Document:

STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
                                    DEPOSITOR

                         U.S. BANK NATIONAL ASSOCIATION
                                     TRUSTEE

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

                                       and

                            EMC MORTGAGE CORPORATION
                               SELLER AND COMPANY

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

                         POOLING AND SERVICING AGREEMENT

                             Dated as of May 1, 2004

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

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

                                  Series 2004-3

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                                                 TABLE OF CONTENTS

                                                                                                               Page
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                                                     ARTICLE I
                                                    Definitions

                                                     ARTICLE II
                                           Conveyance of Mortgage Loans;
                                         Original Issuance of Certificates
         Section 2.01      CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE...............................................36
         Section 2.02      ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE...............................................39
         Section 2.03      ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE AGREEMENT........................41
         Section 2.04      SUBSTITUTION OF MORTGAGE LOANS........................................................42
         Section 2.05      ISSUANCE OF CERTIFICATES..............................................................43
         Section 2.06      REPRESENTATIONS AND WARRANTIES CONCERNING THE DEPOSITOR...............................43

                                                    ARTICLE III
                                  Administration and Servicing of Mortgage Loans
         Section 3.01      MASTER SERVICER.......................................................................45
         Section 3.02      REMIC-RELATED COVENANTS...............................................................46
         Section 3.03      MONITORING OF SERVICERS...............................................................46
         Section 3.04      FIDELITY BOND.........................................................................47
         Section 3.05      POWER TO ACT; PROCEDURES..............................................................47
         Section 3.06      DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS............................................48
         Section 3.07      RELEASE OF MORTGAGE FILES.............................................................48
         Section 3.08      DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER
                           TO BE HELD FOR TRUSTEE................................................................49
         Section 3.09      STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES................................50
         Section 3.10      PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS......................................50
         Section 3.11      MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE POLICIES................................50
         Section 3.12      TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE POLICIES AND
                           DOCUMENTS.............................................................................51
         Section 3.13      REALIZATION UPON DEFAULTED MORTGAGE LOANS.............................................51
         Section 3.14      COMPENSATION FOR THE MASTER SERVICER..................................................51
         Section 3.15      REO PROPERTY..........................................................................52
         Section 3.16      ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.........................................52
         Section 3.17      ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT......................................53
         Section 3.18      REPORTS FILED WITH SECURITIES AND EXCHANGE COMMISSION.................................53
         Section 3.19      THE COMPANY...........................................................................54
         Section 3.20      UCC...................................................................................54
         Section 3.21      OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.........................................54
         Section 3.22      RESERVED..............................................................................55

                                                        -i-

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                                                    ARTICLE IV
                                                     Accounts
         Section 4.01      PROTECTED ACCOUNTS....................................................................56
         Section 4.02      MASTER SERVICER COLLECTION ACCOUNT....................................................57
         Section 4.03      PERMITTED WITHDRAWALS AND TRANSFERS FROM THE MASTER SERVICER
                           COLLECTION ACCOUNT....................................................................58
         Section 4.04      DISTRIBUTION ACCOUNT..................................................................59
         Section 4.05      PERMITTED WITHDRAWALS AND TRANSFERS FROM THE DISTRIBUTION ACCOUNT.....................59

                                                     ARTICLE V
                                                   Certificates
         Section 5.01      CERTIFICATES..........................................................................62
         Section 5.02      REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.................................68
         Section 5.03      MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.....................................71
         Section 5.04      PERSONS DEEMED OWNERS.................................................................72
         Section 5.05      TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES........................................72
         Section 5.06      RESTRICTIONS ON TRANSFERABILITY OF CERTIFICATES.......................................73
         Section 5.07      ERISA RESTRICTIONS....................................................................73
         Section 5.08      RULE 144A INFORMATION.................................................................75

                                                    ARTICLE VI
                                          Payments to Certificateholders
         Section 6.01      DISTRIBUTIONS ON THE CERTIFICATES.....................................................76
         Section 6.02      ALLOCATION OF LOSSES..................................................................79
         Section 6.03      PAYMENTS..............................................................................81
         Section 6.04      STATEMENTS TO CERTIFICATEHOLDERS......................................................82
         Section 6.05      MONTHLY ADVANCES......................................................................84
         Section 6.06      COMPENSATING INTEREST PAYMENTS........................................................85

                                                    ARTICLE VII
                                                The Master Servicer
         Section 7.01      LIABILITIES OF THE MASTER SERVICER....................................................86
         Section 7.02      MERGER OR CONSOLIDATION OF THE MASTER SERVICER........................................86
         Section 7.03      INDEMNIFICATION OF THE TRUSTEE, THE MASTER SERVICER AND THE
                           SECURITIES ADMINISTRATOR..............................................................86
         Section 7.04      LIMITATIONS ON LIABILITY OF THE MASTER SERVICER AND OTHERS............................87
         Section 7.05      MASTER SERVICER NOT TO RESIGN.........................................................88
         Section 7.06      SUCCESSOR MASTER SERVICER.............................................................88
         Section 7.07      SALE AND ASSIGNMENT OF MASTER SERVICING...............................................88

                                                   ARTICLE VIII
                                                      Default
         Section 8.01      EVENTS OF DEFAULT.....................................................................90
         Section 8.02      TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR..............................................91
         Section 8.03      NOTIFICATION TO CERTIFICATEHOLDERS....................................................92

                                                       -ii-

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         Section 8.04      WAIVER OF DEFAULTS....................................................................92
         Section 8.05      LIST OF CERTIFICATEHOLDERS............................................................93

                                                    ARTICLE IX
                              Concerning the Trustee and the Securities Administrator
         Section 9.01      DUTIES OF TRUSTEE.....................................................................94
         Section 9.02      CERTAIN MATTERS AFFECTING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR................96
         Section 9.03      TRUSTEE AND SECURITIES ADMINISTRATOR NOT LIABLE FOR CERTIFICATES OR
                           MORTGAGE LOANS........................................................................97
         Section 9.04      TRUSTEE AND SECURITIES ADMINISTRATOR MAY OWN CERTIFICATES.............................98
         Section 9.05      TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND EXPENSES............................98
         Section 9.06      ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES ADMINISTRATOR.....................98
         Section 9.07      INSURANCE.............................................................................99
         Section 9.08      RESIGNATION AND REMOVAL OF THE TRUSTEE AND SECURITIES ADMINISTRATOR...................99
         Section 9.09      SUCCESSOR TRUSTEE AND SUCCESSOR SECURITIES ADMINISTRATOR.............................100
         Section 9.10      MERGER OR CONSOLIDATION OF TRUSTEE OR SECURITIES ADMINISTRATOR.......................101
         Section 9.11      APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE........................................101
         Section 9.12      FEDERAL INFORMATION RETURNS AND REPORTS TO CERTIFICATEHOLDERS;
                           REMIC ADMINISTRATION.................................................................102

                                                     ARTICLE X
                                                    Termination
         Section 10.01     TERMINATION UPON REPURCHASE BY THE DEPOSITOR OR ITS DESIGNEE OR
                           LIQUIDATION OF THE MORTGAGE LOANS....................................................104
         Section 10.02     ADDITIONAL TERMINATION REQUIREMENTS..................................................106

                                                    ARTICLE XI
                                             Miscellaneous Provisions
         Section 11.01     INTENT OF PARTIES....................................................................108
         Section 11.02     AMENDMENT............................................................................108
         Section 11.03     RECORDATION OF AGREEMENT.............................................................109
         Section 11.04     LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS...........................................109
         Section 11.05     ACTS OF CERTIFICATEHOLDERS...........................................................110
         Section 11.06     GOVERNING LAW........................................................................111
         Section 11.07     NOTICES..............................................................................111
         Section 11.08     SEVERABILITY OF PROVISIONS...........................................................111
         Section 11.09     SUCCESSORS AND ASSIGNS...............................................................111
         Section 11.10     ARTICLE AND SECTION HEADINGS.........................................................112
         Section 11.11     COUNTERPARTS.........................................................................112
         Section 11.12     NOTICE TO RATING AGENCIES............................................................112
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                                    EXHIBITS

Exhibit A-1               -    Form of Class A Certificates
Exhibit A-2               -    Form of Class B Certificates

                                      -iii-

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

                                      -iv-

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

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

                              PRELIMINARY STATEMENT

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

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

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

         The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $1,506,813,223.95. The initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance. The Group I
Mortgage Loans will have an Outstanding Principal Balance as of the Cut-off
Date, after deducting all Scheduled Principal due on or before the Cut-off Date,
of $376,984,792.96. The Group II Mortgage Loans will have an Outstanding
Principal Balance as of the Cut-off Date, after deducting all Scheduled
Principal due on or before the Cut-off Date, of $640,030,772.44. The Group III
Mortgage Loans will have an Outstanding Principal Balance as of the Cut-off
Date, after deducting all Scheduled Principal due on or before the Cut-off Date,
of $204,303,580.57. The Group IV 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 $285,494,077.98.

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

<PAGE>

                                    ARTICLE I
                                   Definitions

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

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

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

         ACCRUED CERTIFICATE INTEREST: For any Certificate for any Distribution
Date, the interest accrued during the related Interest Accrual Period at the
applicable Pass-Through Rate on the Current Principal Amount, of such
Certificate immediately prior to such Distribution Date, on the basis of a
360-day year consisting of twelve 30-day months, less (i) in the case of a
Senior Certificate, such Certificate's share of any Net Interest Shortfall from
the related Mortgage Loans and, after the Cross-Over Date, the interest portion
of any Realized Losses on the related Mortgage Loans allocated thereto in
accordance with Section 6.02(g) and (ii) in the case of a Subordinate
Certificate, such Certificate's share of any Net Interest Shortfall from the
related Mortgage Loans and the interest portion of any Realized Losses on the
related Mortgage Loans allocated thereto in accordance with Section 6.02(g).

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

         AGGREGATE EXPENSE RATE: With respect to any Mortgage Loan, the sum of
the Servicing Fee Rate and the Lender-Paid PMI Rate (if applicable).

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

                                       -2-

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

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

         (b) as to any Distribution Date and amounts distributable pursuant to
clauses (ii), (iii) and (v) of the definition of Subordinate Optimal Principal
Amount, and as to each Class of Subordinate Certificates (other than the Class
of Subordinate Certificates having the lowest numerical designation as to which
the Class Prepayment Distribution Trigger shall not be applicable) for which (x)
the 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 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 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 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 S&P or Aaa in the case of Moody's. For any
short-term deposit or security, or a rating of A-l+ in the case of S&P or P-1 in
the case of Moody's.

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

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

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

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

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

                                       -3-

<PAGE>

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

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

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

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

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

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

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

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

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

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

         CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.

         CERTIFICATEHOLDER: A Holder of a Certificate.

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

                                       -4-

<PAGE>

         CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Subordinate
Certificates for any Distribution Date, the Class Prepayment Distribution
Trigger is satisfied if the fraction (expressed as a percentage), the numerator
of which is the aggregate Current Principal Amount of such Class and each Class
of Subordinate Certificates subordinate thereto, if any, and the denominator of
which is the Scheduled Principal Balance of all of the Mortgage Loans as of the
related Due Date, equals or exceeds such percentage calculated as of the Closing
Date.

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

         CLOSING DATE: May 28, 2004.

         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 Trust Fund.

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

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

         CORPORATE TRUST OFFICE: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at U.S. Bank Corporate
Trust Services, One Federal Street, 3rd Floor, Boston, Massachusetts 02110,

                                       -5-

<PAGE>

Attention: Corporate Trust Services/BART Series 2004-3. For purposes of
registration and transfer and exchange only, the Corporate Trust Office shall be
located at U.S. Bank National Association, 60 Livingston Avenue, Bond Drop
Window, St. Paul, Minnesota 55107.

         COUNTRYWIDE: Countrywide Home Loans, Inc., or its successor in
interest.

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

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

         CURRENT PRINCIPAL AMOUNT: With respect to any Certificate as of any
Distribution Date, the initial principal amount of such Certificate plus any
Subsequent Recoveries added to the Current Principal Amount of such Certificate
pursuant to Section 6.02(h), and reduced by (i) all amounts distributed on
previous Distribution Dates on such Certificate with respect to principal, (ii)
the principal portion of all Realized Losses allocated prior to such
Distribution Date to such Certificate, taking account of the Loss Allocation
Limitation and (iii) in the case of a Subordinate Certificate, such
Certificate's pro rata share, if any, of the applicable Subordinate Certificate
Writedown Amount for previous Distribution Dates. With respect to any Class of
Certificates, the Current Principal Amount thereof will equal the sum of the
Current Principal Amounts of all Certificates in such Class. Notwithstanding the
foregoing, solely for purposes of giving consents, directions, waivers,
approvals, requests and notices, the Class R-I Certificates and Class R-II
Certificates after the Distribution Date on which they each receive the
distribution of the last dollar of their respective original principal amount
shall be deemed to have Current Principal Amounts equal to their respective
Current Principal Amounts on the day immediately preceding such Distribution
Date.

         CUSTODIAL 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, National Association, or any successor
custodian appointed pursuant to the provisions hereof and of the Custodial
Agreement.

         CUT-OFF DATE: May 1, 2004.

         CUT-OFF DATE BALANCE: $1,506,813,223.95.

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

         DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding

                                       -6-

<PAGE>

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.

         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 "U.S. Bank
National Association, as Trustee f/b/o holders of Structured Asset Mortgage
Investments II Inc., Bear Stearns ARM Trust, Mortgage Pass-Through Certificates,
Series 2004-3 - Distribution Account." The Distribution Account shall be an
Eligible Account.

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

                                       -7-

<PAGE>

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

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

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

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

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

         E-LOAN: E-Loan, Inc., or its successor in interest.

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

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

         EVERHOME: EverHome Mortgage Company, formerly known as Alliance
Mortgage Company, or its successor in interest.

                                       -8-

<PAGE>

         EVERHOME SERVICING AGREEMENTS: With respect to the Mortgage Loans
originated by E-Loan and Loancity, the Subservicing Agreement dated as of August
1, 2002 between the Seller and EverHome, and with respect to the Mortgage Loans
originated by EverHome, the Servicing Agreement dated as of March 31, 2003
between the Seller and EverHome, each attached hereto as Exhibit H-2, as
modified by the related Assignment Agreement.

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

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

         FDIC: Federal Deposit Insurance Corporation or any successor thereto.

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

         FRACTIONAL UNDIVIDED INTEREST: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount of such
Certificate and the denominator of which is the Current Principal Amount of such
Class. With respect to the Certificates in the aggregate, the fractional
undivided interest evidenced by (i) each class of Residual Certificates will be
deemed to equal 0.25% and (ii) a Certificate of any other Class will be deemed
to equal 99.50% multiplied by a fraction, the numerator of which is the Current
Principal Amount of such Certificate and the denominator of which is the
aggregate Current Principal Amount of all the Certificates.

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

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

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

         GROUP I AVAILABLE FUNDS, GROUP II AVAILABLE FUNDS, GROUP III AVAILABLE
FUNDS AND GROUP IV AVAILABLE FUNDS: With respect to any Distribution Date, an
amount equal to the aggregate of the following amounts with respect to the
Mortgage Loans in the related Loan Group: (a) all previously

                                       -9-

<PAGE>

undistributed payments on account of principal (including the principal portion
of Scheduled Payments, Principal Prepayments and the principal portion of Net
Liquidation Proceeds) and all previously undistributed payments on account of
interest received after the Cut-off Date and on or prior to the related
Determination Date, (b) any Monthly Advances and Compensating Interest Payments
by the Servicers or the Master Servicer with respect to such Distribution Date
and (c) any reimbursed amount in connection with losses on investments of
deposits in an account, except:

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

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

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

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

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

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

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

                  (viii) any fees payable under any lender-paid primary mortgage
insurance policy; and

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

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

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

         GROUP I SENIOR OPTIMAL PRINCIPAL AMOUNT, GROUP II SENIOR OPTIMAL
PRINCIPAL AMOUNT, GROUP III SENIOR OPTIMAL PRINCIPAL AMOUNT AND GROUP IV SENIOR
OPTIMAL PRINCIPAL AMOUNT: With respect to each Distribution Date, an amount
equal to the sum, without duplication, of the following

                                      -10-

<PAGE>

(but in no event greater than the aggregate Current Principal Amount of the
Group I, Group II, Group III or Group IV Senior Certificates, as applicable,
immediately prior to such Distribution Date):

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

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

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

                  (iv) the lesser of (a) the applicable Senior Prepayment
Percentage of the sum of (A) all Net Liquidation Proceeds allocable to principal
received in respect of each Mortgage Loan in the related Loan Group which became
a Liquidated Mortgage Loan during the related Prepayment Period (other than
Mortgage Loans described in the immediately following clause (B)) and all
Subsequent Recoveries received in respect of each Liquidated Mortgage Loan in
the related Loan Group during the related Due Period and (B) the Scheduled
Principal Balance of each such Mortgage Loan in the related Loan Group purchased
by an insurer from the Trustee during the related Prepayment Period pursuant to
the related Primary Mortgage Insurance Policy, if any, or otherwise; and (b) the
applicable Senior Percentage of the sum of (A) the Scheduled Principal Balance
of each Mortgage Loan in the related Loan Group which became a Liquidated
Mortgage Loan during the related Prepayment Period (other than the Mortgage
Loans described in the immediately following clause (B)) and (B) the Scheduled
Principal Balance of each such Mortgage Loan in the related Loan Group that was
purchased by an insurer from the Trust during the related Prepayment Period
pursuant to the related Primary Mortgage Insurance Policy, if any or otherwise;
and

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

         GROUP I SENIOR PERCENTAGE: Initially, 96.15%. On any Distribution Date,
the lesser of (i) 100% and (ii) the percentage (carried to six places rounded
up) obtained by dividing the aggregate Current Principal Amount of the Group I
Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group I Mortgage Loans as of the
beginning of the related Due Period.

                                      -11-

<PAGE>

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

<TABLE>
<CAPTION>

Period (dates inclusive)                              Group I Senior Prepayment Percentage
------------------------                              ------------------------------------
<S>                                                   <C>
June 25, 2004 - May 25, 2011                          100%
June 25, 2011 - May 25, 2012                          Group I Senior Percentage plus 70% of the Group I
                                                      Subordinate Percentage
June 25, 2012 - May 25, 2013                          Group I Senior Percentage plus 60% of the Group I
                                                      Subordinate Percentage
June 25, 2013 - May 25, 2014                          Group I Senior Percentage plus 40% of the Group I
                                                      Subordinate Percentage
June 25, 2014 - May 25, 2015                          Group I Senior Percentage plus 20% of the Group I
                                                      Subordinate Percentage
June 25, 2015 and thereafter                          Group I Senior Percentage
</TABLE>

         In addition, no reduction of the Group I Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including June 2011 and May 2012, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including June 2012 and May
2013, (c) 40% of the Original Subordinate Principal Balance if such Distribution
Date occurs between and including June 2013 and May 2014, (d) 45% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including June 2014 and May 2015, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after June 2015.

         In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and such Mortgage Loans
with respect to which the related Mortgaged Property has been acquired by the
Trust), averaged over the last six months, as a percentage of the aggregate
Current Principal Amount of the Subordinate Certificates does not exceed 50% and
(b)(i) on or prior to the Distribution Date in May 2007 cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period do
not exceed 20% of the Original Subordinate Principal Balance and (ii) after the
Distribution Date in May 2007 cumulative Realized Losses on the Mortgage Loans
as of the end of the related Prepayment Period do not exceed 30% of the Original
Subordinate Principal Balance, then, the Group I Senior Prepayment Percentage
for such Distribution Date will equal the Group I Senior Percentage; provided,
however, if on such Distribution Date the current weighted average of the
Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages on or prior to the Distribution
Date occurring in May 2007 and the above

                                      -12-

<PAGE>

delinquency and loss tests are met, then the Group I Senior Prepayment
Percentage for such Distribution Date will equal the Group I Senior Percentage
plus 50% of the Group I Subordinate Percentage.

         Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the aggregate Current Principal Amount of the
Senior Certificates immediately preceding such Distribution Date, and the
denominator of which is the Scheduled Principal Balance of the Mortgage Loans as
of the beginning of the related Due Period, exceeds such percentage as of the
Cut-off Date, then the Group I Senior Prepayment Percentage for such
Distribution Date will equal 100%. On the Distribution Date on which the Current
Principal Amounts of the Group I Senior Certificates are reduced to zero, the
Group I Senior Prepayment Percentage shall be the minimum percentage sufficient
to effect such reduction and thereafter shall be zero.

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

         GROUP I SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group I
Mortgage Loans, on any Distribution Date, 100% minus the Group I Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group I Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (b) the aggregate Scheduled Principal Balance of
the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 100%, the Group I
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group I Senior Certificates have each been reduced to
zero, then the Group I Subordinate Prepayment Percentage will equal zero for
such Distribution Date.

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

         GROUP II SENIOR CERTIFICATES: The Class II-A Certificates.

         GROUP II SENIOR PERCENTAGE: Initially, 96.15%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group II Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group II Mortgage Loans as of the
beginning of the related Due Period.

