kind, all as more specifically set forth
herein and in the Agreement. The registered Holder hereof, by its acceptance
hereof, agrees that it will look solely to the Trust Fund (to the extent of its
rights therein) for distributions hereunder. As provided in the Agreement,
withdrawals from the Re-REMIC Certificate Account may be made from time to time
for purposes other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including reimbursement of certain expenses
incurred with respect to the Trust Fund.

            Any distribution to the Holder of this Certificate (or any
predecessor Certificate or this Class) in respect of principal hereof is binding
on such Holder and all future Holders of this Certificate and any Certificate
issued upon the transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such distribution is made upon this Certificate.

            The Certificates are issuable in fully registered form only without
coupons in the minimum denomination specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates in authorized denominations evidencing the
same aggregate Percentage Interest, as requested by the Holder surrendering the
same. In addition to the extent provided in the Agreement, this Certificate or a
permitted portion hereof may be exchanged for a pro rata amount of the
Underlying Certificates, subject to rounding downward, if necessary, to comply
with minimum denomination requirements.

            As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office, duly endorsed by or accompanied by an
assignment in the form below and by such other documents as required by


                                     A-7-4
<PAGE>

the Agreement and thereupon one or more new Certificates in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.

            The Certificates have not been registered or qualified under the
Securities Act or any state securities law. No transfer, sale, pledge or other
disposition of any Certificate or any interest therein shall be made unless that
transfer is made pursuant to an effective registration statement under the
Securities Act and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. In the event that a transfer is to be made
without registration or qualification, the Trustee shall require, in order to
assure compliance with such laws, that the prospective transferor and transferee
each certify to the Depositor and the Trustee in writing the facts surrounding
the transfer. Such certifications shall be substantially in the forms of
Exhibits B and D to the Agreement, respectively. Neither the Depositor nor the
Trustee is obligated to register or qualify the Certificates under the
Securities Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of Certificates without
registration or qualification. Any Certificateholder desiring to effect such
transfer shall indemnify, pursuant to the Agreement, the Trustee and the
Depositor against any liability that may result if the transfer is not so exempt
or is not made in accordance with such applicable federal and state laws.

            This certificate may not be acquired directly or indirectly by, or
on behalf of, an employee benefit plan or other retirement arrangement which is
subject to title I of the Employee Retirement Income Security Act of 1974, as
amended, and/or section 4975 of the Internal Revenue Code of 1986, as amended,
unless the proposed 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.

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

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

            The Trust Fund and the obligations of the Depositor and the Trustee
created by the Agreement with respect to the Certificates shall terminate upon
distribution (or provision for distribution) to the Certificateholders of all
amounts (or in certain instances Underlying Certificates in kind) held by or on
behalf of the Trustee and required to be distributed to them pursuant to the
Agreement. In no event, however, will the Trust Fund created by the Agreement


                                     A-7-5
<PAGE>

continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of a specific person named in the Agreement living on the
date of the Agreement.

            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 portion of the Trust Fund related
to such Certificates (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.

            THE AGREEMENT AND THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK (OTHER THAN PROVISIONS THEREOF REGARDING
CONFLICT OF LAWS) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.

            Unless manually 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-7-6
<PAGE>

            IN WITNESS WHEREOF, the Trustee has caused this Class II-R
Certificates to be duly executed.

Dated: January 28, 2005                   JPMORGAN CHASE BANK, N.A.,
                                          as Trustee


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

Countersigned:


-------------------------------------
Authorized Signatory of
JPMORGAN CHASE BANK, N.A.
As Trustee

<PAGE>

                                   ASSIGNMENT

            FOR VALUE RECEIVED, the undersigned hereby sell(s), assigns(s) and
transfers unto _________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
      (please print or typewrite name and address including postal zip code
                                  of assignee)

a Percentage Interest equal to ___% evidenced by the within Re-REMIC 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 Trustee to issue a new Re-REMIC
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Re-REMIC Certificate to the following address:

Dated:

                            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 _____________________________________________________________
to _____________________________________________________________________________

            Applicable statements should be mailed to___________________________
________________________________________________________________________________
________________________________________________________________________________

            This information is provided by ___________________________________,
the Assignee named above, or __________________________________________________,
as its agent. The Assignee's taxpayer identification number is__________________
__________________________________.

<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;

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

(v)   the Periodic Rate Cap, if applicable;


                                      B-1
<PAGE>

(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

           UNDERLYING CERTIFICATES SCHEDULE FOR RE-REMIC CERTIFICATES

            (1) 99.247% percentage interest in the GS Mortgage Securities Corp.,
Mortgage Pass-Through Certificates, Series 2004-8F, Class IA-1 Certificates.

                                      C-1
<PAGE>

                                                                       EXHIBIT D

                        REQUEST FOR RELEASE OF DOCUMENTS

To:  JPMorgan Chase Bank, N.A.
     4 New York Plaza, 6th Floor
     New York, New York 10004-2477

RE:  Pooling and Servicing Agreement dated as of
     January 1, 2005, among SAMI II,
     Wells Fargo Bank,
     National Association, as Master Servicer
      and Securities Administrator,
     EMC Mortgage Corporation, as Seller
     and Company and JPMorgan Chase Bank, N.A. 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][Re-REMIC Certificates], Series 2005-1 [Class I-R Certificates]
[Class II-R Certificates] (the "Residual Certificates") for the account of a
disqualified organization; (iii) it consents to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by Structured Asset Mortgage
Investments 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:

<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]

JPMorgan Chase Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004-2477

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 2005-1 Mortgage Pass-Through Certificates (the
                  "Certificates"), including the [Class I-B-4, Class I-B-5 and
                  Class I-B-6 Certificates (the "Private Mortgage Pass-Through
                  Certificates")] [Class II-A-1, Class II-A-2, Class II-A-3,
                  Class II-A-4 and Class II-A-5 Certificates (the "Re-REMIC
                  Certificates")]

Dear Ladies and Gentlemen:

            In connection with our purchase of the [Private Mortgage
Pass-Through Certificates][Re-REMIC Certificates], we confirm that:

            (i)   we understand that the [Private Mortgage Pass-Through
                  Certificates][Re-REMIC 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 [Private Mortgage Pass-Through
                  Certificates][Re-REMIC 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 [Private Mortgage Pass-Through
                  Certificates][Re-REMIC Certificates] has been made available
                  to us;

            (iii) we are able to bear the economic risk of investment in
                  [Private Mortgage Pass-Through Certificates][Re-REMIC
                  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;


                                     F-1-1
<PAGE>

            (iv)  we are acquiring [Private Mortgage Pass-Through
                  Certificates][Re-REMIC 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 [Private
                  Mortgage Pass-Through Certificates][Re-REMIC Certificates];

            (v)   we agree the [Private Mortgage Pass-Through
                  Certificates][Re-REMIC Certificates] must be held indefinitely
                  by us (and may not be sold, pledged, hypothecated or in any
                  way disposed of) unless subsequently registered under the Act
                  and any applicable state 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 [Private Mortgage
                  Pass-Through Certificates][Re-REMIC Certificates] (such
                  disposition or exchange not being currently foreseen or
                  contemplated), we will not transfer or exchange any of the
                  [Private Mortgage Pass-Through Certificates][Re-REMIC
                  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 [Private Mortgage Pass-Through
                  Certificates][Re-REMIC Certificates] is not registered under
                  the Act (as to which we acknowledge you have no obligation),
                  the [Private Mortgage Pass-Through Certificates][Re-REMIC
                  Certificates] is sold in a transaction that does not require
                  registration under the Act and any applicable state securities
                  or "blue sky" laws and, if JPMorgan Chase Bank, N.A. (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;


                                     F-1-2
<PAGE>

           (viii) we either: (i) are not acquiring the [Private Mortgage
                  Pass-Through Certificates][Re-REMIC Certificates] 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 [Private
                  Mortgage Pass-Through Certificates][Re-REMIC Certificates] 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
                  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 [Private Mortgage Pass-Through
                  Certificates][Re-REMIC 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


                                     F-1-3
<PAGE>

                  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: (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, 2005,
among Structured Asset Mortgage Investments II Inc., Wells Fargo Bank, National
Association as master servicer and securities administrator, EMC Mortgage
Corporation, as seller and company and JPMorgan Chase Bank, N.A. 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]

<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]

<PAGE>

                                                                     EXHIBIT F-2

                FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE

[SELLER]                                                                  [Date]

JPMorgan Chase Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004-2477

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 2005-1 Mortgage Pass-Through Certificates (the
            "Certificates"), including the [Class I-B-4, Class I-B-5 and Class
            I-B-6 Certificates (the "Private Mortgage Pass-Through
            Certificates")] [Class II-A-1, Class II-A-2, Class II-A-3, Class
            II-A-4 and Class II-A-5 Certificates (the "Re-REMIC Certificates")]

Dear Ladies and Gentlemen:

            In connection with our purchase of [Private Mortgage Pass-Through
Certificates][Re-REMIC Certificates], the undersigned certifies to each of the
parties to whom this letter is addressed that it is a qualified institutional
buyer (as defined in Rule 144A under the Securities Act of 1933, as amended (the
"Act")) as follows:

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

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

      Amount: $ _____________________; and

2.    The dollar amount set forth above is:

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

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

----------
(1)   A purchase by an insurance company for one or more of its separate
      accounts, as defined by Section 2(a)(37) of the Investment Company Act of
      1940, which are neither registered nor required to be registered
      thereunder, shall be deemed to be a purchase for the account of such
      insurance company.


                                     F-2-1
<PAGE>

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

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

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

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

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

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

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

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

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

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

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


                                     F-2-2
<PAGE>

            The undersigned further certifies that it is purchasing a [Private
Mortgage Pass-Through Certificates][Re-REMIC Certificates] for its own account
or for the account of others that independently qualify as "Qualified
Institutional Buyers" as defined in Rule 144A. It is aware that the sale of the
[Private Mortgage Pass-Through Certificates][Re-REMIC Certificates] is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by Rule 144A. The undersigned understands that the [Private
Mortgage Pass-Through Certificates][Re-REMIC Certificates] may be resold,
pledged or transferred only to (i) a person reasonably believed to be a
Qualified Institutional Buyer that purchases for its own account or for the
account of a Qualified Institutional Buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance in Rule 144A, or (ii) an
institutional "accredited investor," as such term is defined under Rule 501 of
the Act in a transaction that otherwise does not constitute a public offering.

            The undersigned agrees that if at some future time it wishes to
dispose of or exchange any of the [Private Mortgage Pass-Through
Certificates][Re-REMIC Certificates], it will not transfer or exchange any of
the Privately Offered Certificates to a Qualified Institutional Buyer without
first obtaining a Rule 144A and Related Matters Certificate in the form hereof
from the transferee and delivering such certificate to the addressees hereof.
Prior to making any transfer of [Private Mortgage Pass-Through
Certificates][Re-REMIC Certificates], if the proposed Transferee is an
institutional "accredited investor," the transferor shall obtain from the
transferee and deliver to the addressees hereof an Investment Letter in the form
attached to the Pooling and Servicing Agreement, dated as of January 1, 2005,
among Structured Asset Mortgage Investments II Inc., Wells Fargo Bank, N.A., EMC
Mortgage Corporation and JPMorgan Chase Bank, N.A., as Trustee, pursuant to
Certificates were issued.

            The undersigned certifies that it either: (i) is not acquiring the
[Private Mortgage Pass-Through Certificates][Re-REMIC Certificates] 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) is providing a representation or an opinion of
counsel to the effect that the proposed transfer and holding of a [Private
Mortgage Pass-Through Certificates][Re-REMIC Certificates] 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 a prohibited transaction
exemption, including, but not limited to, Prohibited Transaction Exemption
("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60, PTE 96-23 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) has attached
hereto the opinion specified in Section 5.07 of the Agreement.