                                      -13-

<PAGE>

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

<TABLE>
<CAPTION>

Period (dates inclusive)                              Group II Senior Prepayment Percentage
------------------------                              -------------------------------------
<S>                                                   <C>
June 25, 2004 - May 25, 2011                          100%
June 25, 2011 - May 25, 2012                          Group II Senior Percentage plus 70% of the Group
                                                      II Subordinate Percentage
June 25, 2012 - May 25, 2013                          Group II Senior Percentage plus 60% of the Group
                                                      II Subordinate Percentage
June 25, 2013 - May 25, 2014                          Group II Senior Percentage plus 40% of the Group
                                                      II Subordinate Percentage
June 25, 2014 - May 25, 2015                          Group II Senior Percentage plus 20% of the Group
                                                      II Subordinate Percentage
June 25, 2015 and thereafter                          Group II Senior Percentage
</TABLE>

         In addition, no reduction of the Group II Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including June 2011 and May 2012, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including June 2012 and May
2013, (c) 40% of the Original Subordinate Principal Balance if such Distribution
Date occurs between and including June 2013 and May 2014, (d) 45% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including June 2014 and May 2015, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after June 2015.

         In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and such Mortgage Loans
with respect to which the related Mortgaged Property has been acquired by the
Trust), averaged over the last six months, as a percentage of the aggregate
Current Principal Amount of the Subordinate Certificates does not exceed 50% and
(b)(i) on or prior to the Distribution Date in May 2007 cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period do
not exceed 20% of the Original Subordinate Principal Balance and (ii) after the
Distribution Date in May 2007 cumulative Realized Losses on the Mortgage Loans
as of the end of the related Prepayment Period do not exceed 30% of the Original
Subordinate Principal Balance, then, the Group II Senior Prepayment Percentage
for such Distribution Date will equal the Group II Senior Percentage; provided,
however, if on such Distribution Date the current weighted average of the
Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages on or prior to the Distribution
Date occurring in May 2007 and the

                                      -14-

<PAGE>

above delinquency and loss tests are met, then the Group II Senior Prepayment
Percentage for such Distribution Date will equal the Group II Senior Percentage
plus 50% of the Group II Subordinate Percentage.

         Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the aggregate Current Principal Amount of the
Senior Certificates immediately preceding such Distribution Date, and the
denominator of which is the Scheduled Principal Balance of the Mortgage Loans as
of the beginning of the related Due Period, exceeds such percentage as of the
Cut-off Date, then the Group II Senior Prepayment Percentage for such
Distribution Date will equal 100%. On the Distribution Date on which the Current
Principal Amounts of the Group II Senior Certificates are reduced to zero, the
Group II Senior Prepayment Percentage shall be the minimum percentage sufficient
to effect such reduction and thereafter shall be zero.

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

         GROUP II SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
II Mortgage Loans, on any Distribution Date, 100% minus the Group II Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group II Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (b) the aggregate Scheduled Principal Balance of
the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 100%, the Group II
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group II Senior Certificates have each been reduced to
zero, then the Group II Subordinate Prepayment Percentage will equal zero for
such Distribution Date.

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

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

         GROUP III SENIOR PERCENTAGE: Initially, 96.15%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group III Senior Certificates immediately preceding such Distribution Date by
the aggregate Scheduled Principal Balance of the Group III Mortgage Loans as of
the beginning of the related Due Period.

                                        -15-

<PAGE>

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

<TABLE>
<CAPTION>

Period (dates inclusive)                              Group III Senior Prepayment Percentage
------------------------                              --------------------------------------
<S>                                                   <C>
June 25, 2004 - May 25, 2011                          100%
June 25, 2011 - May 25, 2012                          Group III Senior Percentage plus 70% of the
                                                      Group III Subordinate Percentage
June 25, 2012 - May 25, 2013                          Group III Senior Percentage plus 60% of the
                                                      Group III Subordinate Percentage
June 25, 2013 - May 25, 2014                          Group III Senior Percentage plus 40% of the
                                                      Group III Subordinate Percentage
June 25, 2014 - May 25, 2015                          Group III Senior Percentage plus 20% of the
                                                      Group III Subordinate Percentage
June 25, 2015 and thereafter                          Group III Senior Percentage
</TABLE>

         In addition, no reduction of the Group III Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including June 2011 and May 2012, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including June 2012 and May
2013, (c) 40% of the Original Subordinate Principal Balance if such Distribution
Date occurs between and including June 2013 and May 2014, (d) 45% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including June 2014 and May 2015, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after June 2015.

         In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and such Mortgage Loans
with respect to which the related Mortgaged Property has been acquired by the
Trust), averaged over the last six months, as a percentage of the aggregate
Current Principal Amount of the Subordinate Certificates does not exceed 50% and
(b)(i) on or prior to the Distribution Date in May 2007 cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period do
not exceed 20% of the Original Subordinate Principal Balance and (ii) after the
Distribution Date in May 2007 cumulative Realized Losses on the Mortgage Loans
as of the end of the related Prepayment Period do not exceed 30% of the Original
Subordinate Principal Balance, then, the Group III Senior Prepayment Percentage
for such Distribution Date will equal the Group III Senior Percentage; provided,
however, if on such Distribution Date the current weighted average of the
Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages on or prior to the Distribution
Date occurring in May 2007 and the

                                      -16-

<PAGE>

above delinquency and loss tests are met, then the Group III Senior Prepayment
Percentage for such Distribution Date will equal the Group III Senior Percentage
plus 50% of the Group III Subordinate Percentage.

         Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the aggregate Current Principal Amount of the
Senior Certificates immediately preceding such Distribution Date, and the
denominator of which is the Scheduled Principal Balance of the Mortgage Loans as
of the beginning of the related Due Period, exceeds such percentage as of the
Cut-off Date, then the Group III Senior Prepayment Percentage for such
Distribution Date will equal 100%. On the Distribution Date on which the Current
Principal Amounts of the Group III Senior Certificates are reduced to zero, the
Group III Senior Prepayment Percentage shall be the minimum percentage
sufficient to effect such reduction and thereafter shall be zero.

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

         GROUP III SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
III Mortgage Loans, on any Distribution Date, 100% minus the Group III Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group III Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (b) the aggregate Scheduled Principal Balance of
the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 100%, the Group III
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group III Senior Certificates have each been reduced to
zero, then the Group III Subordinate Prepayment Percentage will equal zero for
such Distribution Date.

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

         GROUP IV SENIOR CERTIFICATES: The Class IV-A Certificates.

         GROUP IV SENIOR PERCENTAGE: Initially, 96.15%. On any Distribution
Date, the lesser of (i) 100% and (ii) the percentage (carried to six places
rounded up) obtained by dividing the aggregate Current Principal Amount of the
Group IV Senior Certificates immediately preceding such Distribution Date by the
aggregate Scheduled Principal Balance of the Group IV Mortgage Loans as of the
beginning of the related Due Period.

                                      -17-

<PAGE>

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

<TABLE>
<CAPTION>

Period (dates inclusive)                              Group IV Senior Prepayment Percentage
------------------------                              -------------------------------------
<S>                                                   <C>
June 25, 2004 - May 25, 2011                          100%
June 25, 2011 - May 25, 2012                          Group IV Senior Percentage plus 70% of the
                                                      Group IV Subordinate Percentage
June 25, 2012 - May 25, 2013                          Group IV Senior Percentage plus 60% of the
                                                      Group IV Subordinate Percentage
June 25, 2013 - May 25, 2014                          Group IV Senior Percentage plus 40% of the
                                                      Group IV Subordinate Percentage
June 25, 2014 - May 25, 2015                          Group IV Senior Percentage plus 20% of the
                                                      Group IV Subordinate Percentage
June 25, 2015 and thereafter                          Group IV Senior Percentage
</TABLE>

         In addition, no reduction of the Group IV Senior Prepayment Percentage
shall occur on any Distribution Date unless, as of the last day of the month
preceding such Distribution Date, (A) the aggregate Scheduled Principal Balance
of the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 50%; and (B) cumulative
Realized Losses on the Mortgage Loans do not exceed (a) 30% of the Original
Subordinate Principal Balance if such Distribution Date occurs between and
including June 2011 and May 2012, (b) 35% of the Original Subordinate Principal
Balance if such Distribution Date occurs between and including June 2012 and May
2013, (c) 40% of the Original Subordinate Principal Balance if such Distribution
Date occurs between and including June 2013 and May 2014, (d) 45% of the
Original Subordinate Principal Balance if such Distribution Date occurs between
and including June 2014 and May 2015, and (e) 50% of the Original Subordinate
Principal Balance if such Distribution Date occurs during or after June 2015.

         In addition, if on any Distribution Date the current weighted average
of the Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages, and (a) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and such Mortgage Loans
with respect to which the related Mortgaged Property has been acquired by the
Trust), averaged over the last six months, as a percentage of the aggregate
Current Principal Amount of the Subordinate Certificates does not exceed 50% and
(b)(i) on or prior to the Distribution Date in May 2007 cumulative Realized
Losses on the Mortgage Loans as of the end of the related Prepayment Period do
not exceed 20% of the Original Subordinate Principal Balance and (ii) after the
Distribution Date in May 2007 cumulative Realized Losses on the Mortgage Loans
as of the end of the related Prepayment Period do not exceed 30% of the Original
Subordinate Principal Balance, then, the Group IV Senior Prepayment Percentage
for such Distribution Date will equal the Group IV Senior Percentage; provided,
however, if on such Distribution Date the current weighted average of the
Subordinate Percentages is equal to or greater than two times the initial
weighted average of the Subordinate Percentages on or prior to the Distribution
Date occurring in May 2007 and the

                                      -18-

<PAGE>

above delinquency and loss tests are met, then the Group IV Senior Prepayment
Percentage for such Distribution Date will equal the Group IV Senior Percentage
plus 50% of the Group IV Subordinate Percentage.

         Notwithstanding the foregoing, if on any Distribution Date, the
percentage, the numerator which is the aggregate Current Principal Amount of the
Senior Certificates immediately preceding such Distribution Date, and the
denominator of which is the Scheduled Principal Balance of the Mortgage Loans as
of the beginning of the related Due Period, exceeds such percentage as of the
Cut-off Date, then the Group IV Senior Prepayment Percentage for such
Distribution Date will equal 100%. On the Distribution Date on which the Current
Principal Amounts of the Group IV Senior Certificates are reduced to zero, the
Group IV Senior Prepayment Percentage shall be the minimum percentage sufficient
to effect such reduction and thereafter shall be zero.

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

         GROUP IV SUBORDINATE PREPAYMENT PERCENTAGE: With respect to the Group
IV Mortgage Loans, on any Distribution Date, 100% minus the Group IV Senior
Prepayment Percentage, except that on any Distribution Date after the Current
Principal Amounts of the Group IV Senior Certificates have each been reduced to
zero, if (a) the weighted average of the Subordinate Percentages on such
Distribution Date equals or exceeds two times the initial weighted average of
the Subordinate Percentages and (b) the aggregate Scheduled Principal Balance of
the Mortgage Loans delinquent 60 days or more (including for this purpose any
such Mortgage Loans in foreclosure and Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust), averaged over the
last six months, as a percentage of the sum of the aggregate Current Principal
Amount of the Subordinate Certificates does not exceed 100%, the Group IV
Subordinate Prepayment Percentage will equal 100%. If the test set forth in the
preceding sentence is not satisfied on any Distribution Date after the Current
Principal Amount of the Group IV Senior Certificates have each been reduced to
zero, then the Group IV Subordinate Prepayment Percentage will equal zero for
such Distribution Date.

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

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

         INDEPENDENT: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Depositor or the Master
Servicer and of any Affiliate of the Depositor or the Master Servicer, (b) does
not have any direct financial interest or any material

                                      -19-

<PAGE>

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.

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

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

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

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

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

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

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

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

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

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

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

                                      -20-

<PAGE>

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

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

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

         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.

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

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

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

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

         LOANCITY: Loancity.com, or its successor in interest.

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

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

                                      -21-

<PAGE>

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

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

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

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

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

         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, National
Association and, thereafter, its respective successors in interest who meet the
qualifications of the Servicing Agreements and this Agreement.

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

         MASTER SERVICER COLLECTION ACCOUNT: The trust account or accounts
created and maintained pursuant to Section 4.02, which shall be denominated
"U.S. Bank National Association, as Trustee f/b/o holders of Structured Asset
Mortgage Investments II Inc., Bear Stearns ARM Trust, Mortgage

                                      -22-

<PAGE>

Pass-Through Certificates, Series 2004-3 - Master Servicer Collection Account."
The Master Servicer Collection Account shall be an Eligible Account.

         MASTER SERVICING COMPENSATION: The meaning specified in Section 3.14.

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

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

         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.

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

         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 6.05.

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

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

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

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

                                      -23-

<PAGE>

respect to each Mortgage Loan other than a Cooperative Loan, each related
Mortgage Note, Mortgage and Mortgage File and all rights appertaining thereto),
including a mortgage loan the property securing which has become an REO
Property.

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of May 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.

         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.

         MORTGAGOR: The obligor on a Mortgage Note.

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

         NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
to the 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 RATE: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the Aggregate Expense Rate (expressed as a
per annum rate).

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

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

         OFFERED CERTIFICATES: The Class I-A-1, Class I-A-2, Class I-A-3, Class
II-A, Class III-A, Class IV-A, Class R-I, Class R-II, Class B-l, Class B-2 and
Class B-3 Certificates.

                                      -24-

<PAGE>

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

         OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer or
the Depositor, as applicable, and delivered to the Trustee, as required by this
Agreement.

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

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

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

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

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

         PASS-THROUGH RATE: As to each Class of Certificates and the REMIC I
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.

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

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

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

                                      -25-

<PAGE>

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

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

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

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

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

                  (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

                                      -26-

<PAGE>

maturity in excess of 120% of the yield to maturity at par or if such instrument
or security is purchased at a price greater than par.

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

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

         PHYSICAL CERTIFICATES: The Residual Certificates and the Private
Certificates.

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

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

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

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

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

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

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

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

                                      -27-

<PAGE>

         RATING AGENCIES: Moody's 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
Mortgaged 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 Certificates on any Distribution Date.

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

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

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

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

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

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

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

         REMIC I REGULAR INTERESTS: REMIC I Regular Interests I-A, I-B, II-A,
II-B, III-A, III-B, IV-A, IV-B and ZZZ.

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

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

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

                                      -28-

<PAGE>

         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.

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

         REPURCHASE PRICE: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Seller pursuant
to the Mortgage Loan Purchase Agreement or Article II of this Agreement, an
amount equal to the sum of (i)(a) 100% of the Outstanding Principal Balance of
such Mortgage Loan as of the date of repurchase (or if the related Mortgaged
Property was acquired with respect thereto, 100% of the Outstanding Principal
Balance at the date of the acquisition), plus (b) accrued but unpaid interest on
the Outstanding Principal Balance at the related Mortgage Interest Rate, through
and including the last day of the month of repurchase, plus (c) any unreimbursed
Monthly Advances and servicing advances payable to the Servicer of the Mortgage
Loan or to the Master Servicer and (ii) any costs and damages (if any) incurred
by the Trust in connection with any violation of such Mortgage Loan of any
predatory lending laws.

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

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

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

         RESIDUAL CERTIFICATES: Any of the Class R Certificates.

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

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

                                      -29-

<PAGE>

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

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

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

         SCHEDULED PRINCIPAL: The principal portion of any Scheduled Payment.

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

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

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

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

                                      -30-

<PAGE>

BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT
AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE
TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR
ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED [in
the case of a Residual Certificate:] 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 [in the case of the Class B-4, Class B-5 and Class
B-6 Certificates:], UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE
PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND
OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED
TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED
TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION
EXEMPTION ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23 AND (II)
WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR,
THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, ANY SERVICER OR THE TRUSTEE,
WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A
GLOBAL CERTIFICATE OR UNLESS AN OPINION OF COUNSEL SPECIFIED IN SECTION 5.07 OF
THE AGREEMENT IS PROVIDED."

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

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

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

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

                                      -31-

<PAGE>

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

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

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

         SERVICER: With respect to each Mortgage Loan, Countrywide or EverHome.

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

         SERVICING AGREEMENTS: The Countrywide Servicing Agreement and EverHome
Servicing Agreements.

         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.

         STARTUP DAY: May 28, 2004.

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

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

         SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date, an
amount equal to the sum, without duplication, of the following for the Group I,
Group II, Group III and Group IV

                                        -32-

<PAGE>

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

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

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

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

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

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

                  (vi) on the Distribution Date on which the Current Principal
                  Amounts of the Group I Senior Certificates, Group II Senior
                  Certificates, Group III Senior Certificates or Group IV Senior
                  Certificates, have all been reduced to zero, 100% of the
                  related Senior Optimal Principal Amount. After the aggregate
                  Current Principal Amount of the Subordinate Certificates has
                  been reduced to zero, the Subordinate Optimal Principal Amount
                  shall be zero.

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

                                      -33-

<PAGE>

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

         SUBSEQUENT RECOVERIES: As of any Distribution Date, amounts received by
the Master Servicer during the related Due Period or surplus amounts held by the
Master 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 related Servicing Agreement, the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, in each case, (i)
which has an Outstanding Principal Balance not greater nor materially less than
the Mortgage Loan for which it is to be substituted; (ii) which has a Mortgage
Interest Rate and Net Rate not less than, and not materially greater than, such
Mortgage Loan; (iii) which has a maturity date not materially earlier or later
than such Mortgage Loan and not later than the latest maturity date of any
Mortgage Loan; (iv) which is of the same property type and occupancy type as
such Mortgage Loan; (v) which has a Loan-to-Value Ratio not greater than the
Loan-to-Value Ratio of such Mortgage Loan; (vi) which is current in payment of
principal and interest as of the date of substitution; (vii) as to which the
payment terms do not vary in any material respect from the payment terms of the
Mortgage Loan for which it is to be substituted and (viii) which has a Gross
Margin, Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than those
of such Mortgage Loan, has the same Index and interval between Interest
Adjustment Dates as such Mortgage Loan, and a Minimum Lifetime Mortgage Rate no
lower than that of such Mortgage Loan.

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

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

         UNCERTIFICATED PRINCIPAL BALANCE: With respect to any REMIC I Regular
Interest 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)

                                      -34-

<PAGE>

the principal portion of all Realized Losses allocated prior to such
Distribution Date to such Regular Interest, taking account of the Loss
Allocation Limitation.

         UNDERLYING SELLER: With respect to each Mortgage Loan, Countrywide,
E-Loan, EverHome or Loancity, as indicated on the Mortgage Loan Schedule.

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

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

                                      -35-

<PAGE>

                                   ARTICLE II
                          Conveyance of Mortgage Loans;
                        Original Issuance of Certificates

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

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

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

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

                  (iii) unless the Mortgage Loan is a MOM Loan, a certified copy
of the assignment (which may be in the form of a blanket assignment if permitted
in the jurisdiction in which the Mortgaged Property is located) to "U.S. Bank
National Association, as Trustee", with evidence of recording with respect to
each Mortgage Loan in the name of the Trustee thereon (or if clause (w) in the
proviso below applies or for Mortgage Loans with respect to which the related
Mortgaged

                                      -36-

<PAGE>

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;

                                      -37-

<PAGE>

                  (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;

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

                                      -38-

<PAGE>

Seller fails to pay the cost of recording the assignments, such expense will be
paid by the Trustee and the Trustee shall be reimbursed for such expenses by the
Trust in accordance with Section 9.05.

         Section 2.02 ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE. (a) The Trustee
acknowledges the sale, transfer and assignment of the Trust Fund to it by the
Depositor and receipt of, subject to further review and the exceptions which may
be noted pursuant to the procedures described below, and declares that it holds,
the documents (or certified copies thereof) delivered to the Custodian, as its
agent, pursuant to Section 2.01, and declares that it will continue to hold
those documents and any amendments, replacements or supplements thereto and all
other assets of the Trust Fund delivered to it as Trustee in trust for the use
and benefit of all present and future Holders of the Certificates. On the
Closing Date, the Custodian, with respect to the Mortgage Loans, shall
acknowledge with respect to each Mortgage Loan by delivery to the Depositor and
the Trustee of an Initial Certification receipt of the Mortgage File, but
without review of such Mortgage File, except to the extent necessary to confirm
that such Mortgage File contains the related Mortgage Note or lost note
affidavit. No later than 90 days after the Closing Date (or, with respect to any
Substitute Mortgage Loan, within five Business Days after the receipt by the
Trustee or Custodian thereof), the Trustee agrees, for the benefit of the
Certificateholders, to review or cause to be reviewed by the Custodian on its
behalf (under the Custodial Agreement), each Mortgage File delivered to it and
to execute and deliver, or cause to be executed and delivered, to the Depositor
and the Trustee an Interim Certification. In conducting such review, the Trustee
or Custodian will ascertain whether all required documents have been executed
and received, and based on the Mortgage Loan Schedule, whether those documents
relate, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans it has received, as identified in
the Mortgage Loan Schedule. In performing any such review, the Trustee or the
Custodian, as its agent, may conclusively rely on the purported due execution
and genuineness of any such document and on the purported genuineness of any
signature thereon. If the Trustee or the Custodian, as its agent, finds any
document constituting part of the Mortgage File has not been executed or
received, or to be unrelated, determined on the basis of the Mortgagor name,
original principal balance and loan number, to the Mortgage Loans identified in
Exhibit B or to appear defective on its face (a "Material Defect"), the Trustee
or the Custodian, as its agent, shall promptly notify the Seller. In accordance
with the Mortgage Loan Purchase Agreement, the Seller shall correct or cure any
such 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 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

                                      -39-

<PAGE>

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,
the Mortgage Files delivered to it and will execute and deliver or cause to be
executed and delivered to the Depositor and the Trustee a Final Certification.
In conducting such review, the Trustee or the Custodian, as its agent, will
ascertain whether an original of each document required to be recorded has been
returned from the recording office with evidence of recording thereon or a
certified copy has been obtained from the recording office. If the Trustee or
the Custodian, as its agent, finds a Material Defect, the Trustee or the
Custodian, as its agent, shall promptly notify the Seller (provided, however,
that with respect to those documents described in subsections (b)(I)(iv), (v)
and (vii) of Section 2.01 and subsection (b)(II)(ix) of Section 2.01, the
Trustee's and Custodian's obligations shall extend only to the documents
actually delivered to the Custodian pursuant to such subsections). In accordance
with the Mortgage Loan Purchase Agreement, the Seller shall correct or cure any
such 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 Certificateholders in the related Mortgage Loan,
the Trustee shall enforce the Seller's obligation under the Mortgage Loan
Purchase Agreement to, within 90 days from the Trustee's or Custodian's
notification, provide a Substitute Mortgage Loan (if within two years of the
Closing Date) or purchase such Mortgage Loan at the Repurchase Price, provided
that, if such 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
and the Trustee written notification detailing the components of the Repurchase
Price. Upon deposit of the Repurchase Price in the Master Servicer Collection
Account, the Depositor shall notify the Trustee and the Custodian, as agent of
the Trustee (upon receipt of a Request for Release

                                      -40-

<PAGE>

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
available funds is received by the Trustee. The Trustee 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 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 Certificateholders or to the Trustee on their behalf.

         Section 2.03 ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE
AGREEMENT. (a) The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to the Depositor's rights and
obligations pursuant to the Servicing Agreements (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 Certificateholders' sole remedy for any breach thereof. At the request
of the Trustee, the Depositor shall take such actions as may be necessary to
enforce the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.

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

                                      -41-

<PAGE>

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

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

                                      -42-

<PAGE>

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

         Section 2.05 ISSUANCE OF CERTIFICATES.

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

         (b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests, and the other assets of REMIC II for the
benefit of the holders of the REMIC II Certificates. 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
Certificates.

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

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

                                      -43-

<PAGE>

and delivery of this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict with or
result in a breach of, or constitute a default under, any of the provisions of
any law, governmental rule, regulation, judgment, decree or order binding on the
Depositor or its properties or the articles of incorporation or by-laws of the
Depositor, except those conflicts, breaches or defaults which would not
reasonably be expected to have a material adverse effect on the Depositor's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;

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

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

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

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

                                      -44-

<PAGE>

                                   ARTICLE III
                 Administration and Servicing of Mortgage Loans

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

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

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

                                      -45-

<PAGE>

         Section 3.02 REMIC-RELATED COVENANTS. For as long as each REMIC shall
exist, the Trustee and the Securities Administrator shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and the
Trustee and the Securities Administrator shall comply with any directions of the
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 or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion addressed
to the Trustee prepared at the expense of the Trust Fund; and (b) other than
with respect to a substitution pursuant to the Mortgage Loan Purchase Agreement
or Section 2.04 of this Agreement, as applicable, accept any contribution to any
REMIC after the Startup Day without receipt of a REMIC Opinion addressed to the
Trustee .

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

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

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

                                      -46-

<PAGE>

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

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

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

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

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

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<PAGE>

other documents, as the Master Servicer may request, to enable the Master
Servicer to master service and administer the Mortgage Loans and carry out its
duties hereunder, in each case in accordance with Accepted Master Servicing
Practices (and the Trustee shall have no liability for misuse of any such powers
of attorney by the Master Servicer or any Servicer). If the Master Servicer or
the Trustee has been advised that it is likely that the laws of the state in
which action is to be taken prohibit such action if taken in the name of the
Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 9.11 hereof. In the performance of its duties hereunder, the
Master Servicer shall be an independent contractor and shall not, except in
those instances where it is taking action in the name of the Trustee, be deemed
to be the agent of the Trustee.

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

         Section 3.07 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by any Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution Date,
the Servicer will, if required under the applicable Servicing Agreement (or if
the Servicer does not, the Master Servicer may), promptly furnish to the
Custodian, on behalf of the Trustee, two copies of a certification substantially
in the form of Exhibit D hereto signed by a Servicing Officer or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the Protected Account maintained by
the applicable Servicer pursuant to Section 4.01 or by the applicable Servicer
pursuant to its Servicing Agreement have been or will be so deposited) and shall
request that the Custodian, on behalf of the Trustee, deliver to the applicable
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of the Trustee, shall promptly release the
related Mortgage File to the applicable Servicer and the Trustee and Custodian
shall have no further responsibility with regard to such Mortgage File. Upon any
such payment in full, each Servicer is authorized, to give, as agent for the
Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of such payment, it being
understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Protected Account.

         (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in

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

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

         (a) The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are
collected by the Master Servicer or by a Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to the
right of each Servicer to retain its Servicing Fee and other amounts as provided
in the applicable Servicing Agreement. The Master Servicer shall, and (to the
extent provided in the applicable Servicing Agreement) shall cause each Servicer
to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any time upon reasonable request
and during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or insurance
regulatory authority if so required by applicable regulations of the Office of
Thrift Supervision or other regulatory authority, such access to be afforded
without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.

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

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<PAGE>

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

         Section 3.09 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE POLICIES.

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

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

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

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<PAGE>

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

         (b) The Master Servicer agrees to present, or to cause each Servicer
(to the extent required under the related Servicing Agreement) to present, on
behalf of the Trustee and the Certificateholders, claims to the insurer under
any Primary Mortgage Insurance Policies and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 4.01 and 4.02, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in the
Master Servicer Collection Account, subject to withdrawal pursuant to 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 all income and gain realized
from any investment of funds in the Distribution Account and the Master Servicer
Collection Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not including
any prepayment premium or penalty) shall be retained by the applicable Servicer
and shall not be

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<PAGE>

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

         Section 3.15 REO PROPERTY.

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

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

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

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

         Section 3.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.

         (a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before March 1 of each year, commencing on March 1, 2005, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been

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<PAGE>

a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of such
Servicing Officer to lead such Servicing Officer to believe that 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, the Rating Agencies and the Depositor on or
before March 1 of each year, commencing on March 1, 2005 to the effect that,
with respect to the most recently ended fiscal year, such firm has examined
certain records and documents relating to the Master Servicer's performance of
its servicing obligations under this Agreement and pooling and servicing and
trust agreements in material respects similar to this Agreement and to each
other and that, on the basis of such examination conducted substantially in
compliance with the audit program for mortgages serviced for Freddie Mac or the
Uniform Single Attestation Program for Mortgage Bankers, such firm is of the
opinion that the Master Servicer's activities have been conducted in compliance
with this Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other exceptions as are set forth in such statement and
(iii) such exceptions that the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages Serviced by Freddie Mac requires it
to report. Copies of such statements shall be provided to any Certificateholder
upon request by the Master Servicer, or by the Trustee at the expense of the
Master Servicer if the Master Servicer shall fail to provide such copies. If
such report discloses exceptions that are material, the Master Servicer shall
advise the Trustee whether such exceptions have been or are susceptible of cure,
and will take prompt action to do so.

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

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<PAGE>

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

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

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

         Section 3.21 OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.

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

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         (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.

         Section 3.22 RESERVED.

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                                   ARTICLE IV
                                    Accounts

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

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

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

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

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<PAGE>

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

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

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

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

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

                  (i) Any amounts withdrawn from a Protected Account;

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

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

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

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

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

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<PAGE>

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

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

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

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

         (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.

                                      -58-

<PAGE>

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

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

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

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

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

                                      -59-

<PAGE>

(limited in the case of amounts due the Master Servicer to those not withdrawn
from the Master Servicer Collection Account in accordance with the terms of this
Agreement):

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

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

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

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

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

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

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

                                      -60-

<PAGE>

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

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

                  (xi) to remove amounts deposited in error; and

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

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

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

                                      -61-

<PAGE>

                                    ARTICLE V
                                  Certificates

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

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

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

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

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

                                      -62-

<PAGE>

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

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

         The REMIC I Regular Interests and the Class R-I Certificate will have
the following designations, initial balances and pass-through rates:

<TABLE>
<CAPTION>

  REMIC I Interest       Initial Balance        Pass-Through Rate               Related Group
<S>                    <C>                           <C>                <C>
         I-A           $        1,451.41             (1)                         Group I
         I-B           $       37,698.48             (2)                         Group I
        II-A           $        2,464.13             (1)                        Group II
        II-B           $       64,003.08             (3)                        Group II
        III-A          $          786.58             (1)                        Group III
        III-B          $       20,430.36             (4)                        Group III
        IV-A           $        1,099.16             (1)                        Group IV
        IV-B           $       28,549.41             (5)                        Group IV
         ZZZ           $1,506,656,691.36             (1)                Group I through Group IV
      Class R-I        $           50.00             (2)                         Group I
</TABLE>

(1) The weighted average of the Net Rates of the Mortgage Loans, weighted on the
basis of the respective Scheduled Principal Balance of each such Mortgage Loan
as of the beginning of the Due Period immediately preceding the related
Distribution Date.

(2) The weighted average of the Net Rates of the Group I Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.

(3) The weighted average of the Net Rates of the Group II Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.

                                      -63-

<PAGE>

(4) The weighted average of the Net Rates of the Group III Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.

(5) The weighted average of the Net Rates of the Group IV Mortgage Loans,
weighted on the basis of the respective Scheduled Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.

         Distributions shall be deemed to be made from amounts received on the
Mortgage Loans to REMIC I Regular Interests, first, so as to keep the
Uncertificated Principal Balance of each REMIC I Regular Interest ending with
the designation "B" equal to 0.01% of the aggregate Scheduled Principal Balance
of the Mortgage Loans in the related Loan Group; second, to each REMIC I Regular
Interest ending with the designation "A," so that the Uncertificated Principal
Balance of each such REMIC I Regular Interest is equal to 0.01% of the excess of
(x) the aggregate Scheduled Principal Balance of the Mortgage Loans in the
related Loan Group over (y) the Current Principal Amount of the Senior
Certificates in the related Certificate Group (except that if any such excess is
a larger number than in the preceding distribution period, the least amount of
principal shall be distributed to such REMIC I Regular Interests such that the
REMIC I Subordinated Balance Ratio is maintained); and third, any remaining
principal to REMIC I Regular Interest ZZZ. Realized Losses on the Mortgage Loans
shall be applied after all distributions have been made on each Distribution
Date first, so as to keep the Uncertificated Principal Balance of each REMIC I
Regular Interest ending with the designation "B" equal to 0.01% of the aggregate
Scheduled Principal Balance of the Mortgage Loans in the related Loan Group;
second, to each REMIC I Regular Interest ending with the designation "A," so
that the Uncertificated Principal Balance of each such REMIC I Regular Interest
is equal to 0.01% of the excess of (x) the aggregate Scheduled Principal Balance
of the Mortgage Loans in the related Loan Group over (y) the Current Principal
Amount of the Senior Certificates in the related Certificate Group (except that
if any such excess is a larger number than in the preceding distribution period,
the least amount of Realized Losses shall be applied to such REMIC I Regular
Interests such that the REMIC I Subordinated Balance Ratio is maintained); and
third, any remaining Realized Losses on the Mortgage Loans shall be allocated to
REMIC I Regular Interest ZZZ.

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

<TABLE>
<CAPTION>

                                            INITIAL PRINCIPAL
           DESIGNATION                           AMOUNT                       PASS-THROUGH RATE
           -----------                           ------                       -----------------
<S>                                           <C>                                    <C>
              I-A-1                           $202,641,200.00                        (1)
              I-A-2                           $150,000,000.00                        (1)
              I-A-3                           $  9,829,500.00                        (1)
              II-A                            $615,389,500.00                        (2)
              III-A                           $196,437,800.00                        (3)
              IV-A                            $274,502,500.00                        (4)
               R-I                            $         50.00                        (1)
              R-II                            $         50.00                        (1)
               B-1                            $ 18,835,100.00                        (5)
               B-2                            $ 14,314,700.00                        (5)
               B-3                            $ 10,547,600.00                        (5)
</TABLE>

                                        -64-

<PAGE>

<TABLE>
<CAPTION>

<S>                                           <C>                                    <C>
               B-4                            $8,287,500.00                         (5)
               B-5                            $3,767,000.00                         (5)
               B-6                            $2,260,723.95                         (5)
</TABLE>

         (1) The Class I-A-1, Class I-A-2, Class I-A-3, Class R-I and Class R-II
Certificates will each bear interest at a variable pass-through rate equal to
the weighted average of the Net Rates of the Group I Mortgage Loans, weighted on
the basis of the respective Scheduled Principal Balances of each such Mortgage
Loan as of the beginning of the Due Period immediately preceding the related
Distribution Date; provided that, for federal income tax purposes the Class I-A-
1, Class I-A-2 and Class I-A-3 Certificates will each bear interest at a rate
equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC I Regular Interest I-B, weighted on the basis of the
Uncertificated Principal balance of such REMIC I Regular Interest immediately
preceding the related Distribution Date. The pass-through rate with respect to
the first Interest Accrual Period is approximately 3.996% per annum.

         (2) The Class II-A Certificates will bear interest at a variable
pass-through rate equal to the weighted average of the Net Rates of the Group II
Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, for federal
income tax purposes the Class II-A Certificates will bear interest at a rate
equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC I Regular Interest II-B, weighted on the basis of the
Uncertificated Principal balance of such REMIC I Regular Interest immediately
preceding the related Distribution Date. The pass-through rate with respect to
the first Interest Accrual Period is approximately 4.344% per annum.

         (3) The Class III-A Certificates will bear interest at a variable
pass-through rate equal to the weighted average of the Net Rates of the Group
III Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, for federal
income tax purposes the Class III-A Certificates will bear interest at a rate
equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC I Regular Interest III-B, weighted on the basis of
the Uncertificated Principal balance of such REMIC I Regular Interest
immediately preceding the related Distribution Date. The pass-through rate with
respect to the first Interest Accrual Period is approximately 4.139% per annum.

         (4) The Class IV-A Certificates will bear interest at a variable
pass-through rate equal to the weighted average of the Net Rates of the Group IV
Mortgage Loans, weighted on the basis of the respective Scheduled Principal
Balances of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date; provided that, for federal
income tax purposes the Class IV-A Certificates will bear interest at a rate
equivalent to the foregoing, expressed as the weighted average of the
Pass-Through Rate on REMIC I Regular Interest IV-B, weighted on the basis of the
Uncertificated Principal balance of such REMIC I Regular Interest immediately
preceding the related Distribution Date. The pass-through rate with respect to
the first Interest Accrual Period is approximately 4.939% per annum.

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

         (d) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date for
the Mortgage Loan with the latest

                                      -65-

<PAGE>

maturity date in the Trust Fund has been designated as the "latest possible
maturity date" for the REMIC I Regular Interests and the Certificates.

         (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 of such Class applicable to
such Distribution Date.

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

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

                                        -66-

<PAGE>

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

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

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

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

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

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

                  THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
         BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
         ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
         INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
         INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE PROPOSED
         TRANSFEREE PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL ADDRESSED TO
         THE DEPOSITOR, TRUSTEE, MASTER SERVICER AND SECURITIES ADMINISTRATOR
         AND ON WHICH THEY MAY RELY THAT IS

                                        -67-

<PAGE>

         SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF CERTIFICATES ON BEHALF
         OF SUCH PERSON WILL NOT RESULT IN OR CONSTITUTE A NONEXEMPT PROHIBITED
         TRANSACTION, IS PERMISSIBLE UNDER APPLICABLE LAW AND WILL NOT GIVE RISE
         TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE MASTER
         SERVICER, THE SECURITIES ADMINISTRATOR OR THE TRUSTEE.

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

         THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON
BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND
HOLDING OF A CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE
TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS
NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14,
PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY
ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK- ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE OR
UNLESS THE OPINION SPECIFIED IN SECTION 5.07 OF THE AGREEMENT IS PROVIDED.

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

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

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

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<PAGE>

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.

         (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.

                                      -69-

<PAGE>

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

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

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

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

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

                  (ii) Upon acceptance for exchange or transfer of a beneficial
interest in a Global Certificate of a Class for an Individual Certificate of
such Class as provided herein, the Trustee shall (or shall request the
Depository to) endorse on the schedule affixed to such 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

                                      -70-

<PAGE>

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.

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

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

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

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

         Section 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. (a) If
(i) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different
number. The

                                      -71-

<PAGE>

mutilated, destroyed, lost or stolen Certificate shall thereupon be canceled of
record by the Trustee and shall be of no further effect and evidence no rights.

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

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

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

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

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<PAGE>

the Trustee and the Depositor, as applicable, had no knowledge that it was
untrue. The prior Holder shall be entitled to recover from any purported Holder
of a Residual Certificate that was in fact not a permitted transferee under this
Subsection 5.05(b) at the time it became a Holder all payments made on such
Residual Certificate. Each Holder of a Residual Certificate, by acceptance
thereof, shall be deemed for all purposes to have consented to the provisions of
this Subsection 5.05(b) and to any amendment of this Agreement deemed necessary
(whether as a result of new legislation or otherwise) by counsel of the Tax
Matters Person or the Depositor to ensure that the Residual Certificates are not
transferred to any Person who is not a Permitted Transferee and that any
transfer of such Residual Certificates will not cause the imposition of a tax
upon the Trust or cause any REMIC to fail to qualify as a REMIC.

         (c) The Residual Certificates (including a beneficial interest therein)
may not be purchased by or transferred to any person who is not a United States
Person.

         (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

                                        -73-

<PAGE>

ERISA or Section 4975 of the Code and will not subject the Depositor, the Master
Servicer, the Securities Administrator or the Trustee to any obligation in
addition to those undertaken in the Agreement or (ii) in the case of the Class
B-4, Class B-5 and Class B-6 Certificates, a representation or certification to
the Trustee (upon which the Trustee is authorized to rely) to the effect that
the proposed transfer and holding of such a Certificate and the servicing,
management and operation of the Trust: (I) will not result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code which is not
covered under an individual or class prohibited transaction exemption including
but not limited to Department of Labor Prohibited Transaction Exemption ("PTE")
84-14 (Class Exemption for Plan Asset Transactions Determined by Independent
Qualified Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts), PTE 95-60 (Class Exemption for Certain Transactions Involving
Insurance Company General Accounts), and PTCE 96-23 (Class Exemption for Plan
Asset Transactions Determined by In-House Asset Managers and (II) will not
subject the Depositor, the Securities Administrator, the Master Servicer or the
Trustee to any obligation in addition to those undertaken in the Agreement.

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

         (c) Each beneficial owner of a Class B-1, Class B-2 or Class B-3
Certificate or any interest therein shall be deemed to have represented, by
virtue of its acquisition or holding of that certificate or interest therein,
that either (i) it is not a Plan or investing with "Plan Assets", (ii) it has
acquired and is holding such certificate in reliance on Prohibited Transaction
Exemption 90-30, as amended from time to time (the "Exemption"), and that it
understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by S&P 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

                                      -74-

<PAGE>

of any Certificate in violation of such provisions, shall indemnify and hold
harmless the Trustee, the Securities Administrator and the Master Servicer from
and against any and all liabilities, claims, costs or expenses incurred by the
Trustee, the Securities Administrator or the Master Servicer as a result of such
attempted or purported transfer. The Trustee shall have no liability for
transfer of any such Global Certificates in or through book-entry facilities of
any Depository or between or among Depository Participants or Certificate Owners
made in violation of the transfer restrictions set forth herein.

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

                                      -75-

<PAGE>

                                   ARTICLE VI
                         Payments to Certificateholders

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

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

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

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

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

                  FOURTH, to the Class I-A-1, Class I-A-2 and Class I-A-3
                  Certificates, on a pro rata basis, in reduction of the Current
                  Principal Amounts thereof, the remaining Group I Senior
                  Optimal Principal Amount for such Distribution Date to the
                  extent of remaining Group I Available Funds, until the Current
                  Principal Amounts of such Classes have been reduced to zero.

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

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

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

                                      -76-

<PAGE>

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

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

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

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

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

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

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

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

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

                  (v) Except as provided in clauses (vi) and (vii) below, on
each Distribution Date on or prior to the Cross-Over Date, an amount equal to
the sum of any remaining Group I, Group II, Group III and Group IV Available
Funds after the distributions in clauses (i), (ii), (iii) and (iv) above will be
distributed sequentially, in the following order, to the Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5 and Class B-6 Certificates, in each case up to
an amount equal to and in the following order: (A) the Accrued Certificate
Interest thereon for such Distribution Date, (B) any Accrued Certificate
Interest thereon remaining undistributed from previous Distribution Dates and
(C) such

                                      -77-

<PAGE>

Class's Allocable Share for such Distribution Date, in each case, to the extent
of remaining Group I, Group II, Group III and Group IV Available Funds.