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


                                     F-2-3
<PAGE>

Name of Nominee (if any):

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

                                      Very truly yours,

                                      [PURCHASER]


                                      By:
                                          --------------------------------------
                                      (Authorized Officer)


                                      [By:
                                           -------------------------------------
                                      Attorney-in-fact]

<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]

<PAGE>

                                                                     EXHIBIT F-3

                  FORM OF TRANSFER CERTIFICATE FOR EXCHANGE OR
                  TRANSFER FROM RULE 144A GLOBAL CERTIFICATE TO
                         REGULATION S GLOBAL CERTIFICATE

JPMorgan Chase Bank, N.A.,
as Trustee
4 New York Plaza, 6th Floor
New York, New York 10004
Attention: Institutional Trust Services - Structured Finance Services -
Prime 2005-1

            Reference is hereby made to the Pooling and Servicing Agreement
("Pooling and Servicing Agreement"), dated as of January 1, 2005, among
Structured Asset Mortgage Investments II Inc., as Depositor, Wells Fargo Bank,
National Association, as Master Servicer and Securities Administrator, EMC
Mortgage Corporation, as Seller and Company and JPMorgan Chase Bank, N.A. as
Trustee. Capitalized terms used but not defined herein are used as defined in
the Pooling and Servicing Agreement:

            The undersigned (the "Transferor") owns and proposes to transfer the
interests in the Rule 144A Global Certificates specified in Annex A hereto (the
"Certificates") to __________ (the "Transferee"), in the principal amounts in
such Rule 144A Global Certificates (the "Transfer") as further specified in
Annex A hereto. In connection with the Transfer, the Transferor hereby certifies
that:

      (a)   the Transfer is being effected in accordance with transfer
            restrictions set forth in the Pooling and Servicing Agreement and
            the Certificates;

      (b)   the Transfer is being effected pursuant to and in accordance with
            Rule 903 or Rule 904 under the Securities Act of 1933, as amended
            (the "Securities Act") and, accordingly, the Transferor hereby
            further certifies that:

            (i)   the Transfer is not being made to a person in the United
                  States and (x) at the time the buy order was originated, the
                  Transferee was outside the United States or the Transferor and
                  each Person acting on its behalf reasonably believed and
                  believes that the Transferee was outside the United States or
                  (y) the transaction was executed in, on or through the
                  facilities of a "designated offshore securities market" (as
                  defined Rule 902 of Regulation S under the Securities Act) and
                  neither the Transferor nor any Person acting on its behalf
                  knows that the transaction was prearranged with a buyer in the
                  United States,


                                     F-3-1
<PAGE>

            (ii)  no directed selling efforts have been made in contravention of
                  the requirements of Rule 903 or Rule 904 of Regulation S under
                  the Securities Act, and

            (iii) the transaction is not part of a plan or scheme to evade the
                  registration requirements of the Securities Act.

            Upon consummation of the proposed transfer in accordance with the
terms of the Pooling and Servicing Agreement, the transferred beneficial
interest will be subject to the restrictions on transfer enumerated in the
legends printed on the Regulation S Global Certificates by which the Transferee
shall hold its interest and in the Pooling and Servicing Agreement and the
Securities Act.

         Dated:                                Very truly yours,
                                               [Name of Transferor]


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

<PAGE>

                                     ANNEX A

The Transferor owns and proposes to transfer a beneficial interest in the
following:

      (i)   G     Class [___] Rule 144A Global Certificate, principal amount of
                  $_____________,

      (ii)  G     Class [___] Rule 144A Global Certificate, principal amount of
                  $_____________, or

      (iii) G     Class [___] Rule 144A Global Certificate, principal amount of
                  $_____________.


                                     F-3-3
<PAGE>

                                                                     EXHIBIT F-4

                  FORM OF TRANSFER CERTIFICATE FOR EXCHANGE OR
                TRANSFER FROM REGULATION S GLOBAL CERTIFICATE TO
                          RULE 144A GLOBAL CERTIFICATE

JPMorgan Chase Bank, N.A.
as Trustee
4 New York Plaza, 6th Floor
New York, New York 10004

            Reference is hereby made to the Pooling and Servicing Agreement
("Pooling and Servicing Agreement"), dated as of January 1, 2005, among
Structured Asset Mortgage Investments II Inc., as Depositor, Wells Fargo Bank,
National Association, as Master Servicer and Securities Administrator, EMC
Mortgage Corporation, as Seller and Company and JPMorgan Chase Bank, N.A. as
Trustee. Capitalized terms used but not defined herein are used as defined in
the Pooling and Servicing Agreement:

            The undersigned (the "Transferor") owns and proposes to transfer the
interests in the Regulation S Global Certificates specified in Annex A hereto
(the "Certificates"), in the principal amounts in such Regulation S Global
Certificates (the "Transfer"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:

      (a)   the Transfer is being effected in accordance with transfer
            restrictions set forth in the Pooling and Servicing Agreement and
            the Certificates;

      (b)   the Transfer is being effected pursuant to and in accordance with
            Rule 144A under the Securities Act of 1933, as amended (the
            "Securities Act"), and, accordingly, the Transferor hereby further
            certifies that:

            (i)   the Transferee is purchasing the beneficial interest for its
                  own account, or for one or more accounts with respect to which
                  the Transferee exercises sole investment discretion,

            (ii)  the Transferor reasonably believes that the Transferee and
                  each such account is a "qualified institutional buyer" within
                  the meaning of Rule 144A, and

            (iii) the Transfer is in compliance with any applicable blue sky
                  securities laws of any state of the United States.


                                     F-4-1
<PAGE>

            Upon consummation of the proposed Transfer in accordance with the
terms of the Pooling and Servicing Agreement, the transferred beneficial
interest will be subject to the restrictions on transfer enumerated in the
legends printed on the Rule 144A Global Certificates by which the Transferee
shall hold its interest and in the Pooling and Servicing Agreement and the
Securities Act.

           Dated:                          Very truly yours,
                                           [Name of Transferor]


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

<PAGE>

                                     ANNEX A

The Transferor owns and proposes to transfer a beneficial interest in the
following:

      (i)   G     Class [___] Regulation S Global Certificate, principal amount
                  of $_____________,

      (ii)  G     Class [___] Regulation S Global Certificate, principal amount
                  of $_____________, or

      (iii) G     Class [___] Regulation S Global Certificate, principal amount
                  of $_____________.