                  (vi) On each Distribution Date prior to the Cross-Over Date
but after the reduction of the Current Principal Amount of all of the Senior
Certificates of a Certificate Group to zero, the remaining Class or Classes of
Senior Certificates in the remaining Certificate Groups will be entitled to
receive in reduction of their Current Principal Amounts, pro rata based upon
their Current Principal Amounts immediately prior to such Distribution Date, in
addition to any Principal Prepayments related to such remaining Senior
Certificates' respective Loan Group allocated to such Senior Certificates, 100%
of the Principal Prepayments on any Mortgage Loan in the Loan Group relating to
the Class or Classes of Senior Certificates of the fully repaid Certificate
Group; provided, however, that if (A) the weighted average of the Subordinate
Percentages on such Distribution Date equals or exceeds two times the initial
weighted average of the Subordinate Percentages and (B) the aggregate Scheduled
Principal Balance of the Mortgage Loans delinquent 60 days or more (including
for this purpose any such Mortgage Loans in foreclosure and Mortgage Loans with
respect to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Current
Principal Amount of the Subordinate Certificates does not exceed 100%, then the
additional allocation of Principal Prepayments to the Senior Certificates in
accordance with this clause (vi) will not be made and 100% of the Principal
Prepayments on any Mortgage Loan in the Loan Group relating to the fully repaid
Class or Classes of Senior Certificates will be allocated to the Subordinate
Certificates.

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

         (b) If, after distributions have been made pursuant to priorities FIRST
and SECOND of clauses (a)(i), (ii), (iii) and (iv) above on any Distribution
Date, the remaining Group I, Group II, Group III or Group IV Available Funds are
less than the Group I, Group II, Group III and Group IV Senior Optimal Principal
Amounts, respectively, the Senior Optimal Principal Amount for such Loan Group
shall be reduced, and such remaining Available Funds will be distributed on the
related Senior Certificates, on a pro rata basis, on the basis of such reduced
amount.

                                      -78-

<PAGE>

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

         (d) For any Distribution Date, "pro rata" distributions among Classes
of Certificates in respect of Accrued Certificate Interest or unpaid Accrued
Certificate Interest will be made in proportion to the amount of Accrued
Certificate Interest or unpaid Accrued Certificate Interest, respectively, due
on such Classes for such Distribution Date. For any Distribution Date, "pro
rata" distributions among Classes of Certificates in respect of principal will
be made in proportion to the Current Principal Amount of such Classes
immediately prior to such Distribution Date.

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

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

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

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

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

                                      -79-

<PAGE>

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

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

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

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

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

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

                  SEVENTH, if such loss is on (y) a Group II, Group III or Group
         IV Mortgage Loan, to the Senior Certificates of the related Certificate
         Group, until the Current Principal Amounts thereof have been reduced to
         zero and (z) a Group I Mortgage Loan, to the Group I Senior
         Certificates, on a pro rata basis, until the Current Principal Amounts
         thereof have been reduced to zero, provided, that the principal portion
         of each Realized Loss allocable to the Class I-A-2 Certificates will
         first be allocated to the Class I-A-3 Certificates until the Current
         Principal Amount of the Class I-A-3 Certificates has been reduced to
         zero; and

                  EIGHTH, to the Senior Certificates, on a pro rata basis.

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

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

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

                                      -80-

<PAGE>

         (f) On each Distribution Date, the Securities Administrator shall
determine and notify the Trustee 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.

         (g) Any Net Interest Shortfall will be allocated among the Classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been allocated thereto in the absence of such Net
Interest Shortfall for such Distribution Date. The interest portion of any
Realized Losses with respect to the Mortgage Loans occurring on or prior to the
Cross-Over Date will not be allocated among any Certificates, but will reduce
the amount of Available Funds on the related Distribution Date. As a result of
the subordination of the Subordinate Certificates in right of distribution, such
Realized Losses 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 in the manner described in
the first sentence of this clause (g).

         (h) 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 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 this Section 6.02. 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 this Section 6.02. 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 6.03 PAYMENTS. (a) On each Distribution Date, other than the
final Distribution Date, the Trustee shall distribute to each Certificateholder
of record as of the immediately preceding Record Date the Certificateholder's
pro rata share of its Class (based on the aggregate Fractional Undivided
Interest represented by such Holder's Certificates) of all amounts required to
be distributed on such Distribution Date to such Class, based on information
provided to the Trustee by the Securities Administrator. The Securities
Administrator shall calculate the amount to be distributed to each Class and,
based on such amounts, the Securities Administrator shall determine the amount
to be distributed to each Certificateholder. All of the Securities
Administrator's calculations of payments shall be based solely on information
provided to the Securities Administrator by the Master Servicer. Neither the
Securities Administrator nor the Trustee shall be

                                      -81-

<PAGE>

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

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

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

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

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

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

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

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

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

                                      -82-

<PAGE>

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

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

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

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

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

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

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

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

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

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

                                      -83-

<PAGE>

                  (xix) the then applicable Group I, Group II, Group III and
Group IV Senior Percentage, Group I, Group II, Group III and Group IV Senior
Prepayment Percentage, Group I, Group II, Group III and Group IV Subordinate
Percentage and Group I, Group II, Group III and Group IV Subordinate Prepayment
Percentage.

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

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

         To the extent timely received from the Securities Administrator, the
Trustee will also make monthly statements available each month to
Certificateholders via the Trustee's internet website. The Trustee's internet
website will initially be located at
"https://trustinvestorreporting.usbank.com". Assistance in using the Trustee's
website service can be obtained by calling the Trustee's customer service desk
at (800) 934-6802.

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

         Section 6.05 MONTHLY ADVANCES. If the Scheduled Payment on a Mortgage
Loan that was due on a related Due Date is delinquent other than as a result of
application of the Relief Act and for which the related Servicer was required to
make an advance pursuant to the related Servicing Agreement exceeds the amount
deposited in the Master Servicer Collection Account which will be used for an
advance with respect to such Mortgage Loan, the Master Servicer will deposit in
the Master Servicer Collection Account not later than the Distribution Account
Deposit Date immediately preceding the related Distribution Date an amount equal
to such deficiency, net of the Servicing Fee for such Mortgage Loan except to
the extent the Master Servicer determines any such

                                      -84-

<PAGE>

advance to be a Nonrecoverable Advance. Subject to the foregoing, the Master
Servicer shall continue to make such advances through the date that the related
Servicer is required to do so under its Servicing Agreement. If the Master
Servicer deems an advance to be a Nonrecoverable Advance, on the Distribution
Account Deposit Date, the Master Servicer shall present an Officer's Certificate
to the Trustee (i) stating that the Master Servicer elects not to make a Monthly
Advance in a stated amount and (ii) detailing the reason it deems the advance to
be a Nonrecoverable Advance.

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

                                      -85-

<PAGE>

                                   ARTICLE VII
                               The Master Servicer

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

         Section 7.02 MERGER OR CONSOLIDATION OF THE MASTER SERVICER.

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

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

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

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

                                      -86-

<PAGE>

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

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

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

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

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

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

                                      -87-

<PAGE>

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

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

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

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

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

                                      -88-

<PAGE>

Trustee an Officer's Certificate and an Opinion of Independent Counsel addressed
to the Trustee, each stating that all conditions precedent to such action under
this Agreement have been completed and such action is permitted by and complies
with the terms of this Agreement; and (iv) in the event the Master Servicer is
terminated without cause by the Company, the Company shall pay the terminated
Master Servicer a termination fee equal to 0.25% of the aggregate Scheduled
Principal Balance of the Mortgage Loans at the time the master servicing of the
Mortgage Loans is transferred to the successor Master Servicer. No such
assignment or delegation shall affect any liability of the Master Servicer
arising prior to the effective date thereof.

                                        -89-

<PAGE>

                                  ARTICLE VIII
                                     Default

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

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

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

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

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

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

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

                                      -90-

<PAGE>

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

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

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

                                      -91-

<PAGE>

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

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

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

         Section 8.04 WAIVER OF DEFAULTS. The Trustee shall transmit by mail to
all Certificateholders, within 60 days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Trustee, unless such
Event of Default shall have been cured, notice of each such Event of Default.
The Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund may, on behalf of all
Certificateholders, waive any default by the Master Servicer in the performance
of its obligations hereunder and the consequences

                                      -92-

<PAGE>

thereof, except a default in the making of or the causing to be made any
required distribution on the Certificates, which default may only be waived by
Holders of Certificates evidencing Fractional Undivided Interests aggregating
100% of the Trust Fund. Upon any such waiver of a past default, such default
shall be deemed to cease to exist, and any Event of Default arising therefrom
shall be deemed to have been timely remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
The Trustee shall give notice of any such waiver to the Rating Agencies.

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

                                        -93-

<PAGE>

                                   ARTICLE IX
             Concerning the Trustee and the Securities Administrator

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

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

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

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

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

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

                                      -94-

<PAGE>

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

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

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

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

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

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

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

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

                                        -95-

<PAGE>

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

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

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

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

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

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

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

                                      -96-

<PAGE>

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

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

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

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

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

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

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

                                      -97-

<PAGE>

Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor with respect to the Mortgage
Loans. Subject to the provisions of Section 2.05, neither the Trustee nor the
Securities Administrator shall be responsible for the legality or validity of
this Agreement or any document or instrument relating to this Agreement, the
validity of the execution of this Agreement or of any supplement hereto or
instrument of further assurance, or the validity, priority, perfection or
sufficiency of the security for the Certificates issued hereunder or intended to
be issued hereunder. Neither the Trustee nor the Securities Administrator shall
at any time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage or any Mortgage Loan, or
the perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
Fund or its ability to generate the payments to be distributed to
Certificateholders, under this Agreement. Neither the Trustee nor the Securities
Administrator shall have any responsibility for filing any financing statement
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to record this Agreement.

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

         Section 9.05 TRUSTEE'S AND SECURITIES ADMINISTRATOR'S FEES AND
EXPENSES. The fees and expenses of the Trustee and the Securities Administrator
shall be paid in accordance with a side letter agreement between the Trustee and
the Master Servicer. In addition, the Trustee and the Securities Administrator
will be entitled to recover from the Master Servicer Collection Account pursuant
to Section 4.03(b) all reasonable out-of-pocket expenses, disbursements and
advances and the expenses of the Trustee and the Securities Administrator,
respectively, in connection with any Event of Default, any breach of this
Agreement or any claim or legal action (including any pending or threatened
claim or legal action) incurred or made by the Trustee or the Securities
Administrator, respectively, in the administration of the trusts hereunder
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from its
negligence or intentional misconduct or which is the responsibility of the
Certificateholders. If funds in the Master Servicer Collection Account are
insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Depositor and the Depositor hereby agrees to pay
such expenses, disbursements or advances upon demand. Such compensation and
reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust.

         Section 9.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE AND SECURITIES
ADMINISTRATOR. The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the entire
duration of this Agreement be a state bank or trust company or a national
banking association organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority

                                      -98-

<PAGE>

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

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

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

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

                                        -99-

<PAGE>

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

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

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

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

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

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

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<PAGE>

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

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

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

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

         (d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.

         (e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts

                                      -101-

<PAGE>

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

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

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

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

         (b) The Securities Administrator shall prepare and file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Federal tax
information returns or elections required to be made hereunder with respect to
each REMIC, the Trust Fund, if applicable, and the Certificates containing such
information and at the times and in the manner as may be required by the Code or
applicable Treasury regulations, and shall furnish to each Holder of
Certificates at any time during the calendar year for which such returns or
reports are made such statements or information at the times and in the manner
as may be required thereby, including, without limitation, reports relating to
interest, original issue discount and market discount or premium (using a
constant prepayment assumption of 25% CPR). The Securities Administrator will
apply for an Employee Identification Number from the IRS under Form SS-4 or any
other acceptable method for all tax entities. In connection with the foregoing,
the Securities Administrator shall timely prepare and file, and the Trustee
shall sign, IRS Form 8811, which shall provide the name and address of the
person who can be contacted to obtain information required to be reported to the
holders of regular interests in each REMIC (the "REMIC Reporting Agent"). The
Trustee shall make elections to treat each REMIC as a REMIC (which elections
shall apply to the taxable period ending December 31, 2004 and each calendar
year thereafter) in such manner as the Code or applicable Treasury regulations
may prescribe, and as described by the Securities Administrator. The Trustee
shall sign all tax information returns filed pursuant to this Section and any
other returns as may be required by the Code. The Holder of the Class R-I
Certificate is hereby designated as the "Tax Matters Person" (within the meaning
of Treas. Reg. ss.ss.1.860F-4(d)) for REMIC I and the Holder of the Class R-II
Certificate is hereby designated as the "Tax Matters Person" for REMIC II. 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

                                      -102-

<PAGE>

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

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

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

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

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

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

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

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

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

         (c) The right of the Depositor or its designee to repurchase all the
assets of the Trust Fund as described in Subsection 10.01(a)(i) above shall be
exercisable only if (i) the aggregate Scheduled Principal Balance of the
Mortgage Loans at the time of any such repurchase is less than

                                      -104-

<PAGE>

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 or REMIC II has
been lost or that a substantial risk exists that such REMIC status will be lost
for the then-current taxable year. At any time thereafter, in the case of (i) or
(ii) above, the Depositor may elect to terminate REMIC I and REMIC II at any
time, and upon such election, the Depositor or its designee, shall repurchase
all the assets of the Trust Fund described in Subsection 10.01(a)(i) above.

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

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

         (f) In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above,
the Master Servicer shall deliver to the Trustee for deposit in the Distribution
Account all distributable amounts remaining in the Master Servicer Collection

                                      -105-

<PAGE>

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

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

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

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

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

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

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

                                      -106-

<PAGE>

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

                                      -107-

<PAGE>

                                   ARTICLE XI
                            Miscellaneous Provisions

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

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

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

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

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

                                      -108-

<PAGE>

         (e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel
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 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,

                                      -109-

<PAGE>

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

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

                                      -110-

<PAGE>

respect to such Certificates and that the pledgor is not an Affiliate of the
Trustee, the Securities Administrator, the Depositor, or the Master Servicer, as
the case may be.

         Section 11.06 GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5- 1401 OF THE
GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE
CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.

         Section 11.07 NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 383 Madison Avenue, New York, New York 10179, Attention: Vice
President-Servicing, telecopier number: (212) 272-5591, or to such other address
as may hereafter be furnished to the other parties hereto in writing; (ii) in
the case of the Trustee, at its Corporate Trust Office, or such other address as
may hereafter be furnished to the other parties hereto in writing; (iii) in the
case of the Company, 383 Madison Avenue, New York, New York 10179, Attention:
Vice President- Servicing, telecopier number: (212) 272-5591, or to such other
address as may hereafter be furnished to the other parties hereto in writing;
(iv) in the case of the Master Servicer or Securities Administrator, Wells Fargo
Bank, National Association, P.O. Box 98, Columbia Maryland 21046 (or, in the
case of overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland 21045)
(Attention: Corporate Trust Services - BART 2004-3), facsimile no.: (410)
715-2380, or such other address as may hereafter be furnished to the other
parties hereto in writing; or (v) in the case of the Rating Agencies, Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10007 and Standard
& Poor's, a division of The McGraw-Hill Companies, Inc., 55 Water Street, New
York, New York 10041. 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.

         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.

                                      -111-

<PAGE>

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

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

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

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

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

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

                  4. The repurchase or substitution of Mortgage Loans;

                  5. The final payment to Certificateholders; and

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

                                        -112-

<PAGE>

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

                                     STRUCTURED ASSET MORTGAGE
                                     INVESTMENTS II INC., as Depositor

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

                                     U.S. BANK NATIONAL ASSOCIATION, as Trustee

                                     By:     /s/ Vaneta I. Bernard
                                        ---------------------------------------
                                     Name:   Vaneta I. Bernard
                                     Title:  Vice President

                                     WELLS FARGO BANK, NATIONAL
                                     ASSOCIATION, as Master Servicer

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

                                     WELLS FARGO BANK, NATIONAL
                                     ASSOCIATION, as Securities Administrator

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

<PAGE>

                                     EMC MORTGAGE CORPORATION

                                     By:     /s/ Sue Stepanek
                                        ---------------------------------------
                                     Name:   Sue Stepanek
                                     Title:  Executive Vice President

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:     /s/ Sue Stepanek
   ------------------------------
Name:   Sue Stepanek
Title:  Executive Vice President

<PAGE>

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

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

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

                                                 ______________________________
                                                         Notary Public

[Notarial Seal]

<PAGE>

STATE OF MASSACHUSETTS          )
                                ) ss.:
COUNTY OF SUFFOLK               )

         On the ___ day of May, 2004 before me, a notary public in and for said
State, personally appeared Vaneta I.. Bernard, known to me to be a Vice
President of U.S. Bank National Association, the entity that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said entity, and acknowledged to me that such entity executed the within
instrument.

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

                                                 ______________________________
                                                         Notary Public

[Notarial Seal]

<PAGE>

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

         On the ____ day of May, 2004 before 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, the entity that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said entity, and acknowledged to me that such entity executed the
within instrument.

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

                                                 ______________________________
                                                         Notary Public

[Notarial Seal]

<PAGE>

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

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

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

                                                 ______________________________
                                                         Notary Public

[Notarial Seal]

<PAGE>

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

         On the ___ day of May, 2004 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]

<PAGE>

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

         On the ___ day of March, 2004 before me, a notary public in and for
said State, personally appeared Sue Stepanek, known to me to be Executive Vice
President of EMC Mortgage Corporation, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.

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

                                                 ______________________________
                                                         Notary Public

[Notarial Seal]

<PAGE>

                                                                     EXHIBIT A-1

                       FORM OF CLASS [_-[A]-_] CERTIFICATE

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

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

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

                                      A-1-1

<PAGE>

<TABLE>
<CAPTION>

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

Class [_-[A]-_] Senior

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

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

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

Assumed Final Distribution Date:
July 25, 2034
</TABLE>

                          BEAR STEARNS ARM TRUST 2004-3
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

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

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

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

                                      A-1-2

<PAGE>

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

                  Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Current Principal Amount hereof at a per annum rate equal to the
Pass-Through Rate set forth above and as further described in the Agreement. The
Trustee will distribute on the 25th day of each month, or, if such 25th day is
not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the calendar month preceding the month of
such Distribution Date, an amount equal to the product of the Fractional
Undivided Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. 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"),
issued in fourteen Classes. The Certificates, in the aggregate, evidence the
entire beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.

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

                                      A-1-3

<PAGE>

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

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

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

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

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

                                      A-1-4

<PAGE>

Mortgage Loans is less than the percentage of the aggregate Outstanding
Principal Balance specified in the Agreement of the Mortgage Loans at the
Cut-off Date. The exercise of such right will effect the early retirement of the
Certificates. In no event, however, will the Trust Fund created by the Agreement
continue beyond the expiration of 21 years after the death of certain persons
identified in the Agreement.

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

                                      A-1-5

<PAGE>

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

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

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

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

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

                                            U.S. BANK NATIONAL ASSOCIATION
                                            Authorized signatory of U.S. Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

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

                                      A-1-6

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

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

Dated:
                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          _____________________________________
                                                  Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

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

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

                                      A-1-7

<PAGE>

                                                                     EXHIBIT A-2

                         FORM OF CLASS[B-_] CERTIFICATE

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

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

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

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

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

                                      A-2-1

<PAGE>

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

         [For Class B-4, Class B-5 and Class B-6][THIS CERTIFICATE HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"),
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB,
WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR"
WITHIN THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D
UNDER THE ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM
PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER
IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND
ANY OTHER APPLICABLE JURISDICTION.]

         [For Class B-4, Class B-5 and Class B-6] [THIS CERTIFICATE MAY NOT BE
ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE CERTIFIES OR
REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT
RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR
CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO,
PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60
OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY

                                      A-2-2

<PAGE>

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

                                      A-2-3

<PAGE>

<TABLE>
<CAPTION>

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

Class [B-_] Subordinate

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

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

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

Assumed Final Distribution Date:
July 25, 2034
</TABLE>

                          BEAR STEARNS ARM TRUST 2004-3
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

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

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

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

                                      A-2-4

<PAGE>

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

                  Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Current Principal Amount hereof at a per annum rate equal to the
Pass-Through Rate set forth above and as further described in the Agreement. The
Trustee will distribute on the 25th day of each month, or, if such 25th day is
not a Business Day, the immediately following Business Day (each, a
"Distribution Date"), commencing on the First Distribution Date specified above,
to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the calendar month preceding the month of
such Distribution Date, an amount equal to the product of the Fractional
Undivided Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to the Holders of Certificates of
the same Class as this Certificate. 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 B-4, Class B-5 and Class][No transfer of this Class
[B-_] Certificate will be made unless such transfer is (i) exempt from the
registration requirements of the Securities act of 1933, as amended, and any
applicable state securities laws or is made in accordance with said Act and laws
and (ii) made in accordance with Section 5.02 of the Agreement. In the event
that such transfer is to be made the Trustee shall register such transfer if,
(i) made to a transferee who has provided the Trustee with evidence as to its
QIB status; or (ii) (A) the transferor has advised the Trustee in writing that
the Certificate is being transferred to an Institutional Accredited Investor and
(B) prior to such transfer the transferee furnishes to the Trustee an Investment
Letter; provided that if based upon an Opinion of Counsel to the effect that (A)
and (B) above are not 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
Trustee shall as a condition of the registration of any such transfer require
the transferor to furnish such other

                                      A-2-5

<PAGE>

certifications, legal opinions or other information prior to registering the
transfer of this Certificate as shall be set forth in such Opinion of Counsel.]

                  [For Class B-1, Class B-2 and Class B-3] [Each beneficial
owner of this Certificate or any interest herein shall be deemed to have
represented, by virtue of its acquisition or holding of this certificate or
interest herein, that either (i) it is not an employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended or section 4975
of the Internal Revenue Code of 1986, as amended ("Plan"), or investing with
assets of a Plan or (ii) it has acquired and is holding such certificate in
reliance on Prohibited Transaction Exemption 90-30, as amended from time to time
("Exemption"), and that it understands that there are certain conditions to the
availability of the Exemption, including that the certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by Standard &
Poor's, Fitch, Inc. or Moody's Investors Service, Inc., and the certificate is
so rated or (iii) (1) it is an insurance company, (2) the source of funds used
to acquire or hold the certificate or interest therein is an "insurance company
general account", as such term is defined in Prohibited Transaction Class
Exemption ("PTCE") 95-60, and (3) the conditions in Sections I and III of PTCE
95-60 have been satisfied.]

         [For Class B-4, Class B-5 and Class B-6] [This Certificate may not be
acquired directly or indirectly by, or on behalf of, an employee benefit plan or
other retirement arrangement which is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended, or Section 4975 of the
Internal Revenue Code of 1986, as amended, unless the transferee certifies or
represents that the proposed transfer and holding of a Certificate and the
servicing, management and operation of the trust and its assets: (i) will not
result in any prohibited transaction which is not covered under an individual or
class prohibited transaction exemption, including, but not limited to,
Prohibited Transaction Exemption ("PTE") 84-14, PTE 91-38, PTE 90-1, PTE 95-60
or PTE 96-23 and (ii) will not give rise to any additional obligations on the
part of the Depositor, the Securities Administrator, the Master Servicer or the
Trustee, which will be deemed represented by an owner of a Book-Entry
Certificate or a Global Certificate or unless the opinion specified in section
5.07 of the Agreement is provided.]

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

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

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

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and

                                      A-2-6

<PAGE>

the Trustee and the rights of the Certificateholders under the Agreement from
time to time by the parties thereto with the consent of the Holders of
Certificates, evidencing Fractional Undivided Interests aggregating not less
than 51% of the Trust Fund (or in certain cases, Holders of Certificates of
affected Classes evidencing such percentage of the Fractional Undivided
Interests thereof). Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

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

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

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

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

                                      A-2-7

<PAGE>

                  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__                      U.S. BANK NATIONAL ASSOCIATION
                                            Not in its individual capacity but
                                            solely as Trustee

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

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

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

                                            U.S. BANK NATIONAL ASSOCIATION
                                            Authorized signatory of U.S. Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

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

                                      A-2-9

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

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

Dated:
                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          _____________________________________
                                                  Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

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

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

                                     A-2-10

<PAGE>

                                                                     EXHIBIT A-3

                         FORM OF CLASS R-[_] CERTIFICATE

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

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

                  THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, 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, THE DEPOSITOR, MASTER SERVICER AND
SECURITIES ADMINISTRATOR AND ON WHICH THEY MAY RELY THAT IS SATISFACTORY TO THE
TRUSTEE THAT THE PURCHASE OF CERTIFICATES ON BEHALF OF SUCH PERSON WILL NOT
RESULT IN OR CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION, IS PERMISSIBLE UNDER
APPLICABLE LAW AND WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART
OF THE DEPOSITOR, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR OR THE
TRUSTEE.

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

                                      A-3-1

<PAGE>

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

                                      A-3-2

<PAGE>

<TABLE>
<CAPTION>

<S>                                                       <C>
Certificate No.1

Class R-[_]

Date of Pooling and Servicing Agreement and               Aggregate Initial Current Principal Amount of
Cut-off Date: May 1, 2004                                 this Certificate as of the Cut-off Date:
                                                          $-----------

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

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

Assumed Final Distribution Date:
July 25, 2034
</TABLE>

                          BEAR STEARNS ARM TRUST 2004-3
                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

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

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

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

                                      A-3-3

<PAGE>

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

                  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, 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
Ownership Interest in this Certificate in violation of such restrictions, then
the Depositor will have the right, in its sole discretion and without notice to
the Holder of this Certificate, to sell this Certificate to a purchaser selected
by the Depositor, which purchaser may be the Depositor, or any affiliate of the
Depositor, on such terms and conditions as the Depositor may choose.

                                      A-3-4

<PAGE>

                  This certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to title I of the Employee Retirement Income Security Act of
1974, as amended, and/or section 4975 of the Internal Revenue Code of 1986, as
amended, unless the proposed transferee provides the Trustee with an opinion of
counsel addressed to the Trustee, the Depositor, Master Servicer and the
Securities Administrator and on which they may rely (which shall not be at the
expense of the Trustee, the Depositor, the Master Servicer or the Securities
Administrator) which is acceptable to the Trustee, that the purchase of this
Certificate will not result in or constitute a nonexempt prohibited transaction,
is permissible under applicable law and will not give rise to any additional
fiduciary obligations on the part of the Depositor, the Master Servicer or the
Trustee.

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

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

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

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

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

                                      A-3-5

<PAGE>

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

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

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

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

                                      A-3-6

<PAGE>

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

Dated: _________, 20__                      U.S. BANK NATIONAL ASSOCIATION
                                            Not in its individual capacity but
                                            solely as Trustee

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

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

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

                                            U.S. BANK NATIONAL ASSOCIATION
                                            Authorized signatory of U.S. Bank
                                            National Association, not in its
                                            individual capacity but solely as
                                            Trustee

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

                                      A-3-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

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

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

Dated:
                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          _____________________________________
                                                  Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

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

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

                                      A-3-8

<PAGE>

                                                                       EXHIBIT B

                             MORTGAGE LOAN SCHEDULE
                             ----------------------

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

(a)      the loan number;

(b)      the Mortgagor's name;

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

(d)      the property type;

(e)      the Mortgage Rate;

(f)      the Servicer;

(g)      the Servicing Rate;

(h)      the Net Rate;

(i)      the original term;

(j)      the maturity date;

(k)      the stated remaining term to maturity;

(l)      the original principal balance;

(m)      the first payment date;

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

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

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

(q)      paid-through date;

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

(s)      the Gross Margin, if applicable;

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

                                       B-1

<PAGE>

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

(v)      the Periodic Rate Cap, if applicable;

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

(x)      which Mortgage Loans adjust after an initial fixed-rate period of
         three, five, seven or ten years;

(y)      The Loan Group; and

(z)      The Prepayment Charge Loans.

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

                                       B-2

<PAGE>

                                                                       EXHIBIT C

                                   [RESERVED]

                                       C-1

<PAGE>

                                                                       EXHIBIT D

                        REQUEST FOR RELEASE OF DOCUMENTS

To:      U.S. Bank National Association
         One Federal Street, 3rd Floor
         Boston, Massachusetts 02110

RE:      Pooling and Servicing Agreement, dated as of
         May 1, 2004, among SAMI II,
         Wells Fargo Bank,
         National Association, as Master Servicer
          and Securities Administrator,
         EMC Mortgage Corporation, as Seller
         and company and U.S. Bank National Association, as Trustee

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

Mortgage Loan Number:
---------------------

Mortgagor Name, Address & Zip Code:
-----------------------------------

Reason for Requesting Documents (check one):
--------------------------------------------

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

_____ 2. Foreclosure

_____ 3. Substitution

_____ 4. Other Liquidation

_____ 5. Nonliquidation                     Reason:
                                                   ----------------------------

_____ 6. California Mortgage Loan paid in full

                                            By:
                                                -------------------------------
                                                     (authorized signer)

                                            Issuer:
                                                     --------------------------
                                            Address:
                                                      -------------------------
                                            Date:
                                                 ------------------------------

                                       D-1

<PAGE>

                                                                       EXHIBIT E

                                FORM OF AFFIDAVIT

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

STATE OF       )
               ) ss:
COUNTY OF      )

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

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

         2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Structured Asset Mortgage
Investments II Inc., Bear Stearns ARM Trust, Mortgage Pass-Through Certificates,
Series 2004-3 Class R-I and Class R-II Certificates (the "Residual
Certificates") for the account of a disqualified organization; (iii) it consents
to any amendment of the Pooling and Servicing Agreement that shall be deemed
necessary by Structured Asset Mortgage Investments II Inc. (upon advice of
counsel) to constitute a reasonable arrangement to ensure that the Residual
Certificates will not be owned directly or indirectly by a disqualified
organization; and (iv) it will not transfer such Residual Certificates unless
(a) it has received from the transferee an affidavit in substantially the same
form as this affidavit containing these same four representations and (b) as of
the time of the transfer, it does not have actual knowledge that such affidavit
is false.

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

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

                                       E-1

<PAGE>

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

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

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

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

                                    [NAME OF INVESTOR]

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

                                          Address of Investor
                                          for receipt of tax
                                          information:

                                       E-2

<PAGE>

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

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

NOTARY PUBLIC

COUNTY OF

STATE OF

My commission expires the ___ day of ___________________, 20___.

                                       E-3

<PAGE>

                                                                     EXHIBIT F-1

                            FORM OF INVESTMENT LETTER

                                                                          [Date]
[SELLER]

U.S. Bank National Association
One Federal Street, 3rd Floor
Boston, Massachusetts 02110

Structured Asset Mortgage Investments II Inc.
383 Madison Avenue
New York, New York 10179

         Re:      Structured Asset Mortgage Investments II Inc., Bear Stearns
                  ARM Trust, Series 2004-3 Mortgage Pass-Through Certificates
                  (the "Certificates"), including the Class B-4, Class B-5 and
                  Class B-6 Certificates (the "Privately Offered Certificates")
                  -------------------------------------------------------------

Dear Ladies and Gentlemen:

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

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

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

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

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

                                      F-1-1

<PAGE>

                  (v)      we agree the Privately Offered Certificates must be
                           held indefinitely by us (and may not be sold,
                           pledged, hypothecated or in any way disposed of)
                           unless subsequently registered under the Act and any
                           applicable state securities or "Blue Sky" laws or an
                           exemption from the registration requirements of the
                           Act and any applicable state securities or "Blue Sky"
                           laws is available;

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

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

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

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

                  (viii)   we either: (i) are not acquiring the Privately
                           Offered Certificate directly or indirectly by, or on
                           behalf of, an employee benefit plan or other
                           retirement arrangement which is subject to Title I of
                           the Employee Retirement Income Security Act of 1974,
                           as amended, or section 4975 of the Internal Revenue
                           Code of 1986, as amended, or (ii) are providing a
                           representation to the effect that the proposed
                           transfer and holding of a Privately Offered
                           Certificate and the servicing, management and
                           operation of the Trust and its assets: (I) will not
                           result in any prohibited transaction which is not
                           covered under an

                                      F-1-2

<PAGE>

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

                                      F-1-3

<PAGE>

                           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 May 1, 2004, 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 U.S. Bank National Association, as
Trustee (the "Pooling and Servicing Agreement').

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

Name of Nominee (if any):
                          ---------------------------------

                                      F-1-4

<PAGE>

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

                                         Very truly yours,

                                         [PURCHASER]

                                         By:
                                              ---------------------------------
                                                  (Authorized Officer)

                                         [By:
                                             ----------------------------------
                                                  Attorney-in-fact]

                                      F-1-5

<PAGE>

                             Nominee Acknowledgment

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

                                            [NAME OF NOMINEE]

                                            By:
                                               ---------------------------------
                                                     (Authorized Officer)

                                            [By:
                                                  ------------------------------
                                                     Attorney-in-fact]

                                      F-1-6

<PAGE>

                                                                     EXHIBIT F-2

                FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE

[SELLER] [Date]

U.S. Bank National Association
One Federal Street, 3rd Floor
Boston, Massachusetts 02110

Structured Asset Mortgage Investments II Inc.
383 Madison Avenue
New York, New York 10179

         Re:      Structured Asset Mortgage Investments II Inc., Bear Stearns
                  ARM Trust, Series 2004-3 Mortgage Pass-Through Certificates,
                  Class B-4, Class B-5, Class B-6 Certificates (the "Privately
                  Offered Certificates")
                  -------------------------------------------------------------

Dear Ladies and Gentlemen:

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

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

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

         Amount: $ _____________________; and

2.       The dollar amount set forth above is:

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

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

-------------
1        A purchase by an insurance company for one or more of its separate
         accounts, as defined by Section 2(a)(37) of the Investment Company Act
         of 1940, which are neither registered nor required to be registered
         thereunder, shall be deemed to be a purchase for the account of such
         insurance company.

                                      F-2-1

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                                      F-2-2

<PAGE>

         The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by Rule 144A. The undersigned understands that the Privately
Offered Certificates may be resold, pledged or transferred only to (i) a person
reasonably believed to be a Qualified Institutional Buyer that purchases for its
own account or for the account of a Qualified Institutional Buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance in Rule
144A, or (ii) an institutional "accredited investor," as such term is defined
under Rule 501 of the Act in a transaction that otherwise does not constitute a
public offering.

         The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement, dated as of May 1, 2004, among Structured Asset Mortgage
Investments II Inc., Wells Fargo Bank, National Association, EMC Mortgage
Corporation and U.S. Bank National Association, as Trustee, pursuant to
Certificates were issued.

         The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement arrangement which is subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended, 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 Privately Offered Certificate and the servicing, management and
operation of the Trust and its assets: (I) will not result in any prohibited
transaction which is not covered under 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]

                                      F-2-4

<PAGE>

                             Nominee Acknowledgment

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

                                   [NAME OF NOMINEE]

                                   By:
                                       ----------------------------------------
                                            (Authorized Officer)

                                   [By:
                                        ---------------------------------------
                                            Attorney-in-fact]

                                      F-2-5

<PAGE>

                                                                       EXHIBIT G

                           FORM OF CUSTODIAL AGREEMENT

                  THIS CUSTODIAL AGREEMENT (as amended and supplemented from
time to time, the "Agreement'), dated as of May 28, 2004, by and among U.S. BANK
NATIONAL ASSOCIATION, not individually but solely as trustee under the Pooling
and Servicing Agreement defined below (including its successors under the
Pooling and Servicing Agreement defined below, the "Trustee"), STRUCTURED ASSET
MORTGAGE INVESTMENTS II INC., as depositor (together with any successor in
interest, the "Depositor"), WELLS FARGO BANK, 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 (the "Seller") have entered into a Pooling and
Servicing Agreement, dated as of May 1, 2004, relating to the issuance of Bear
Stearns ARM Trust 2004-3, Mortgage Pass-Through Certificates, Series 2004-3 (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:

                  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>

                  II. CUSTODY OF MORTGAGE DOCUMENTS

                  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.

                  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.

                  2.3. REVIEW OF MORTGAGE FILES.

                  (a) On or prior to the Closing Date, in accordance with
         Section 2.02 of the Pooling and Servicing Agreement, the Custodian
         shall deliver to the Trustee an Initial Certification in the form
         annexed hereto as Exhibit One evidencing receipt (subject to any
         exceptions noted therein) of a Mortgage File for each of the Mortgage
         Loans listed on the Schedule attached hereto (the "Mortgage Loan
         Schedule").

                  (b) Within 90 days of the Closing Date, the Custodian agrees,
         for the benefit of Certificateholders, to review, in accordance with
         the provisions of Section 2.02 of the Pooling and Servicing Agreement,
         each such document, and shall deliver to the Depositor and the Trustee
         an Interim Certification in the form annexed hereto as Exhibit Two to
         the effect that all such documents have been executed and received and
         that such documents relate to the Mortgage Loans identified on the
         Mortgage Loan Schedule, except for any exceptions listed on Schedule A
         attached to such Interim Certification. The Custodian shall be under no
         duty or obligation to inspect, review or examine said documents,
         instruments, certificates or other papers to determine that the same
         are genuine, enforceable, or appropriate for the represented purpose or
         that they have actually been recorded or that they are other than what
         they purport to be on their face.

                  (c) Not later than 180 days after the Closing Date, the
         Custodian shall review the Mortgage Files as provided in Section 2.02
         of the Pooling and Servicing Agreement and deliver to the Depositor and
         the Trustee a Final Certification in the form annexed hereto as Exhibit
         Three evidencing the completeness of the Mortgage Files.

                  (d) In reviewing the Mortgage Files as provided herein and in
         the Pooling and Servicing Agreement, the Custodian shall make no
         representation as to and shall not be

                                       G-2

<PAGE>

         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.

                  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.

                  2.5. CUSTODIAN TO COOPERATE: RELEASE OF MORTGAGE FILES. Upon
receipt of written notice from the Trustee that the Seller has repurchased a
Mortgage Loan pursuant to Article II of the Pooling and Servicing Agreement, and
that the purchase price therefore has been deposited in the Master Servicer
Collection Account or the Distribution Account, then the Custodian agrees to
promptly release to the Seller the related Mortgage File.

                  Upon the Custodian's receipt of a request for release (a
"Request for Release") substantially in the form of Exhibit D to the Pooling and
Servicing Agreement signed by a Servicing Officer of the related Servicer
stating that it has received payment in full of a Mortgage Loan or that payment
in full will be escrowed in a manner customary for such purposes, the Custodian
agrees promptly to release to the related Servicer the related Mortgage File.
The Depositor shall deliver to the Custodian and the Custodian agrees to accept
the Mortgage Note and other documents constituting the Mortgage File with
respect to any Substitute Mortgage Loan.

                  From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Insurance Policy, the related Servicer (or if the Servicer does not,
the Master Servicer) shall deliver to the Custodian a Request for Release signed
by a Servicing Officer requesting that possession of all of the Mortgage File be
released to the related Servicer and certifying as to the reason for such
release and that such release will not invalidate any insurance coverage
provided in respect of the Mortgage Loan under any of the Insurance Policies.
Upon receipt of the foregoing, the Custodian shall deliver the Mortgage File to
the related Servicer. The related Servicer shall cause each Mortgage File or any
document therein so released to be returned to the Custodian when the need
therefore by the related Servicer no longer exists, unless (i) the Mortgage Loan
has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have been deposited in the Master Servicer Collection Account or the
Distribution Account or (ii) the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the related Servicer has delivered to the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery.

                                       G-3

<PAGE>

                  At any time that a Servicer is required to deliver to the
Custodian a Request for Release, the Servicer shall deliver two copies of the
Request for Release if delivered in hard copy or the Servicer may furnish such
Request for Release electronically to the Custodian, in which event the
Servicing Officer transmitting the same shall be deemed to have signed the
Request for Release. In connection with any Request for Release of a Mortgage
File because of a repurchase of a Mortgage Loan, such Request for Release shall
be followed by an assignment of mortgage, without recourse, representation or
warranty from the Trustee to the Seller and the related Mortgage Note shall be
endorsed without recourse by the Trustee and be returned to the Seller. In
connection with any Request for Release of a Mortgage File because of the
payment in full of a Mortgage Loan, such Request for Release shall be
accompanied by a certificate of satisfaction or other similar instrument to be
executed by or on behalf of the Trustee and returned to the related Servicer.

                  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.

                  III. CONCERNING THE CUSTODIAN

                  3.1. CUSTODIAN AS BAILEE AND AGENT OF THE TRUSTEE. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Mortgage File which are delivered to the Custodian, the Custodian is exclusively
the bailee and custodial agent of the Trustee and has no instructions to hold
any Mortgage Note or Mortgage for the benefit of any person other than the
Trustee and the Certificateholders and undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement and in the
Pooling and Servicing Agreement. Except upon compliance with the provisions of
Section 2.5 of this Agreement, no Mortgage Note, Mortgage or Mortgage File shall
be delivered by the Custodian to the Depositor, the Servicers or the Master
Servicer or otherwise released from the possession of the Custodian.

                  3.2. RESERVED.

                  3.3. CUSTODIAN MAY OWN CERTIFICATES. The Custodian in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Custodian.

                  3.4. MASTER SERVICER TO PAY CUSTODIAN'S FEES AND EXPENSES. The
Master Servicer covenants and agrees to pay to the Custodian from time to time,
and the Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the

                                       G-4

<PAGE>

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.

                  3.5. CUSTODIAN MAY RESIGN TRUSTEE MAY REMOVE CUSTODIAN. The
Custodian may resign from the obligations and duties hereby imposed upon it as
such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such written notice of resignation, the Trustee shall
either take custody of the Mortgage Files itself and give prompt written notice
thereof to the Depositor, the Master Servicer and the Custodian, or promptly
appoint a successor Custodian by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Custodian and one copy to
the successor Custodian. If the Trustee shall not have taken custody of the
Mortgage Files and no successor Custodian shall have been so appointed and have
accepted appointment within 30 days after the giving of such written notice of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.

                  The Trustee may remove the Custodian at any time with the
consent of the Master Servicer. In such event, the Trustee shall appoint, or
petition a court of competent jurisdiction to appoint, a successor Custodian
hereunder. Any successor Custodian shall be a depository institution subject to
supervision or examination by federal or state authority, shall be able to
satisfy the other requirements contained in Section 3.7 and shall be
unaffiliated with the Servicer or the Depositor.