                                     F-4-3
<PAGE>

                                                                       EXHIBIT G

                               CUSTODIAL AGREEMENT

            THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement'), dated as of January 28, 2005, by and among JPMORGAN
CHASE BANK, N.A. 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, 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, 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, as seller and company (the "Seller") have entered into a
Pooling and Servicing Agreement, dated as of January 1, 2005, relating to the
issuance of Prime Mortgage Trust, Mortgage Pass-Through Certificates, Series
2005-1 (as in effect on the date of this agreement, the "Original Pooling and
Servicing Agreement," and as amended and supplemented from time to time, the
"Pooling and Servicing Agreement'); and

            WHEREAS, the Custodian has agreed to act as agent for the Trustee
for the purposes of receiving and holding certain documents and other
instruments delivered by the 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 and Radian Asset Assurance Inc.

            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 the Holders of the Mortgage Pass-Through Certificates and Radian
Asset Assurance Inc., 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.


                                      G-2
<PAGE>

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

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


                                      G-3
<PAGE>

has delivered to the Custodian a certificate of a Servicing Officer certifying
as to the name and address of the Person to which such Mortgage File or such
document was delivered and the purpose or purposes of such delivery.

            At any time that a Servicer is required to deliver to the Custodian
a Request for Release, the Servicer shall deliver two copies of the Request for
Release if delivered in hard copy or the Servicer may furnish such Request for
Release electronically to the Custodian, in which event the Servicing Officer
transmitting the same shall be deemed to have signed the Request for Release. In
connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, such Request for Release shall be 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, representation or warranty by the Trustee and be returned to the
Seller provided, however, that in the case of a Mortgage Loan that is registered
on the MERS System, no assignment of mortgage or endorsement of the Mortgage
Note by the Trustee shall be required. 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.


                                      G-4
<PAGE>

                                  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, Radian Asset Assurance Inc. 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. Custodian May Own Mortgage Pass-Through Certificates.
The Custodian in its individual or any other capacity may become the owner or
pledgee of Mortgage Pass-Through Certificates with the same rights it would have
if it were not Custodian.

            Section 3.3. Master Servicer to Pay Custodian's Fees and Expenses.
The Master Servicer covenants and agrees to pay to the Custodian from time to
time, and the Custodian shall be entitled to, reasonable compensation for all
services rendered by it in the exercise and performance of any of the powers and
duties hereunder of the Custodian, and the Master Servicer will pay or reimburse
the Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its negligence or bad faith or to the extent that such cost or expense is
indemnified by the Depositor pursuant to the Pooling and Servicing Agreement.

            Section 3.4. 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, Radian Asset Assurance Inc. 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


                                      G-5
<PAGE>

satisfy the other requirements contained in Section 3.6 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 3.4 shall
become effective upon acceptance of appointment by the successor Custodian. The
Trustee shall give prompt notice to the Depositor, Radian Asset Assurance Inc.
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 3.5. 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 3.6. Representations of the Custodian. The Custodian hereby
represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.

                                   ARTICLE IV.
                            MISCELLANEOUS PROVISIONS

            Section 4.1. Notices. All notices, requests, consents and demands
and other communications required under this Agreement or pursuant to any other
instrument or document delivered hereunder shall be in writing and, unless
otherwise specifically provided, may be delivered personally, by telegram or
telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), or in the case of Radian Asset Assurance Inc., to 335 Madison
Avenue, New York, New York 10017 or by email at ABSRM@radian.biz, 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 WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.


                                      G-6
<PAGE>

            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-7
<PAGE>

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

Address:                                   JPMORGAN CHASE BANK, N.A. not
                                           individually but solely as Trustee
4 New York Plaza, 6th Floor
New York, New York 10004
                                           By:
                                             -----------------------------------
Attention:                                 Name:
Telecopy:                                  Title
Confirmation:


Address:                                   STRUCTURED ASSET MORTGAGE
                                           INVESTMENTS II INC.
383 Madison Avenue
New York, New York 10179
                                           By:
                                              ----------------------------------
                                           Name:
                                           Title:


Address:                                   WELLS FARGO BANK,
                                           NATIONAL ASSOCIATION, as Master
                                           Servicer

9062 Old Annapolis Road
Columbia, Maryland 21045                   By:
                                              ----------------------------------
                                           Name:  Stacey Taylor
                                           Title: Assistant Vice President


Address:                                   WELLS FARGO BANK,
                                           NATIONAL ASSOCIATION, as Custodian

9062 Old Annapolis Road
Columbia, Maryland 21045                   By:
                                              ----------------------------------
                                           Name:  Stacey Taylor
                                           Title: Assistant Vice President

<PAGE>

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

            On the 28th day of January 2005 before me, a notary public in and
for said State, personally appeared ______________, known to me to be a(n)
_____________ of JPMorgan Chase Bank, N.A. that executed the within instrument,
and also known to me to be the person who executed it on behalf of said
corporation and acknowledged to me that such corporation executed the within
instrument.

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


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

[SEAL]


                                      G-9
<PAGE>

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

            On the 28th day of January 2005 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, National Association, a national
banking association that executed the within instrument, and also known to me to
be the person who executed it on behalf of said national banking association,
and acknowledged to me that such national banking association executed the
within instrument.