                  Any resignation or removal of the Custodian and appointment of
a successor Custodian pursuant to any of the provisions of this Section 3.5
shall become effective upon acceptance of appointment by the successor
Custodian. The Trustee shall give prompt notice to the Depositor and the Master
Servicer of the appointment of any successor Custodian. No successor Custodian
shall be appointed by the Trustee without the prior approval of the Depositor
and the Master Servicer.

                  3.6. MERGER OR CONSOLIDATION OF CUSTODIAN. Any Person into
which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  3.7. REPRESENTATIONS OF THE CUSTODIAN. The Custodian hereby
represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.

                                       G-5

<PAGE>

                  IV. MISCELLANEOUS PROVISIONS

                  4.1. Notices. All notices, requests, consents and demands and
other communications required under this Agreement or pursuant to any other
instrument or document delivered hereunder shall be in writing and, unless
otherwise specifically provided, may be delivered personally, by telegram or
telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.

                  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.

                  4.3. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

                  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.

                  4.5. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.

                                       G-6

<PAGE>

                  IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.

Address:                              U.S. BANK NATIONAL ASSOCIATION,
                                      not individually but solely as Trustee
One Federal Street
3rd Floor
Boston, Massachusetts 02110           By:
                                          ------------------------------------
                                      Name:   Vaneta I. Bernard
Attention:                            Title:  Vice President
Telecopy:
Confirmation:
Address:                              STRUCTURED ASSET MORTGAGE
                                      INVESTMENTS II INC.
383 Madison Avenue
New York, New York 10179
                                      By:
                                          ------------------------------------
                                      Name:   Baron Silverstein
                                      Title:  Vice President

Address:                              WELLS FARGO BANK,
                                      NATIONAL ASSOCIATION, as Master
9062 Old Annapolis Road               Servicer
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

                                       G-7

<PAGE>

STATE OF MASSACHUSETTS           )
                                 )ss.:
COUNTY OF BOSTON                 )

                  On the 28th day of May 2004 before me, a notary public in and
for said State, personally appeared Vaneta I. Bernard, known to me to be a Vice
President of U.S. Bank National Association, a national banking association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation and acknowledged to me that such
corporation executed the within instrument.

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

                                           ____________________________________
                                                       Notary Public

[SEAL]

                                       G-8

<PAGE>

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

                  On the 28th day of May 2004 before me, a notary public in and
for said State, personally appeared Stacey Taylor, known to me to be an
Assistant Vice President of Wells Fargo Bank, 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-9

<PAGE>

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

                  On the 28th day of May 2004 before me, a notary public in and
for said State, personally appeared Baron Silverstein, known to me to be a Vice
President of Structured Asset Mortgage Investments II Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

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

                                           ____________________________________
                                                       Notary Public
[Notarial Seal]

                                      G-10

<PAGE>

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

                  On the 28th day of May 2004 before me, a notary public in and
for said State, personally appeared Stacey Taylor, known to me to be an
Assistant Vice President of Wells Fargo Bank, 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-11

<PAGE>

                                   EXHIBIT ONE

                     FORM OF CUSTODIAN INITIAL CERTIFICATION

                                                        May __, 2004

<TABLE>
<CAPTION>

<S>                                       <C>
U.S. Bank National Association            Structured Asset Mortgage Investments II Inc.
One Federal Street, 3rd Floor             383 Madison Avenue
Boston, Massachusetts 02110               New York, New York 10179
</TABLE>

Attention: Structured Asset Mortgage Investments II Inc.
Bear Stearns ARM Trust 2004-3, Mortgage Pass-Through Certificates, Series 2004-3

         Re:      Custodial Agreement, dated as of May 28, 2004, by and among
                  U.S. Bank National Association, Structured Asset Mortgage
                  Investments II Inc. and Wells Fargo Bank , National
                  Association relating to Bear Stearns ARM Trust 2004-3,
                  Mortgage Pass-Through Certificates, Series 2004-3
                  -------------------------------------------------

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-12

<PAGE>

                                   EXHIBIT TWO

                     FORM OF CUSTODIAN INTERIM CERTIFICATION

                                                    ___________, 20__

<TABLE>
<CAPTION>

<S>                                           <C>
U.S. Bank National Association                Structured Asset Mortgage Investments II Inc.
One Federal Street, 3rd Floor                 383 Madison Avenue
Boston, Massachusetts 02110                   New York, New York 10179
</TABLE>

Attention:  Structured Asset Mortgage Investments II Inc.
Bear Stearns ARM Trust 2004-3, Mortgage Pass-Through Certificates, Series 2004-3

         Re:      Custodial Agreement, dated as of May 28, 2004, by and among
                  U.S. Bank National Association, Structured Asset Mortgage
                  Investments II Inc. and Wells Fargo Bank , National
                  Association relating to Bear Stearns ARM Trust 2004-3,
                  Mortgage Pass-Through Certificates, Series 2004-3
                  -------------------------------------------------

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-13

<PAGE>

                                  EXHIBIT THREE

                      FORM OF CUSTODIAN FINAL CERTIFICATION

                                                      _______, 20__

<TABLE>
<CAPTION>

<S>                                       <C>
U.S. Bank National Association            Structured Asset Mortgage Investments II Inc.
One Federal Street, 3rd Floor             383 Madison Avenue
Boston, Massachusetts 02110               New York, New York 10179
</TABLE>

Attention: Structured Asset Mortgage Investments II Inc.
Bear Stearns ARM Trust 2004-3, Mortgage Pass-Through Certificates, Series 2004-3

         Re:      Custodial Agreement, dated as of May 28, 2004, by and among
                  U.S. Bank National Association, Structured Asset Mortgage
                  Investments II Inc. and Wells Fargo Bank , National
                  Association relating to Bear Stearns ARM Trust 2004-3,
                  Mortgage Pass-Through Certificates, Series 2004-3
                  -------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.3(c) 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 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
or in the Pooling and Servicing Agreement, as applicable.

                                       WELLS FARGO BANK, NATIONAL ASSOCIATION

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

                                      G-14

<PAGE>

                                                                     EXHIBIT H-1

                               SERVICING AGREEMENT

                                   COUNTRYWIDE
                             [provided upon request]

                                      H-1-1

<PAGE>

                                                                     EXHIBIT H-2

                               SERVICING AGREEMENT

                                    EVERHOME

                             [provided upon request]

                                      H-2-1

<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 May 28, 2004, as
amended and supplemented by any and all amendments hereto (collectively, the
"AGREEMENT"), by and between EMC MORTGAGE CORPORATION, a Delaware corporation
(the "MORTGAGE LOAN SELLER") and STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
a Delaware corporation (the "PURCHASER").

                  Upon the terms and subject to the conditions of this
Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, first lien mortgage loans secured primarily by
one- to four-family residential properties, an interest in shares issued by a
cooperative apartment corporation and the related proprietary lease and
individual condominium units (collectively, the "MORTGAGE LOANS") as described
herein. The Purchaser intends to deposit the Mortgage Loans into a trust fund
(the "TRUST FUND") and create Bear Stearns ARM Trust 2004-3, Mortgage
Pass-Through Certificates, Series 2004-3 (the "CERTIFICATES"), under a pooling
and servicing agreement, to be dated as of May 1, 2004 (the "POOLING AND
SERVICING AGREEMENT"), among the Purchaser, as depositor, Wells Fargo Bank,
National Association, as master servicer and securities administrator, U.S. Bank
National Association, as trustee (the "TRUSTEE") and EMC Mortgage Corporation,
as seller and company.

                  The Purchaser has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (Number
333-115122) relating to its Mortgage Pass-Through Certificates and the offering
of certain series thereof (including certain classes of the Certificates) from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder
(the "SECURITIES ACT"). Such registration statement, when it became effective
under the Securities Act, and the prospectus relating to the public offering of
certain classes of the Certificates by the Purchaser (the "PUBLIC OFFERING"), as
each may be amended or supplemented from time to time pursuant to the Securities
Act or otherwise, are referred to herein as the "REGISTRATION STATEMENT" and the
"PROSPECTUS," respectively. The "PROSPECTUS SUPPLEMENT" shall mean that
supplement, dated May 25, 2004, to the Prospectus, dated May 14, 2004, relating
to certain classes of the Certificates. With respect to the Public Offering of
certain classes of the Certificates, the Purchaser and Bear, Stearns & Co. Inc.
("BEAR STEARNS") have entered into a terms agreement dated as of May 25, 2004 to
an underwriting agreement dated July 29, 2003, between the Purchaser and Bear
Stearns (collectively, the "UNDERWRITING AGREEMENT").

                  Now, therefore, in consideration of the premises and the
mutual agreements set forth herein, the parties hereto agree as follows:

                                       J-1

<PAGE>

                  SECTION 1. DEFINITIONS. Certain terms are defined herein.
Capitalized terms used herein but not defined herein shall have the meanings
specified in the Pooling and Servicing Agreement. The following other terms are
defined as follows:

                  ACQUISITION PRICE: Cash in an amount equal to $______ (plus
$______ in accrued interest)2.

                  BEAR STEARNS: Bear, Stearns & Co. Inc.

                  CLOSING DATE: May 28, 2004.

                  CUT-OFF DATE: May 1, 2004.

                  CUT-OFF DATE BALANCE: $1,506,813,223.95.

                  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.

                  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.

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

                  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.

--------
         2Please contact Bear, Stearns & Co. Inc. for Purchase Price.

                                       J-2

<PAGE>

                  NET RATE: For each Mortgage Loan, the Mortgage Interest Rate
for such Mortgage Loan less the Servicing Fee Rate and the Lender-Paid PMI Rate
(if applicable).

                  OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to
the Trustee.

                  PERSON: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

                  PURCHASE PRICE: With respect to any Mortgage Loan (or any
property acquired with respect thereto) required to be repurchased by the
Mortgage Loan Seller pursuant to this Agreement or Article II of the Pooling and
Servicing Agreement, an amount equal to the sum of (i)(a) 100% of the
Outstanding Principal Balance of such Mortgage Loan as of the date of repurchase
(or if the related Mortgaged Property was acquired with respect thereto, 100% of
the Outstanding Principal Balance at the date of the acquisition), plus (b)
accrued but unpaid interest on the Outstanding Principal Balance at the related
Mortgage Interest Rate, through and including the last day of the month of
repurchase, plus (c) any unreimbursed Monthly Advances and servicing advances
payable to the Servicer of the Mortgage Loan and (ii) any costs and damages (if
any) incurred by the Trust in connection with any violation of such Mortgage
Loan of any predatory lending laws.

                  RATING AGENCIES: Standard & Poor's and Moody's, each a "RATING
AGENCY."

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

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

                  SERVICING AGREEMENTS: Shall have the meaning assigned to such
term in the Pooling and Servicing Agreement.

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

                  SUBSTITUTE MORTGAGE LOAN: A mortgage loan substituted for a
Deleted Mortgage Loan which must meet on the date of such substitution the
requirements stated herein and in the Pooling and Servicing Agreement; upon such
substitution, such mortgage loan shall be a "Mortgage Loan" hereunder.

                  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.

                                       J-3

<PAGE>

                  SECTION 2. PURCHASE AND SALE OF THE MORTGAGE LOANS AND RELATED
RIGHTS. (a) Upon satisfaction of the conditions set forth in Section 10 hereof,
the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate outstanding principal balance as of the
Cut-off Date equal to the Cut-off Date Balance.

                  (b) The closing for the purchase and sale of the Mortgage
Loans and the closing for the issuance of the Certificates will take place on
the Closing Date at the office of the Purchaser's counsel in New York, New York
or such other place as the parties shall agree.

                  (c) Upon the satisfaction of the conditions set forth in
Section 10 hereof, on the Closing Date, the Purchaser shall pay to the Mortgage
Loan Seller the Acquisition Price for the Mortgage Loans in immediately
available funds by wire transfer to such account or accounts as shall be
designated by the Mortgage Loan Seller.

                  (d) In addition to the foregoing, on the Closing Date the
Mortgage Loan Seller assigns to the Purchaser all of its right, title and
interest in the Servicing Agreements (other than its right to enforce the
representations and warranties set forth therein).

                  SECTION 3. MORTGAGE LOAN SCHEDULES. The Mortgage Loan Seller
agrees to provide to the Purchaser as of the date hereof a preliminary listing
of the Mortgage Loans (the "PRELIMINARY MORTGAGE LOAN SCHEDULE") setting forth
the information listed on EXHIBIT 2 to this Agreement with respect to each of
the Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "FINAL
MORTGAGE LOAN SCHEDULE") setting forth the information listed on EXHIBIT 2 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "AMENDMENT"). If there are no changes to the
Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall
be the Final Mortgage Loan Schedule for all purposes hereof.

                  SECTION  4.  MORTGAGE LOAN TRANSFER.

                  (a) The Purchaser will be entitled to all scheduled payments
of principal and interest on the Mortgage Loans due after the Cut-off Date
(regardless of when actually collected) and all payments thereon, other than
scheduled principal and interest due on or before the Cut-off Date but received
after the Cut-off Date. The Mortgage Loan Seller will be entitled to all
scheduled payments of principal and interest on the Mortgage Loans due on or
before the Cut-off Date (including payments collected after the Cut-off Date)
and all payments thereon, other than scheduled principal and interest due after
the Cut-off Date but received on or before the Cut-off Date. Such 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.

                                       J-4

<PAGE>

                  (b) Pursuant to various conveyancing documents to be executed
on the Closing Date and pursuant to the Pooling and Servicing Agreement, the
Purchaser will assign on the Closing Date all of its right, title and interest
in and to the Mortgage Loans to the Trustee for the benefit of the
Certificateholders. In connection with the transfer and assignment of the
Mortgage Loans, the Mortgage Loan Seller has delivered or will deliver or cause
to be delivered to the Trustee by the Closing Date or such later date as is
agreed to by the Purchaser and the Mortgage Loan Seller (each of the Closing
Date and such later date is referred to as a "MORTGAGE FILE DELIVERY DATE"), the
items of each Mortgage File, PROVIDED, HOWEVER, that in lieu of the foregoing,
the Mortgage Loan Seller may deliver the following documents, under the
circumstances set forth below: (w) in lieu of the original Security Instrument,
assignments to the Trustee or intervening assignments thereof which have been
delivered, are being delivered or will, upon receipt of recording information
relating to the Security Instrument required to be included thereon, be
delivered to recording offices for recording and have not been returned to the
Mortgage Loan Seller in time to permit their delivery as specified above, the
Mortgage Loan Seller may deliver a true copy thereof with a certification by the
Mortgage Loan Seller, on the face of such copy, substantially as follows:
"Certified to be a true and correct copy of the original, which has been
transmitted for recording"; (x) in lieu of the Security Instrument, assignments
to the Trustee or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents (as evidenced by a
certification from the Mortgage Loan Seller to such effect) the Mortgage Loan
Seller may deliver photocopies of such documents containing an original
certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; (y) in lieu of the Mortgage
Notes relating to the Mortgage Loans, each identified in the list delivered by
the Purchaser to the Trustee on the Closing Date and attached hereto as Exhibit
5, the Mortgage Loan Seller may deliver lost note affidavits and indemnities of
the Mortgage Loan Seller; and (z) the Mortgage Loan Seller shall not be required
to deliver intervening assignments or Mortgage Note endorsements between the
related Underlying Seller and the Mortgage Loan Seller, between the Mortgage
Loan Seller and the Depositor, and between the Depositor and the Trustee; and
provided further, however, that in the case of Mortgage Loans which have been
prepaid in full after the Cut-off Date and prior to the Closing Date, the
Mortgage Loan Seller, in lieu of delivering the above documents, may deliver to
the Trustee a certification by the Mortgage Loan Seller or the Master Servicer
to such effect and shall deposit all amounts paid in respect of such Mortgage
Loans in the Master Servicer Collection Account on the Closing Date. The
Mortgage Loan Seller shall deliver such original documents (including any
original documents as to which certified copies had previously been delivered)
or such certified copies to the Trustee promptly after they are received. The
Mortgage Loan Seller shall cause the Mortgage and intervening assignments, if
any, and the assignment of the Security Instrument to be recorded not later than
180 days after the Closing Date, unless such assignment is not required to be
recorded under the terms set forth in Section 6(a) hereof.

                  (c) In connection with the assignment of any Mortgage Loan
registered on the MERS(R) System, the Mortgage Loan Seller further agrees that
it will cause, at the Mortgage Loan Seller's own expense, within 30 days after
the Closing Date, the MERS(R) System to indicate that such Mortgage Loans have
been assigned by the Mortgage Loan Seller to the Purchaser and by the Purchaser
to the Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in

                                       J-5

<PAGE>

connection with such Mortgage Loans. The Mortgage Loan Seller further agrees
that it will not, and will not permit any Servicer or the Master Servicer to,
and the Master Servicer agrees that it will not, alter the codes referenced in
this paragraph with respect to any Mortgage Loan during the term of the Pooling
and Servicing Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of the Pooling and Servicing Agreement.

                  (d) The Mortgage Loan Seller and the Purchaser acknowledge
hereunder that all of the Mortgage Loans and the related servicing will
ultimately be assigned to U.S. Bank National Association, as Trustee for the
Certificateholders, on the date hereof.

                  SECTION 5. EXAMINATION OF MORTGAGE FILES.

                  (a) On or before the Mortgage File Delivery Date, the Mortgage
Loan Seller will have made the Mortgage Files available to the Purchaser or its
agent for examination which may be at the offices of the Trustee or the Mortgage
Loan Seller and/or the Mortgage Loan Seller's custodian. The fact that the
Purchaser or its agent has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files shall not affect the Purchaser's
rights to demand cure, repurchase, substitution or other relief as provided in
this Agreement. In furtherance of the foregoing, the Mortgage Loan Seller shall
make the Mortgage Files available to the Purchaser or its agent from time to
time so as to permit the Purchaser to confirm the Mortgage Loan Seller's
compliance with the delivery and recordation requirements of this Agreement and
the Pooling and Servicing Agreement. In addition, upon request of the Purchaser,
the Mortgage Loan Seller agrees to provide to the Purchaser, Bear Stearns and to
any investors or prospective investors in the Certificates information regarding
the Mortgage Loans and their servicing, to make the Mortgage Files available to
the Purchaser, Bear Stearns and to such investors or prospective investors
(which may be at the offices of the Mortgage Loan Seller and/or the Mortgage
Loan Seller's custodian) and to make available personnel knowledgeable about the
Mortgage Loans for discussions with the Purchaser, Bear Stearns and such
investors or prospective investors, upon reasonable request during regular
business hours, sufficient to permit the Purchaser, Bear Stearns and such
investors or potential investors to conduct such due diligence as any such party
reasonably believes is appropriate.

                  (b) Pursuant to the Pooling and Servicing Agreement, on the
Closing Date the Custodian, on behalf of the Trustee, for the benefit of the
Certificateholders, will acknowledge receipt of each Mortgage Loan, by delivery
to the Mortgage Loan Seller, the Purchaser and the Trustee of an initial
certification in the form attached as Exhibit One to the Custodial Agreement.

                  (c) Pursuant to the Pooling and Servicing Agreement, within 90
days of the Closing Date (or, with respect to any Substitute Mortgage Loan,
within five Business Days after the receipt by the Trustee or Custodian
thereof), the Trustee will review or shall cause the Custodian to review items
of the Mortgage Files as set forth on EXHIBIT 1 and will deliver to the Mortgage
Loan Seller, the Purchaser and the Trustee an interim certification
substantially in the form of Exhibit Two to the Custodial Agreement. If the
Trustee or Custodian, as its agent, finds any document listed on 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

                                       J-6

<PAGE>

Material Defect. The Mortgage Loan Seller shall correct or cure any such
Material Defect within 90 days from the date of notice from the Trustee or the
Custodian, as its agent, of the Material Defect and if the Mortgage Loan Seller
fails to correct or cure such Material Defect within such period and such defect
materially and adversely affects the interests of the Certificateholders in the
related Mortgage Loan, the Mortgage Loan Seller will, in accordance with the
terms of the Pooling and Servicing Agreement, within 90 days of the date of
notice, provide the Trustee with a Substitute Mortgage Loan (if within two years
of the Closing Date) or purchase the related Mortgage Loan at the applicable
Purchase Price; PROVIDED THAT, if such defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure, repurchase or substitution must occur within 90 days from
the date such breach was discovered; PROVIDED, HOWEVER, that if such defect
relates solely to the inability of the Mortgage Loan Seller to deliver the
original Security Instrument or intervening assignments thereof, or a certified
copy because the originals of such documents, or a certified copy, have not been
returned by the applicable jurisdiction, the Mortgage Loan Seller shall not be
required to purchase such Mortgage Loan if the Mortgage Loan Seller delivers
such original documents or certified copy promptly upon receipt, but in no event
later than 360 days after the Closing Date. The foregoing repurchase obligation
shall not apply in the event that the Mortgage Loan Seller cannot deliver such
original or copy of any document submitted for recording to the appropriate
recording office in the applicable jurisdiction because such document has not
been returned by such office; provided that the Mortgage Loan Seller shall
instead deliver a recording receipt of such recording office or, if such receipt
is not available, a certificate confirming that such documents have been
accepted for recording, and delivery to the Trustee or the Custodian, as its
agent, shall be effected by the Mortgage Loan Seller within thirty days of its
receipt of the original recorded document.