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


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

[SEAL]


                                      G-10
<PAGE>

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

            On the 28th day of January 2005 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]


                                      G-11
<PAGE>

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

            On the 28th day of January 2005 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, National Association, one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

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


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

[Notarial Seal]


                                      G-12
<PAGE>

                                   EXHIBIT ONE

                     FORM OF CUSTODIAN INITIAL CERTIFICATION

                                                          January 28, 2005

JPMorgan Chase Bank, N.A.          Structured Asset Mortgage Investments II Inc.
4 New York Plaza, 6th Floor        383 Madison Avenue
New York, New York 10004-2477      New York, New York 10179

Radian Asset Assurance Inc.
335 Madison Avenue
New York, New York 10017

Attention: Structured Asset Mortgage Investments II Inc.
Prime Mortgage Trust, Mortgage Pass-Through Certificates, Series 2005-1

            Re:   Custodial Agreement, dated as of January 28, 2005, by and
                  among JPMorgan Chase Bank, N.A., Structured Asset Mortgage
                  Investments II Inc. and Wells Fargo Bank, National Association
                  relating to Prime Mortgage Trust 2005-1, Mortgage Pass-Through
                  Certificates, Series 2005-1

Ladies and Gentlemen:

            In accordance with Section 2.3(a) of the above-captioned Custodial
Agreement, and subject to Section 2.02(a) 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, NATIONAL ASSOCIATION


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


                                      G-13
<PAGE>

                                   EXHIBIT TWO

                     FORM OF CUSTODIAN INTERIM CERTIFICATION

                                                      ___________, 20__

JPMorgan Chase Bank, N.A.          Structured Asset Mortgage Investments II Inc.
4 New York Plaza, 6th Floor        383 Madison Avenue
New York, New York 10004-2477      New York, New York 10179

Radian Asset Assurance Inc.
335 Madison Avenue
New York, New York 10017

Attention: Structured Asset Mortgage Investments II Inc.
Prime Mortgage Trust, Mortgage Pass-Through Certificates, Series 2005-1

            Re:   Custodial Agreement, dated as of January 28, 2005, by and
                  among JPMorgan Chase Bank, N.A., Structured Asset Mortgage
                  Investments II Inc. and Wells Fargo Bank, National Association
                  relating to Prime Mortgage Trust 2005-1, Mortgage Pass-Through
                  Certificates, Series 2005-1

Ladies and Gentlemen:

            In accordance with Section 2.3(b) of the above-captioned Custodial
Agreement, and subject to Section 2.02(a) of the Pooling and Servicing
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 relate 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, NATIONAL ASSOCIATION


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


                                      G-14
<PAGE>

                                  EXHIBIT THREE

                      FORM OF CUSTODIAN FINAL CERTIFICATION

                                                     _______, 20__

JPMorgan Chase Bank, N.A.          Structured Asset Mortgage Investments II Inc.
4 New York Plaza, 6th Floor        383 Madison Avenue
New York, New York 10004-2477      New York, New York 10179

Radian Asset Assurance Inc.
335 Madison Avenue
New York, New York 10017

Attention: Structured Asset Mortgage Investments II Inc.
Prime Mortgage Trust 2005-1, Mortgage Pass-Through Certificates, Series 2005-1

            Re:   Custodial Agreement, dated as of January 28, 2005, by and
                  among JPMorgan Chase Bank, N.A., Structured Asset Mortgage
                  Investments II Inc. and Wells Fargo Bank, National Association
                  relating to Prime Mortgage Trust 2005-1, Mortgage Pass-Through
                  Certificates, Series 2005-1

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 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 relate to the Mortgage Loans identified 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 or in the
Pooling and Servicing Agreement, as applicable.

                                       WELLS FARGO BANK, NATIONAL ASSOCIATION


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


                                      G-15
<PAGE>

                                   SCHEDULE A

                             (Provided upon request)


                                      G-16
<PAGE>

                                                                     EXHIBIT H-1

                               SERVICING AGREEMENT

                           NATIONAL CITY MORTGAGE CO.

                             [provided upon request]


                                     H-1-1
<PAGE>

                                                                     EXHIBIT H-2

                               SERVICING AGREEMENT

                                       EMC

                             [provided upon request]


                                     H-2-1
<PAGE>

                                                                     EXHIBIT H-3

                               SERVICING AGREEMENT

                         HSBC MORTGAGE CORPORATION (USA)

                             [provided upon request]


                                     H-3-1
<PAGE>

                                                                     EXHIBIT H-4

                               SERVICING AGREEMENT

                            U.S. CENTRAL CREDIT UNION

                             [provided upon request]


                                     H-4-1
<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 28, 2005, 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 2005-1, Mortgage Pass-Through
Certificates, Series 2005-1 (the "Certificates"), under a pooling and servicing
agreement, to be dated as of January 1, 2005 (the "Pooling and Servicing
Agreement"), among the Purchaser, as depositor, Wells Fargo Bank, National
Association, as master servicer and securities administrator, JPMorgan Chase
Bank, N.A., 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 333-120916)
relating to its Mortgage Pass-Through Certificates and the offering of certain
series thereof (including certain classes of the Mortgage Pass-Through
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 Mortgage Pass-Through 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 25, 2005 to
the Prospectus, dated December 20, 2004, relating to certain classes of the
Mortgage Pass-Through 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 25,
2005 to an underwriting agreement dated January 25, 2005, between the Purchaser
and Bear Stearns (together, the "Underwriting Agreement").

            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:


                                      J-1
<PAGE>

            Acquisition Price: Cash in an amount equal to $______ (plus $______
in accrued interest)(2).

            Bear Stearns: Bear, Stearns & Co. Inc.

            Closing Date: January 28, 2005.

            Cut-off Date: January 1, 2005.

            Cut-off Date Balance: Shall mean $183,539,285.

            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, 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.

            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.

----------
(2)   Please contact Bear, Stearns & Co. Inc. for Purchase Price.


                                      J-2
<PAGE>

            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
anti-predatory lending laws.

            Rating Agencies: Fitch and S&P, 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 or S&P: 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.

            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 Mortgage Pass-Through Certificates will take
place on the Closing


                                      J-3
<PAGE>

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 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 and
Radian Asset Assurance Inc.. 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


                                      J-4
<PAGE>

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 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 Mortgage
Pass-Through 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


                                      J-5
<PAGE>

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 JPMorgan Chase Bank, N.A., 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 Mortgage Pass-Through 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 and Radian Asset Assurance Inc., 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 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


                                      J-6
<PAGE>

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.

            (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 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


                                      J-7
<PAGE>

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 an 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.

            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.


                                      J-8
<PAGE>

            (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) the information set forth in the Mortgage Loan Schedule
      attached hereto is true and correct in all material respects and the
      information provided to the Rating Agencies, 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


                                      J-9
<PAGE>

      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 anti-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
      anti-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 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


                                      J-10
<PAGE>

      equal with, the lien of such Mortgage except those which are insured
      against by the title insurance policy referred to in (xiii) below;

                  (ix) as of the Cut-off Date, 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) the Mortgaged Property is undamaged by waste, fire,
      earthquake or earth movement, windstorm, flood, tornado or other casualty
      so as to affect adversely the value of the Mortgaged Property as security
      for the Mortgage Loans or the use for which the premises were intended;
      and there is no proceeding pending or threatened for the total or partial
      condemnation of the related Mortgaged Property;

                  (xii) 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 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) 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
      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


                                      J-11
<PAGE>

      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;

                  (xv) 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);

                  (xvi) 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;

                  (xvii) 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;

                  (xviii) no loan is a High-Cost Home Loan under the New Jersey
      Home Ownership Security Act of 2002;

                  (xix) no loan in the transaction originated in New Mexico is a
      High-Cost Home Loan under the New Mexico Home Loan Protection Act;

                  (xx) the information set forth in Schedule A of the Prospectus
      Supplement with respect to the Mortgage Loans is true and correct in all
      material respects;

                  (xxi) no Mortgage Loan is a High Cost Loan or Covered Loan, as
      applicable (as such terms are defined in Standard & Poor's LEVELS(R)
      Glossary, Version 5.6 Revised, Appendix E, attached hereto as Exhibit 6)
      and no Mortgage Loan originated on or after October 1, 2002 through March
      6, 2003 is governed by the "Georgia Fair Lending Act";

                  (xxii) each Mortgage Loan was originated in accordance with
      the underwriting guidelines of the related originator;

                  (xxiii) each original Mortgage has been recorded or is in the
      process of being recorded in accordance with the requirements of Section
      2.01 of the Pooling and Servicing Agreement in the appropriate
      jurisdictions wherein such recordation is required to perfect the lien
      thereof for the benefit of the Trust Fund;


                                      J-12
<PAGE>

                  (xxiv) the related Mortgage File contains each of the
      documents and instruments listed in Section 2.01 of the Pooling and
      Servicing Agreement, subject to any exceptions, substitutions and
      qualifications as are set forth in such Section;

                  (xxv) the Mortgage Loans are currently being serviced in
      accordance with accepted servicing practices; and

                  (xxvi) 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 which was acceptable to Fannie Mae or FHLMC at the time of
      origination.

            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 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.


                                      J-13
<PAGE>

            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;

            (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


                                      J-14
<PAGE>

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 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


                                      J-15
<PAGE>

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:

                  (i) 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;
      and the Purchaser shall have received certificates to that effect signed
      by authorized officers of the Mortgage Loan Seller.

                  (ii) 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:

                        (1) If required pursuant to Section 3 hereof, the
            Amendment dated as of the Closing Date and any documents referred to
            therein;

                        (2) 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;


                                      J-16
<PAGE>

                        (3) 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;

                        (4) 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;

                        (5) 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;

                        (6) 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

                        (7) 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.

                  (iii) 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.

                  (iv) 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.

            (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:

                  (i) 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.

                  (ii) The Mortgage Loan Seller shall have received copies of
      all of the following closing documents, in such forms as are agreed upon
      and reasonably


                                      J-17
<PAGE>

      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:

                        (1) If required pursuant to Section 3 hereof, the
            Amendment dated as of the Closing Date and any documents referred to
            therein;

                        (2) 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;

                        (3) 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;

                        (4) One or more opinions of counsel from the Purchaser's
            counsel in form and substance reasonably satisfactory to the
            Mortgage Loan Seller;

                        (5) 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 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


                                      J-18
<PAGE>

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 or any 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 such Master Servicer, Servicer or
Servicers, as applicable, 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 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.


                                      J-19
<PAGE>

            (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 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


                                      J-20
<PAGE>

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 Mortgage Pass-Through 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 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


                                      J-21
<PAGE>

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 GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.

            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.

            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


                                      J-22
<PAGE>

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 force and effect its existence, all 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 necessary to perform its 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-23
<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:  Dana Dillard
                                       Title: Senior Vice President


                                       STRUCTURED ASSET MORTGAGE
                                       INVESTMENTS II INC.

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

<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.

            (f) 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 "JPMorgan Chase Bank, N.A., 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;


                                    J-E-1-1
<PAGE>

            (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.

      (g) 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-E-1-2
<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;

(l)   the first payment date;

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

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

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

(p)   paid-through date;

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

(r)   the Gross Margin, if applicable;

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

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

(u)   the Periodic Rate Cap, if applicable;

(v)   the number of days delinquent, if any;


                                    J-E-2-1-
<PAGE>

(w)   which Mortgage Loans adjust after an initial fixed-rate period of three,
      five, seven or ten years;

(x)   the Loan Group; and

(y)   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-E-2-2-
<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-E-3-1
<PAGE>

                                    EXHIBIT 4

                             PURCHASER'S INFORMATION

            All information in the Prospectus Supplement and the Prospectus,
except the Mortgage Loan Seller's Information.


                                    J-E-4-1
<PAGE>

                                    EXHIBIT 5

                             SCHEDULE OF LOST NOTES

                             Available Upon Request


                                     J-E-5-1
<PAGE>

                                    EXHIBIT 6

                                                        REVISED October 18, 2004

APPENDIX E - Standard & Poor's Anti-Predatory Lending Categorization

Standard & Poor's has categorized loans governed by anti-predatory lending laws
in the Jurisdictions listed below into three categories based upon a combination
of factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan Category because they included thresholds and
tests that are typical of what is generally considered High Cost by the
industry.

Standard & Poor's High Cost Loan Categorization

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                                                     Category under
                                       Name of Anti-Predatory Lending               Applicable Anti-
       State/Jurisdiction                     Law/Effective Date                 Predatory Lending Law
       ------------------                     ------------------                 ---------------------
------------------------------------------------------------------------------------------------------------
<S>                               <C>                                           <C>
Arkansas                          Arkansas Home Loan Protection Act,            High Cost Home Loan
                                  Ark. Code Ann. ss.ss. 23-53-101 et seq.