                  (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 original
documents or certified copy promptly upon receipt, but

                                       J-7

<PAGE>

in no event later than 360 days after the Closing Date. The foregoing repurchase
obligation shall not apply in the event that the Mortgage Loan Seller cannot
deliver such original or copy of any document submitted for recording to the
appropriate recording office in the applicable jurisdiction because such
document has not been returned by such office; provided that the Mortgage Loan
Seller shall instead deliver a recording receipt of such recording office or, if
such receipt is not available, a certificate confirming that such documents have
been accepted for recording, and delivery to the Trustee or the Custodian, as
its agent, shall be effected by the Mortgage Loan Seller within thirty days of
its receipt of the original recorded document.

                  (e) At the time of any substitution, the Mortgage Loan Seller
shall deliver or cause to be delivered the Substitute Mortgage Loan, the related
Mortgage File and any other documents and payments required to be delivered in
connection with a substitution pursuant to the Pooling and Servicing Agreement.
At the time of any purchase or substitution, the Trustee in accordance with the
terms of the Pooling and Servicing Agreement shall (i) assign to the Mortgage
Loan Seller and cause the Custodian to release the documents (including, but not
limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File)
in the possession of the Custodian relating to the Deleted Mortgage Loan and
(ii) execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be necessary to vest in the Mortgage Loan Seller
title to such Deleted Mortgage Loan.

                  SECTION  6.  RECORDATION OF ASSIGNMENTS OF MORTGAGE.

                  (a) The Mortgage Loan Seller shall cause each assignment of
the Security Instrument from the Mortgage Loan Seller to the Trustee to be
recorded not later than 180 days after the Closing Date, unless (a) such
recordation is not required by the Rating Agencies or an Opinion of Counsel has
been provided to the Trustee (with a copy to the Custodian) which states that
the recordation of such assignments is not necessary to protect the interests of
the Certificateholders in the related Mortgage Loans or (b) MERS is identified
on the Mortgage or a properly recorded assignment of the Mortgage, as the
Mortgagee of record solely as nominee for the Mortgage Loan Seller and its
successors and assigns; PROVIDED, HOWEVER, notwithstanding the foregoing, each
assignment shall be submitted for recording by the Mortgage Loan Seller in the
manner described above, at no expense to the Trust or Trustee, upon the earliest
to occur of (i) reasonable direction by the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the Trust, (ii)
the occurrence of a Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgage Loan Seller and (iv) the
occurrence of a servicing transfer as described in Section 8.02 of the Pooling
and Servicing Agreement.

                  While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Trustee a certified copy of such Mortgage or assignment. All customary recording
fees and reasonable expenses relating to the recordation of the assignments of
mortgage to the Trustee or the Opinion of Counsel, as the case may be, shall be
borne by the Mortgage Loan Seller.

                  (b) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Mortgage Loan Seller to the Purchaser,
as contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be

                                       J-8

<PAGE>

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
         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 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;

                                       J-9

<PAGE>

                  (iii) Each Mortgage Loan at the time it was made complied in
         all material respects with all applicable laws and regulations,
         including, without limitation, usury, equal credit opportunity,
         disclosure and recording laws and all predatory lending laws; and each
         Mortgage Loan has been serviced in all material respects in accordance
         with all applicable laws and regulations, including, without
         limitation, usury, equal credit opportunity, disclosure and recording
         laws and all predatory lending laws and the terms of the related
         Mortgage Note, the Mortgage and other loan documents;

                  (iv) there is no monetary default existing under any Mortgage
         or the related Mortgage Note and there is no material event which, with
         the passage of time or with notice and the expiration of any grace or
         cure period, would constitute a default, breach or event of
         acceleration; and neither the Mortgage Loan Seller, any of its
         affiliates nor any servicer of any related Mortgage Loan has taken any
         action to waive any default, breach or event of acceleration; no
         foreclosure action is threatened or has been commenced with respect to
         the Mortgage Loan;

                  (v) the terms of the Mortgage Note and the Mortgage have not
         been impaired, waived, altered or modified in any respect, except by
         written instruments, (i) if required by law in the jurisdiction where
         the Mortgaged Property is located, or (ii) to protect the interests of
         the Trustee on behalf of the Certificateholders;

                  (vi) no selection procedure reasonably believed by the
         Mortgage Loan Seller to be adverse to the interests of the
         Certificateholders was utilized in selecting the Mortgage Loans;

                  (vii) each Mortgage is a valid and enforceable first lien on
         the property securing the related Mortgage Note and each Mortgaged
         Property is owned by the Mortgagor in fee simple (except with respect
         to common areas in the case of condominiums, PUDs and de minimis PUDs)
         or by leasehold for a term longer than the term of the related
         Mortgage, subject only to (i) the lien of current real property taxes
         and assessments, (ii) covenants, conditions and restrictions, rights of
         way, easements and other matters of public record as of the date of
         recording of such Mortgage, such exceptions being acceptable to
         mortgage lending institutions generally or specifically reflected in
         the appraisal obtained in connection with the origination of the
         related Mortgage Loan or referred to in the lender's title insurance
         policy delivered to the originator of the related Mortgage Loan and
         (iii) other matters to which like properties are commonly subject which
         do not materially interfere with the benefits of the security intended
         to be provided by such Mortgage;

                  (viii) there is no mechanics' lien or claim for work, labor or
         material affecting the premises subject to any Mortgage which is or may
         be a lien prior to, or equal with, the lien of such Mortgage except
         those which are insured against by the title insurance policy referred
         to in (xiiii) below;

                  (ix) as of the Cut-off Date, to the best of the Mortgage Loan
         Seller's knowledge, there was no delinquent tax or assessment lien
         against the property subject to any Mortgage,

                                      J-10

<PAGE>

         except where such lien was being contested in good faith and a stay had
         been granted against levying on the property;

                  (x) there is no valid offset, defense or counterclaim to any
         Mortgage Note or Mortgage, including the obligation of the Mortgagor to
         pay the unpaid principal and interest on such Mortgage Note;

                  (xi) to the best of the Mortgage Loan Seller's knowledge,
         except to the extent insurance is in place which will cover such
         damage, the physical property subject to any Mortgage is free of
         material damage and is in good repair and there is no proceeding
         pending or threatened for the total or partial condemnation of any
         Mortgaged Property;

                  (xii) to the best of the Mortgage Loan Seller's knowledge, the
         Mortgaged Property and all improvements thereon comply with all
         requirements of any applicable zoning and subdivision laws and
         ordinances;

                  (xiii) a lender's title insurance policy (on an ALTA or CLTA
         form) or binder, or other assurance of title customary in the relevant
         jurisdiction therefor in a form acceptable to Fannie Mae or Freddie
         Mac, was issued on the date that each Mortgage Loan was created by a
         title insurance company which, to the best of the Mortgage Loan
         Seller's knowledge, was qualified to do business in the jurisdiction
         where the related Mortgaged Property is located, insuring the Mortgage
         Loan Seller and its successors and assigns that the Mortgage is a first
         priority lien on the related Mortgaged Property in the original
         principal amount of the Mortgage Loan. The Mortgage Loan Seller is the
         sole insured under such lender's title insurance policy, and such
         policy, binder or assurance is valid and remains in full force and
         effect, and each such policy, binder or assurance shall contain all
         applicable endorsements including a negative amortization endorsement,
         if applicable;

                  (xiv) at the time of origination, each Mortgaged Property was
         the subject of an appraisal which conformed to the underwriting
         requirements of the originator of the Mortgage Loan and, the appraisal
         is in a form acceptable to Fannie Mae or FHLMC;

                  (xv) as of the Closing Date, the improvements on each
         Mortgaged Property securing a Mortgage Loan is insured (by an insurer
         which is acceptable to the Mortgage Loan Seller) against loss by fire
         and such hazards as are covered under a standard extended coverage
         endorsement in the locale in which the Mortgaged Property is located,
         in an amount which is not less than the lesser of the maximum insurable
         value of the improvements securing such Mortgage Loan or the
         outstanding principal balance of the Mortgage Loan, but in no event in
         an amount less than an amount that is required to prevent the Mortgagor
         from being deemed to be a co-insurer thereunder; if the improvement on
         the Mortgaged Property is a condominium unit, it is included under the
         coverage afforded by a blanket policy for the condominium project; if
         upon origination of the related Mortgage Loan, the improvements on the
         Mortgaged Property were in an area identified as a federally designated
         flood area, a flood insurance policy is in effect in an amount
         representing coverage not less than the least of (i) the outstanding
         principal balance of the Mortgage Loan, (ii) the restorable cost of
         improvements located on such Mortgaged Property or (iii) the maximum
         coverage available

                                      J-11

<PAGE>

         under federal law; and each Mortgage obligates the Mortgagor thereunder
         to maintain the insurance referred to above at the Mortgagor's cost and
         expense;

                  (xvi) each Mortgage Loan constitutes a "qualified mortgage"
         under Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
         1.860G-2(a)(1);

                  (xvii) each Mortgage Loan was originated or funded by (a) a
         savings and loan association, savings bank, commercial bank, credit
         union, insurance company or similar institution which is supervised and
         examined by a federal or state authority (or originated by (i) a
         subsidiary of any of the foregoing institutions which subsidiary is
         actually supervised and examined by applicable regulatory authorities
         or (ii) a mortgage loan correspondent of any of the foregoing and that
         was originated pursuant to the criteria established by any of the
         foregoing) or (b) a mortgagee approved by the Secretary of Housing and
         Urban Development pursuant to sections 203 and 211 of the National
         Housing Act, as amended;

                  (xviii) none of the Mortgage Loans are (a) loans subject to 12
         CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation
         Z, the regulation implementing TILA, which implements the Home
         Ownership and Equity Protection Act of 1994, as amended or (b)
         classified and/or defined as a "high cost home loan" under any federal,
         state or local law, including, but not limited to, the States of
         Georgia or North Carolina; and

                  (xxix) the information set forth in Schedule A of the
         Prospectus Supplement with respect to the Mortgage Loans is true and
         correct in all material respects.

                  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

                                      J-12

<PAGE>

obligation of the Mortgage Loan Seller to indemnify the Purchaser for such
breach as set forth in and limited by Section 13 hereof.

                  Any cause of action against the Mortgage Loan Seller or
relating to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller or
notice thereof by the party discovering such breach and (ii) failure by the
Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.

                  SECTION 8. REPRESENTATIONS AND WARRANTIES CONCERNING THE
MORTGAGE LOAN SELLER. As of the date hereof and as of the Closing Date, the
Mortgage Loan Seller represents and warrants to the Purchaser as to itself in
the capacity indicated as follows:

                  (i) 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;

                  (ii) 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;

                  (iii) 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;

                  (iv) 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;

                                      J-13

<PAGE>

                  (v) 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);

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

                  (vii) 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:

                  (i) 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;

                  (ii) 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;

                  (iii) 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

                                      J-14

<PAGE>

         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;

                  (iv) 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;

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

                  (vi) 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

                  (vii) 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.

                  (i) The obligations of the Purchaser under this Agreement will
         be subject to the satisfaction, on or prior to the Closing Date, of the
         following conditions:

                                    (1) Each of the obligations of the Mortgage
                  Loan Seller required to be performed at or prior to the
                  Closing Date pursuant to the terms of this Agreement shall
                  have been duly performed and complied with in all material
                  respects; all of the representations and warranties of the
                  Mortgage Loan Seller under this Agreement shall be true and
                  correct as of the date or dates specified in all material
                  respects; and no event shall have occurred which, with notice
                  or the passage of time, would constitute a default under this
                  Agreement, or the Pooling and Servicing Agreement; and the
                  Purchaser shall have received certificates to that effect
                  signed by authorized officers of the Mortgage Loan Seller.

                                      J-15

<PAGE>

                                    (2) The Purchaser shall have received all of
                  the following closing documents, in such forms as are agreed
                  upon and reasonably acceptable to the Purchaser, duly executed
                  by all signatories (other than the Purchaser) as required
                  pursuant to the respective terms thereof:

                                    (a) If required pursuant to Section 3
         hereof, the Amendment dated as of the Closing Date and any documents
         referred to therein;

                                    (b) 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;

                                    (c) 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;

                                    (d) 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;

                                    (e) 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;

                                    (f) 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

                                    (g) Such other documents, certificates
         (including additional representations and warranties) and opinions as
         may be reasonably necessary to secure the intended ratings from each
         Rating Agency for the Certificates.

                           (3) The Certificates to be sold to Bear Stearns
         pursuant to the Underwriting Agreement and the Purchase Agreement shall
         have been issued and sold to Bear Stearns.

                           (4) The Mortgage Loan Seller shall have furnished to
         the Purchaser such other certificates of its officers or others and
         such other documents and opinions of counsel to evidence fulfillment of
         the conditions set forth in this Agreement and the transactions
         contemplated hereby as the Purchaser and its counsel may reasonably
         request.

                  (ii) The obligations of the Mortgage Loan Seller under this
         Agreement shall be subject to the satisfaction, on or prior to the
         Closing Date, of the following conditions:

                           (1) The obligations of the Purchaser required to be
         performed by it on or prior to the Closing Date pursuant to the terms
         of this Agreement shall have been duly

                                      J-16

<PAGE>

         performed and complied with in all material respects, and all of the
         representations and warranties of the Purchaser under this Agreement
         shall be true and correct in all material respects as of the date
         hereof and as of the Closing Date, and no event shall have occurred
         which would constitute a breach by it of the terms of this Agreement,
         and the Mortgage Loan Seller shall have received a certificate to that
         effect signed by an authorized officer of the Purchaser.

                           (2) The Mortgage Loan Seller shall have received
         copies of all of the following closing documents, in such forms as are
         agreed upon and reasonably acceptable to the Mortgage Loan Seller, duly
         executed by all signatories other than the Mortgage Loan Seller as
         required pursuant to the respective terms thereof:

                                    (a) If required pursuant to Section 3
         hereof, the Amendment dated as of the Closing Date and any documents
         referred to therein;

                                    (b) 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;

                                    (c) 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;

                                    (d) One or more opinions of counsel from the
         Purchaser's counsel in form and substance reasonably satisfactory to
         the Mortgage Loan Seller;

                                    (e) 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,

                                      J-17

<PAGE>

(vii) the fees and expenses of each Rating Agency (both initial and ongoing),
(viii) the fees and expenses relating to the preparation and recordation of
mortgage assignments (including intervening assignments, if any and if
available, to evidence a complete chain of title from the originator to the
Trustee) from the Mortgage Loan Seller to the Trustee or the expenses relating
to the Opinion of Counsel referred to in Section 6(a) hereof, as the case may
be, and (ix) Mortgage File due diligence expenses and other out-of-pocket
expenses incurred by the Purchaser in connection with the purchase of the
Mortgage Loans and by Bear Stearns in connection with the sale of the
Certificates. The Mortgage Loan Seller additionally agrees to pay directly to
any third party on a timely basis the fees provided for above which are charged
by such third party and which are billed periodically.

                  SECTION  12.  ACCOUNTANTS' LETTERS.

                  (i) 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" and
         "The Mortgage Pool" and 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.

                  (ii) To the extent statistical information with respect to the
         Master Servicer's or a Servicer's servicing portfolio is included in
         the Prospectus Supplement under the caption "The Master Servicer and
         the Servicers," a letter from the certified public accountant for the
         Master Servicer and such Servicer or Servicers will be delivered to the
         Purchaser dated the date of the Prospectus Supplement, in the form
         previously agreed to by the Mortgage Loan Seller and the Purchaser,
         with respect to such statistical information.

                  SECTION  13.  INDEMNIFICATION.

                  (i) 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

                                      J-18

<PAGE>

         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.

                  (ii) 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,

                  (iii) 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

                                      J-19

<PAGE>

         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 liable
         for any settlement or any claim or action effected without its written
         consent; PROVIDED, HOWEVER, that such consent was not unreasonably
         withheld.

                  (iv) If the indemnification provided for in paragraphs (a) and
         (b) of this Section 13 shall for any reason be unavailable to an
         indemnified party in respect of any loss, claim, damage or liability,
         or any action in respect thereof, referred to in Section 13, then the
         indemnifying party shall in lieu of indemnifying the indemnified party
         contribute to the amount paid or payable by such indemnified party as a
         result of such loss, claim, damage or liability, or action in respect
         thereof, in such proportion as shall be appropriate to reflect the
         relative benefits received by the Mortgage Loan Seller on the one hand
         and the Purchaser on the other from the purchase and sale of the
         Mortgage Loans, the offering of the Certificates and the other
         transactions contemplated hereunder. No person found liable for a
         fraudulent misrepresentation (within the meaning of Section 11(f) of
         the Securities Act) shall be entitled to contribution from any person
         who is not also found liable for such fraudulent misrepresentation.

                  (v) 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.

                                      J-20

<PAGE>

                  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 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.

                                      J-21

<PAGE>

                  SECTION 21. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED
IN ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.

                  SECTION 22. FURTHER ASSURANCES. Each of the parties agrees to
execute and deliver such instruments and take such actions as another party may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which may
be required by either Rating Agency.

                  SECTION  23.  SUCCESSORS AND ASSIGNS.

         This Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller and the Purchaser and their permitted
successors and assigns and, to the extent specified in Section 13 hereof, Bear
Stearns, and their directors, officers and controlling persons (within the
meaning of federal securities laws). The Mortgage Loan Seller acknowledges and
agrees that the Purchaser may assign its rights under this Agreement (including,
without limitation, with respect to the Mortgage Loan Seller's representations
and warranties respecting the Mortgage Loans) to the Trustee. Any person into
which the Mortgage Loan Seller may be merged or consolidated (or any person
resulting from any merger or consolidation involving the Mortgage Loan Seller),
any person resulting from a change in form of the Mortgage Loan Seller or any
person succeeding to the business of the Mortgage Loan Seller, shall be
considered the "successor" of the Mortgage Loan Seller hereunder and shall be
considered a party hereto without the execution or filing of any paper or any
further act or consent on the part of any party hereto. Except as provided in
the two preceding sentences, this Agreement cannot be assigned, pledged or
hypothecated by either party hereto without the written consent of the other
parties to this Agreement and any such assignment or purported assignment shall
be deemed null and void.

                  SECTION 24. THE MORTGAGE LOAN SELLER. The Mortgage Loan Seller
will keep in full effect all rights as are necessary to perform their respective
obligations under this Agreement.

                  SECTION 25. ENTIRE AGREEMENT. This Agreement contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof.

                  SECTION 26. NO PARTNERSHIP. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between the parties
hereto.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      J-22

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.

                                 EMC MORTGAGE CORPORATION

                                 By:
                                    ------------------------------------------
                                 Name:   Sue Stepanek
                                 Title:  Executive 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.

         (a) with respect to each Mortgage Loan:

                  (i) The original Mortgage Note, endorsed without recourse to
         the order of the Trustee and showing an unbroken chain of endorsements
         from the 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 "U.S. Bank National Association, as Trustee", with evidence
         of recording with respect to each Mortgage Loan in the name of the
         Trustee thereon (or if (A) the original Security Instrument,
         assignments to the Trustee or intervening assignments thereof which
         have been delivered, are being delivered or will, upon receipt of
         recording information relating to the Security Instrument required to
         be included thereon, be delivered to recording offices for recording
         and have not been returned to the Seller in time to permit their
         delivery as specified in Section 2.01(b) of the Pooling and Servicing
         Agreement, the Seller may deliver a true copy thereof with a
         certification by the Seller, on the face of such copy, substantially as
         follows: "Certified to be a true and correct copy of the original,
         which has been transmitted for recording" or (B) the related Mortgaged
         Property is located in a state other than Maryland and an Opinion of
         Counsel has been provided as set forth in Section 2.01(b) of the
         Pooling and Servicing Agreement, shall be in recordable form);

                  (iv) all intervening assignments of the Security Instrument,
         if applicable and only to the extent available to the Mortgage Loan
         Seller with evidence of recording thereon;

                  (v) the original or a copy of the policy or certificate of
         primary mortgage guaranty insurance, to the extent available, if any;

                                       E-1

<PAGE>

                  (vi) the original policy of title insurance or mortgagee's
         certificate of title insurance or commitment or binder for title
         insurance; and

                  (vii) originals of all modification agreements, if applicable
         and available.

                                       E-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;

(1)      the first payment date;

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

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

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

(p)      paid-through date;

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

(r)      the Gross Margin, if applicable;

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

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

                                      E-2-1

<PAGE>

(u)      the Periodic Rate Cap, if applicable;

(v)      the number of days delinquent, if any;

(w)      which Mortgage Loans adjust after an initial fixed-rate period of
         three, five, seven or ten years;

(x)      the Loan Group;

(y)      the Prepayment Charge Loans; and

(z)      the Servicer.

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

                                      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."

                                       E-3

<PAGE>

                                    EXHIBIT 4
                                    ---------

                             PURCHASER'S INFORMATION
                             -----------------------

         All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.

                                       E-4

<PAGE>

                                    EXHIBIT 5
                                    ---------

                             SCHEDULE OF LOST NOTES
                             ----------------------

                             Available Upon Request

                                       E-5

<PAGE>

                                   SCHEDULE A
                                   ----------

                 REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES
                 -----------------------------------------------

                               Public Certificates
                               -------------------

                 Class                            S&P                  Moody's
                 -----                            ---                  -------
Class I-A-1............................           AAA                    Aaa
Class I-A-2............................           AAA                    Aaa
Class I-A-3............................           AAA                    Aaa
Class II-A.............................           AAA                    Aa1
Class III-A............................           AAA                    Aaa
Class R-I..............................           AAA                    NR
Class R-II.............................           AAA                    NR
Class B-1..............................            AA                    Aa2
Class B-2..............................            A                     A2
Class B-3..............................           BBB                   Baa2

None of the above ratings has been lowered since the respective dates of such
letters.