                                  Effective July 16, 2003
------------------------------------------------------------------------------------------------------------
Cleveland Heights, OH             Ordinance No. 72-2003 (PSH), Mun.             Covered Loan
                                  Code ss.ss. 757.01 et seq.

                                  Effective June 2, 2003
------------------------------------------------------------------------------------------------------------
Colorado                          Consumer Equity Protection, Colo.             Covered Loan
                                  Stat. Ann. ss.ss. 5-3.5-101 et seq.

                                  Effective for covered loans offered
                                  or entered into on or after January
                                  1, 2003. Other provisions of the Act
                                  took effect on June 7, 2002
------------------------------------------------------------------------------------------------------------
Connecticut                       Connecticut Abusive Home Loan                 High Cost Home Loan
                                  Lending Practices Act, Conn. Gen.
                                  Stat. ss.ss. 36a-746 et seq.

                                  Effective October 1, 2001
------------------------------------------------------------------------------------------------------------
District of Columbia              Home Loan Protection Act, D.C. Code           Covered Loan
                                  ss.ss. 26-1151.01 et seq.

                                  Effective for loans closed on or after
                                  January 28, 2003
------------------------------------------------------------------------------------------------------------
Florida                           Fair Lending Act, Fla. Stat. Ann.             High Cost Home Loan
                                  ss.ss. 494.0078 et seq.

                                  Effective October 2, 2002
------------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 -           Georgia Fair Lending Act, Ga. Code            High Cost Home Loan
Mar. 6, 2003)                     Ann. ss.ss. 7-6A-1 et seq.

                                  Effective October 1, 2002 - March 6, 2003
------------------------------------------------------------------------------------------------------------
</TABLE>


                                     J-E-6-1
<PAGE>

Standard & Poor's High Cost Loan Categorization

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                                                     Category under
                                       Name of Anti-Predatory Lending               Applicable Anti-
       State/Jurisdiction                     Law/Effective Date                 Predatory Lending Law
       ------------------                     ------------------                 ---------------------
--------------------------------------------------------------------------------------------------------------
<S>                               <C>                                           <C>
Georgia as amended                Georgia Fair Lending Act, Ga. Code            High Cost Home Loan
(Mar. 7, 2003 - current)          Ann. ss.ss. 7-6A-1 et seq.

                                  Effective for loans closed on or
                                  after March 7, 2003
--------------------------------------------------------------------------------------------------------------
HOEPA Section 32                  Home Ownership and Equity Protection          High Cost Loan
                                  Act of 1994, 15 U.S.C. ss. 1639, 12
                                  C.F.R. ss.ss. 226.32 and 226.34

                                  Effective October 1, 1995,
                                  amendments October 1, 2002
--------------------------------------------------------------------------------------------------------------
Illinois                          High Risk Home Loan Act, Ill. Comp.           High Risk Home Loan
                                  Stat. tit. 815, ss.ss. 137/5 et seq.

                                  Effective January 1, 2004 (prior to
                                  this date, regulations under
                                  Residential Mortgage License Act
                                  effective from May 14, 2001)
--------------------------------------------------------------------------------------------------------------
Indiana                           Indiana Home Loan Practices Act,              High Cost Home Loan
                                  Ind. Code Ann. ss.ss. 24-9-1-1 et seq.

                                  Effective for loans originated on or
                                  after January 1, 2005.
--------------------------------------------------------------------------------------------------------------
Kansas                            Consumer Credit Code, Kan. Stat.              High Loan to Value Consumer
                                  Ann. ss.ss. 16a-1-101 et seq.                 Loan (id. ss. 16a-3-207) and;

                                  Sections 16a-1-301 and 16a-3-207              High APR Consumer Loan
                                  became effective April 14, 1999;              (id. ss. 16a-3-308a)
                                  Section 16a-3-308a became effective
                                  July 1, 1999
--------------------------------------------------------------------------------------------------------------
Kentucky                          2003 KY H.B. 287 - High Cost Home             High Cost Home Loan
                                  Loan Act, Ky. Rev. Stat. ss.ss.
                                  360.100 et seq.

                                  Effective June 24, 2003
--------------------------------------------------------------------------------------------------------------
Maine                             Truth in Lending, Me. Rev. Stat.              High Rate High Fee Mortgage
                                  tit. 9-A, ss.ss. 8-101 et seq.

                                  Effective September 29, 1995 and as
                                  amended from time to time
--------------------------------------------------------------------------------------------------------------
</TABLE>


                                     J-E-6-2
<PAGE>

Standard & Poor's High Cost Loan Categorization

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                                             Category under
                                       Name of Anti-Predatory Lending                       Applicable Anti-
       State/Jurisdiction                     Law/Effective Date                         Predatory Lending Law
       ------------------                     ------------------                         ---------------------
----------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                  <C>
Massachusetts                     Part 40 and Part 32, 209 C.M.R. ss.ss. 32.00 et      High Cost Home Loan
                                  seq. and 209 C.M.R. ss.ss. 40.01 et seq.

                                  Effective March 22, 2001 and amended
                                  from time to time
----------------------------------------------------------------------------------------------------------------------
                                  Massachusetts Predatory Home Loan                    High Cost Home Mortgage Loan
                                  Practices Act Mass. Gen. Laws ch.
                                  183C, ss.ss. 1 et seq.

                                  Effective November 7, 2004
----------------------------------------------------------------------------------------------------------------------
Nevada                            Assembly Bill No. 284, Nev. Rev. Stat. ss.ss.        Home Loan
                                  598D.010 et seq.

                                  Effective October 1, 2003
----------------------------------------------------------------------------------------------------------------------
New Jersey                        New Jersey Home Ownership Security Act of 2002,      High Cost Home Loan
                                  N.J. Rev. Stat. ss.ss. 46:10I-B-22 et seq.

                                  Effective for loans closed on or after November
                                  27, 2003
----------------------------------------------------------------------------------------------------------------------
New Mexico                        Home Loan Protection Act, N.M. Rev. Stat. ss.ss.     High Cost Home Loan
                                  58-21A-1 et seq.

                                  Effective as of January 1, 2004; Revised as of
                                  February 26, 2004
----------------------------------------------------------------------------------------------------------------------
New York                          N.Y. Banking Law Article 6-l                         High Cost Home Loan

                                  Effective for applications made on or after
                                  April 1, 2003
----------------------------------------------------------------------------------------------------------------------
North Carolina                    Restrictions and Limitations on High Cost Home       High Cost Home Loan
                                  Loans, N.C. Gen. Stat. ss.ss. 24-1.1E et seq.

                                  Effective July 1, 2000; amended October 1,
                                  2003 (adding open-end lines of credit)
----------------------------------------------------------------------------------------------------------------------
Ohio                              H.B. 386 (codified in various sections of the        Covered Loan
                                  Ohio Code), Ohio Rev. Code Ann. ss.ss. 1349.25
                                  et seq.

                                  Effective May 24, 2002
----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                     J-E-6-3
<PAGE>

Standard & Poor's High Cost Loan Categorization

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                                             Category under
                                       Name of Anti-Predatory Lending                       Applicable Anti-
       State/Jurisdiction                     Law/Effective Date                         Predatory Lending Law
       ------------------                     ------------------                         ---------------------
----------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                  <C>
Oklahoma                          Consumer Credit Code (codified in various            Subsection 10 Mortgage
                                  sections of Title 14A)

                                  Effective July 1, 2000; amended effective
                                  January 1, 2004
----------------------------------------------------------------------------------------------------------------------
South Carolina                    South Carolina High Cost and Consumer Home           High Cost Home Loan
                                  Loans Act, S.C. Code Ann. ss.ss. 37-23-10 et seq.

                                  Effective for loans taken on or after January
                                  1, 2004
----------------------------------------------------------------------------------------------------------------------
West Virginia                     West Virginia Residential Mortgage Lender,           West Virginia Mortgage Loan
                                  Broker and Servicer Act, W. Va. Code Ann. ss.ss.     Act Loan
                                  31-17-1 et seq.

                                  Effective June 5, 2002
----------------------------------------------------------------------------------------------------------------------
</TABLE>

Standard & Poor's Covered Loan Categorization

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                                             Category under
                                       Name of Anti-Predatory Lending                       Applicable Anti-
       State/Jurisdiction                     Law/Effective Date                         Predatory Lending Law
       ------------------                     ------------------                         ---------------------
----------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                  <C>
Georgia (Oct. 1, 2002 -           Georgia Fair Lending Act, Ga. Code Ann.              Covered Loan
Mar. 6, 2003)                     ss.ss. 7-6A-1 et seq.

                                  Effective October 1, 2002 - March 6, 2003
----------------------------------------------------------------------------------------------------------------------
New Jersey                        New Jersey Home Ownership  Security Act of 2002,     Covered Home Loan
                                  N.J. Rev. Stat. ss.ss. 46:10I-B-22 et seq.

                                  Effective November 27, 2003 - July 5, 2004
----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                     J-E-6-4
<PAGE>

Standard & Poor's Home Loan Categorization

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                                                    Category under
                                       Name of Anti-Predatory Lending                              Applicable Anti-
       State/Jurisdiction                     Law/Effective Date                                Predatory Lending Law
       ------------------                     ------------------                                ---------------------
----------------------------------------------------------------------------------------------------------------------
<S>                               <C>                                                         <C>
Georgia (Oct. 1, 2002 -          Georgia Fair Lending Act, Ga. Code Ann. ss.ss. 7-6A-1        Home Loan
Mar. 6, 2003)                    et seq.

                                 Effective October 1, 2002 - March 6, 2003
----------------------------------------------------------------------------------------------------------------------
Indiana                          Indiana Home Loan Practices Act, Ind. Code Ann.              Home Loan
                                 ss.ss. 24-9-1-1 et seq.

                                 Effective for loans originated on or after January
                                 1, 2005.
----------------------------------------------------------------------------------------------------------------------
New Jersey                       New Jersey Home Ownership Security Act of 2002,              Home Loan
                                 N.J. Rev. Stat. ss.ss. 46:10I-B-22 et seq.

                                 Effective for loans closed on or after November
                                 27, 2003
----------------------------------------------------------------------------------------------------------------------
New Mexico                       Home Loan Protection Act, N.M. Rev. Stat. ss.ss.             Home Loan
                                 58-21A-1 et seq.

                                 Effective as of January 1, 2004; Revised as of
                                 February 26, 2004
----------------------------------------------------------------------------------------------------------------------
North Carolina                   Restrictions and Limitations on High Cost Home               Consumer Home Loan
                                 Loans, N.C. Gen. Stat. ss.ss. 24-1.1E et seq.

                                 Effective July 1, 2000; amended October 1, 2003
                                 (adding open-end lines of credit)
----------------------------------------------------------------------------------------------------------------------
South Carolina                   South Carolina High Cost and Consumer Home Loans             Consumer Home Loan
                                 Act, S.C. Code Ann. ss.ss. 37-23-10 et seq.

                                 Effective for loans taken on or after January 1,
                                 2004
----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                     J-E-6-5
<PAGE>

                                     SCHEDULE A

                  REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES

                                Public Certificates

             Class                         Fitch                      S&P
-------------------------------        -------------           ----------------

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-A-5....................             AAA                       AAA
Class I-A-6....................             AAA                       AAA
Class I-A-7....................             AAA                       AAA
Class I-A-8....................             AAA                       AAA
Class I-PO.....................             AAA                       AAA
Class I-R......................             AAA                       AAA
Class I-B-1....................             AA                         --
Class I-B-2....................              A                         --
Class I-B-3....................             BBB                        --

None of the above ratings have been lowered since the respective dates of such
letters.

                              Private Certificates

            Class                         Fitch
-------------------------------        ----------

Class I-B-4....................             BB
Class I-B-5....................              B
Class I-B-6....................             --

None of the above ratings have been lowered since the respective dates of such
letters.


                                      A-1
<PAGE>

                                   SCHEDULE B

                             MORTGAGE LOAN SCHEDULE

                             [Provided upon request]


                                      B-1

<PAGE>

                                                                       EXHIBIT K

                      Certificate Guaranty Insurance Policy
                             (Provided upon request)


                                      K-1