                                       A-1

<PAGE>

                              Private Certificates
                              --------------------

                 Class                            S&P                  Moody's
                 -----                            ---                  -------
Class B-4..............................           BB                    NR
Class B-5..............................            B                    NR
Class B-6..............................           NR                    NR

None of the above ratings has been lowered since the respective dates of such
letters.

                                       A-2

<PAGE>

                                   SCHEDULE B
                                   ----------

                             MORTGAGE LOAN SCHEDULE
                             ----------------------

                             [Provided upon request]

                                       A-3================================================================================

                          CENDANT MORTGAGE CAPITAL LLC,
                                    Depositor

                          CENDANT MORTGAGE CORPORATION,
                                 Master Servicer

                                 CITIBANK, N.A.,
                                     Trustee

                         POOLING AND SERVICING AGREEMENT

                             Dated as of May 1, 2004

             CDMC Mortgage Pass-Through Certificates, Series 2004-3

================================================================================

<PAGE>

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

ARTICLE I

         DEFINITIONS..............................................................................................3
                  Section 1.01      DEFINED TERMS.................................................................3
                  Section 1.02      ACCOUNTING...................................................................40

ARTICLE II

         CONVEYANCE OF MORTGAGE LOANS;
         ORIGINAL ISSUANCE OF CERTIFICATES.......................................................................41
                  Section 2.01      CONVEYANCE OF MORTGAGE LOANS.................................................41
                  Section 2.02      ACCEPTANCE OF TRUST FUND BY THE TRUSTEE......................................45
                  Section 2.03      REPURCHASE OR SUBSTITUTION OF MORTGAGE LOANS BY THE SELLERS-
                                    ASSIGNMENT OF INTEREST IN ADDITIONAL COLLATERAL..............................46
                  Section 2.04      REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER SERVICER
                                     ............................................................................49
                  Section 2.05      REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR..............................51
                  Section 2.06      PURPOSE AND POWERS OF THE TRUST..............................................53

ARTICLE III

         ADMINISTRATION AND SERVICING OF THE TRUST FUND..........................................................54
                  Section 3.01      MASTER SERVICER TO ACT AS MASTER SERVICER....................................54
                  Section 3.02      SUB-SERVICING AGREEMENTS BETWEEN THE MASTER SERVICER AND SUB-
                                    SERVICERS....................................................................56
                  Section 3.03      SUCCESSOR SUB-SERVICERS......................................................57
                  Section 3.04      LIABILITY OF THE MASTER SERVICER.............................................58
                  Section 3.05      NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICERS AND TRUSTEE OR
                                    CERTIFICATEHOLDERS...........................................................58
                  Section 3.06      ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENTS BY TRUSTEE
                                     ............................................................................58
                  Section 3.07      COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS.................................59
                  Section 3.08      SUB-SERVICING ACCOUNTS.......................................................59
                  Section 3.09      COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS; SERVICING
                                    ACCOUNTS.....................................................................60
                  Section 3.10      COLLECTION ACCOUNT AND DISTRIBUTION ACCOUNT..................................60
                  Section 3.11      WITHDRAWALS FROM THE COLLECTION ACCOUNT AND DISTRIBUTION ACCOUNT
                                     ............................................................................63
                  Section 3.12      INVESTMENT OF FUNDS IN THE COLLECTION ACCOUNT, SERVICING ACCOUNTS
                                    AND THE DISTRIBUTION ACCOUNT.................................................64
                  Section 3.13      MAINTENANCE OF THE PRIMARY INSURANCE POLICIES; COLLECTIONS
                                    THEREUNDER...................................................................65

                                                         i

<PAGE>

                  Section 3.14      MAINTENANCE OF HAZARD INSURANCE AND ERRORS AND OMISSIONS AND
                                    FIDELITY COVERAGE............................................................66
                  Section 3.15      ENFORCEMENT OF DUE-ON-SALE CLAUSES. ASSUMPTION AGREEMENTS
                                     ............................................................................68
                  Section 3.16      REALIZATION UPON DEFAULTED MORTGAGE LOANS....................................69
                  Section 3.17      TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES..............................71
                  Section 3.18      SERVICING COMPENSATION.......................................................72
                  Section 3.19      REPORTS TO THE TRUSTEE; COLLECTION ACCOUNT STATEMENTS........................73
                  Section 3.20      STATEMENT AS TO COMPLIANCE...................................................73
                  Section 3.21      INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.............................74
                  Section 3.22      ACCESS TO CERTAIN DOCUMENTATION..............................................74
                  Section 3.23      TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY............................74
                  Section 3.24      OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF PREPAYMENT INTEREST
                                    SHORTFALLS...................................................................77
                  Section 3.25      ADMINISTRATION OF BUYDOWN FUNDS..............................................78
                  Section 3.26      OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF LOAN RATES AND
                                    MONTHLY PAYMENTS.............................................................78

ARTICLE IV

         PAYMENTS TO CERTIFICATEHOLDERS..........................................................................79
                  Section 4.01      DISTRIBUTION ACCOUNT; DISTRIBUTIONS..........................................79
                  Section 4.02      STATEMENTS TO CERTIFICATEHOLDERS.............................................86
                  Section 4.03      REMITTANCE REPORTS; ADVANCES BY THE MASTER SERVICER..........................88
                  Section 4.04      ALLOCATION OF REALIZED LOSSES................................................90
                  Section 4.05      INFORMATION REPORTS TO BE FILED BY THE MASTER SERVICER.......................91
                  Section 4.06      COMPLIANCE WITH WITHHOLDING REQUIREMENTS.....................................91
                  Section 4.07      [RESERVED]...................................................................91
                  Section 4.08      LIMITED PURPOSE SURETY BOND..................................................91

ARTICLE V

         THE CERTIFICATES........................................................................................92
                  Section 5.01      THE CERTIFICATES.............................................................92
                  Section 5.02      REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES........................92
                  Section 5.03      MUTILATED. DESTROYED. LOST OR STOLEN CERTIFICATES............................98
                  Section 5.04      PERSONS DEEMED OWNERS........................................................98
                  Section 5.05      APPOINTMENT OF PAYING AGENT..................................................98

ARTICLE VI

         THE MASTER SERVICER AND THE DEPOSITOR..................................................................100
                  Section 6.01      LIABILITY OF THE MASTER SERVICER AND THE DEPOSITOR..........................100
                  Section 6.02      MERGER OR CONSOLIDATION OF OR ASSUMPTION OF THE OBLIGATIONS OF THE
                                    MASTER SERVICER OR THE DEPOSITOR............................................100
                  Section 6.03      LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS...................100

                                                        ii

<PAGE>

                  Section 6.04      MASTER SERVICER NOT TO RESIGN...............................................101
                  Section 6.05      DELEGATION OF DUTIES........................................................101

ARTICLE VII

         DEFAULT................................................................................................102
                  Section 7.01      MASTER SERVICER EVENTS OF TERMINATION.......................................102
                  Section 7.02      TRUSTEE TO ACT: APPOINTMENT OF SUCCESSOR....................................104
                  Section 7.03      WAIVER OF MASTER SERVICER EVENTS OF TERMINATION.............................105
                  Section 7.04      NOTIFICATION TO CERTIFICATEHOLDERS..........................................105
                  Section 7.05      SURVIVABILITY OF MASTER SERVICER LIABILITIES................................106

ARTICLE VIII

         THE TRUSTEE............................................................................................107
                  Section 8.01      DUTIES OF TRUSTEE...........................................................107
                  Section 8.02      CERTAIN MATTERS AFFECTING THE TRUSTEE.......................................109
                  Section 8.03      TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.......................110
                  Section 8.04      TRUSTEE MAY OWN CERTIFICATES................................................111
                  Section 8.05      MASTER SERVICER TO PAY TRUSTEE EXPENSES; TRUSTEE FEES.......................111
                  Section 8.06      ELIGIBILITY REQUIREMENTS FOR TRUSTEE........................................112
                  Section 8.07      RESIGNATION OR REMOVAL OF TRUSTEE...........................................112
                  Section 8.08      SUCCESSOR TRUSTEE...........................................................113
                  Section 8.09      MERGER OR CONSOLIDATION OF TRUSTEE..........................................113
                  Section 8.10      APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE...............................113
                  Section 8.11      LIMITATION OF LIABILITY.....................................................115
                  Section 8.12      TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF CERTIFICATES
                                     ...........................................................................115
                  Section 8.13      SUITS FOR ENFORCEMENT.......................................................115
                  Section 8.14      WAIVER OF BOND REQUIREMENT..................................................115
                  Section 8.15      WAIVER OF INVENTORY. ACCOUNTING AND APPRAISAL REQUIREMENT
                                     ...........................................................................116
                  Section 8.16      RIGHT OF TRUSTEE IN CAPACITY OF CERTIFICATE REGISTRAR OR PAYING AGENT
                                     ...........................................................................116
                  Section 8.17      PERIODIC FILINGS............................................................116

ARTICLE IX

         REMIC ADMINISTRATION...................................................................................117
                  Section 9.01      REMIC ADMINISTRATION........................................................117
                  Section 9.02      PROHIBITED TRANSACTIONS AND ACTIVITIES......................................119
                  Section 9.03      MASTER SERVICER AND TRUSTEE INDEMNIFICATION.................................120

ARTICLE X

         TERMINATION............................................................................................121

                                                        iii

<PAGE>

                  Section 10.01     TERMINATION.................................................................121
                  Section 10.02     ADDITIONAL TERMINATION REQUIREMENTS.........................................122

ARTICLE XI

         [RESERVED].............................................................................................124

ARTICLE XII

         MISCELLANEOUS PROVISIONS...............................................................................125
                  Section 12.01     AMENDMENT...................................................................125
                  Section 12.02     RECORDATION OF AGREEMENT: COUNTERPARTS......................................126
                  Section 12.03     LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS..................................126
                  Section 12.04     GOVERNING LAW: JURISDICTION.................................................127
                  Section 12.05     NOTICES.....................................................................127
                  Section 12.06     SEVERABILITY OF PROVISIONS..................................................128
                  Section 12.07     ARTICLE AND SECTION REFERENCES..............................................128
                  Section 12.08     NOTICE TO THE RATING AGENCY.................................................128
                  Section 12.09     FURTHER ASSURANCES..........................................................129
                  Section 12.10     BENEFITS OF AGREEMENT.......................................................129
                  Section 12.11     ACTS OF CERTIFICATEHOLDERS..................................................129
</TABLE>

                                                        iv

<PAGE>

<TABLE>
<CAPTION>
EXHIBITS:
--------
<S>               <C>
Exhibit A         Form of Class A Certificates
Exhibit B         [reserved]
Exhibit C-1       Form of Class R Certificates
Exhibit C-2       Form of Class B-1 Certificates
Exhibit C-3       Form of Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates
Exhibit D         Mortgage Loan Schedule
Exhibit E         Form of Request for Release
Exhibit F-1       Form of Rule 144A Representation Letter
Exhibit F-2       Form of Transferor Certificate
Exhibit F-3       Form of Transferee Representation Letter
Exhibit F-4       Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit
Exhibit G-1       Form of ERISA Representation Letter (Class B-4, Class B-5 and Class B-6)
Exhibit G-2       Form of ERISA Representation Letter (Class B-2 and Class B-3)
Exhibit H         Form of Lost Note Affidavit
Exhibit I-1       Form of Trustee's Initial Certification
Exhibit I-2       Form of Trustee's Final Certification
Exhibit J         Mortgage Loan Purchase Agreement
Exhibit K         Assignment, Assumption and Recognition Agreement (Additional Collateral
                  Servicing Agreement)
Exhibit L         [Reserved]
Exhibit M         Form of Form 10-K Certificate
Exhibit N         Form of Back-up Certification to Form 10-K Certificate
</TABLE>

                                        v

<PAGE>

         This Pooling and Servicing Agreement is dated as of May 1, 2004 (the
"Agreement"), among CENDANT MORTGAGE CAPITAL LLC, as depositor (the
"Depositor"), CENDANT MORTGAGE CORPORATION, as master servicer (the "Master
Servicer") and CITIBANK, N.A., as trustee (the "Trustee").

                             PRELIMINARY STATEMENT:

         The Depositor intends to sell mortgage pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Mortgage Loans (as defined herein). As provided herein, the Trustee will
make, in accordance with Section 9.01, an election to treat the entire
segregated pool of assets described in the definition of Trust Fund (as defined
herein), and subject to this Agreement (including the Mortgage Loans), as two
real estate mortgage investment conduits (each a "REMIC") for federal income tax
purposes.

                                     REMIC I

The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Uncertificated Principal Balance, for each Class of REMIC
I Regular Interest comprising the interests in REMIC I created hereunder:

<TABLE>
<CAPTION>
       REMIC I Regular            Uncertificated               Uncertificated               Assumed Final
          Interest               Principal Balance          Pass-Through Rate(2)          Maturity Date(1)
          --------               -----------------          --------------------          ----------------
<S>                              <C>                           <C>                         <C>
             A-1                 $ 13,540,853.00               Variable Rate               June 25, 2034
             A-2                 $ 23,646,732.00               Variable Rate               June 25, 2034
             A-3                 $ 25,029,303.00               Variable Rate               June 25, 2034
             A-4                 $ 40,046,886.00               Variable Rate               June 25, 2034
             A-5                 $  8,986,712.00               Variable Rate               June 25, 2034
             A-6                 $  4,885,482.00               Variable Rate               June 25, 2034
             A-7                 $  5,806,598.00               Variable Rate               June 25, 2034
             A-8                 $ 14,516,996.00               Variable Rate               June 25, 2034
        R-II Interest            $        100.00               Variable Rate               June 25, 2034
             B-1                 $  6,750,403.00               Variable Rate               June 25, 2034
             B-2                 $    798,435.00               Variable Rate               June 25, 2034
             B-3                 $    435,510.00               Variable Rate               June 25, 2034
             B-4                 $    290,340.00               Variable Rate               June 25, 2034
             B-5                 $    217,755.00               Variable Rate               June 25, 2034
             B-6                 $    217,754.97               Variable Rate               June 25, 2034
</TABLE>

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

(2) Calculated in accordance with the definition of "Uncertificated Pass-Through
Rate" herein.

<PAGE>

                                    REMIC II

The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Certificate Principal Balance for each Class of
Certificates comprising the interests in the Trust Fund created hereunder:

<TABLE>
<CAPTION>
                               Original Certificate             Initial Pass Through       Assumed Final
            Class                Principal Balance                      Rate               Maturity Dates
            -----                -----------------                      ----               --------------
<S>                              <C>                              <C>                     <C>
   A-1                           $13,540,853.00                   Variable Rate(1)        June 25, 2034
   A-2                           $23,646,732.00                   Variable Rate(2)        June 25, 2034
   A-3                           $25,029,303.00                   Variable Rate(2)        June 25, 2034
   A-4                           $40,046,886.00                   Variable Rate(2)        June 25, 2034
   A-5                           $ 8,986,712.00                   Variable Rate(2)        June 25, 2034
   A-6                           $ 4,885,482.00                   Variable Rate(2)        June 25, 2034

   A-7(3)                        $ 5,806,598.00                   Variable Rate(4)        June 25, 2034

   A-8                           $14,516,996.00                   Variable Rate(2)        June 25, 2034

   R-I                           $       100.00                   Variable Rate(2)        June 25, 2034
   R-II                          $       100.00                   Variable Rate(2)        June 25, 2034
   B-1                           $ 6,750,403.00                   Variable Rate(2)        June 25, 2034
   B-2                           $   798,435.00                   Variable Rate(2)        June 25, 2034
   B-3                           $   435,510.00                   Variable Rate(2)        June 25, 2034
   B-4                           $   290,340.00                   Variable Rate(2)        June 25, 2034
   B-5                           $   217,755.00                   Variable Rate(2)        June 25, 2034
   B-6                           $   217,754.97                   Variable Rate(2)        June 25, 2034
</TABLE>

(1)      Varies according to (i) the weighted average of the Net Mortgage Rate
         on each Mortgage Loan minus (ii) 0.50% per annum.
(2)      Varies according to the weighted average of the Net Mortgage Rate on
         each Mortgage Loan.
(3)      For federal income tax purposes, the Class A-7 Certificates represent
         ownership of two components which are regular interests in REMIC II:
         the Class A-7A Component and the Class A-7B Component. The Class A-7A
         Component has a principal balance equal to the Certificate Principal
         Balance of the Class A-7 Certificates and a Pass-Through Rate as set
         forth herein. The Class A-7B Component is an interest only component
         which has a Pass-Through Rate as set forth herein and a notional amount
         equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest A-1.
(4)      Varies according to the sum of (i) the weighted average of the Net
         Mortgage Rate on each Mortgage Loan and (ii) 0.50% per annum multiplied
         by a fraction, the numerator of which is the Certificate Principal
         Balance of the Class A-1 Certificates and the denominator of which is
         the Certificate Principal Balance of the Class A-7 Certificates.

                                        2

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.01 DEFINED TERMS.

         Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, interest
will be calculated for all Certificates on the basis of a 360-day year
consisting of twelve 30-day months.

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

         "Account": Any of the Collection Account and Distribution Account.

         "Accretion Termination Date": With respect to the Class A-5
Certificates, the Class A-5 Accretion Termination Date, with respect to the
Class A-6 Certificates, the Class A-6 Accretion Termination Date, with respect
to the Class A-7 Certificates, the Class A-7 Accretion Termination Date and with
respect to the Class A-8 Certificates, the Class A-8 Accretion Termination Date.

         "Accrual Distribution Amount": With respect to the Class A-5
Certificates, the Class A-5 Accrual Distribution Amount, with respect to the
Class A-6 Certificates, the Class A-6 Accrual Distribution Amount, with respect
to the Class A-7 Certificates, the Class A-7 Accrual Distribution Amount and
with respect to the Class A-8 Certificates, the Class A-8 Accrual Distribution
Amount.

         "Additional Collateral": (i) With respect to any Mortgage 100(sm) Loan,
the Securities Account and the financial assets held therein subject to a
security interest pursuant to the related Mortgage 100(sm) Pledge Agreement, or
(ii) with respect to any Parent Power(R) Mortgage Loan, the related Parent
Power(R) Agreement and collateral pledged pursuant thereto.

         "Additional Collateral Agreements": Each Mortgage 100(sm) Pledge
Agreement, Parent Power(R) Guaranty and Security Agreement for Securities
Account and Control Agreement, as applicable, for each Additional Collateral
Mortgage Loan.

         "Additional Collateral Mortgage Loan": A Mortgage Loan that is
supported by Additional Collateral.

         "Additional Collateral Servicer": MLCC.

         "Additional Collateral Servicing Agreement": The Additional Collateral
Transfer and Servicing Agreement, dated as of November 1, 2001, between MLCC and
the Master Servicer.

         "Advance": As to any Mortgage Loan or REO Property, any advance made by
the Master Servicer in respect of any Distribution Date pursuant to Section
4.03.

         "Adverse REMIC Event": As defined in Section 9.01(f) hereof.

                                        3

<PAGE>

         "Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "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 and "controlling" and "controlled" shall have meanings
correlative to the foregoing.

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

         "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.

         "Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.

         "Available Distribution Amount": With respect to any Distribution Date
and the Mortgage Loans, an amount equal to the excess of (i) the sum of (a) the
aggregate of the related Monthly Payments received on or prior to the related
Determination Date, (b) Liquidation Proceeds, Insurance Proceeds, Principal
Prepayments and other unscheduled recoveries of principal and interest in
respect of the Mortgage Loans during the related Prepayment Period, (c) the
aggregate of any amounts received in respect of a related REO Property withdrawn
from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) the aggregate of any amounts deposited in the Collection
Account by the Master Servicer in respect of related Prepayment Interest
Shortfalls for such Distribution Date and (e) the aggregate of any related
Advances made by the Master Servicer for such Distribution Date, over (ii) the
sum of (a) related amounts reimbursable or payable to the Master Servicer
pursuant to Section 3.10, (b) related Stayed Funds, (c) related amounts
deposited in the Collection Account or the Distribution Account, as the case may
be, in error, (d) any Extraordinary Trust Fund Expenses and (e) the Trustee Fee.
The Available Distribution Amount shall also be increased by any Required Surety
Payment.

           "Bankruptcy Amount": As of any date of determination prior to the
first anniversary of the Cut-off Date, an amount equal to the excess, if any, of
(A) $50,000 over (B) the aggregate amount of Bankruptcy Losses allocated solely
to one or more specific Classes of Certificates in accordance with Section 4.02.
As of any date of determination on or after the first anniversary of the Cut-off
Date, an amount equal to the excess, if any, of (1) the lesser of (a) the
Bankruptcy Amount calculated as of the close of business on the Business Day
immediately preceding the most recent anniversary of the Cut-off Date coinciding
with or preceding such date of determination (or, if such date of determination
is an anniversary of the Cut-off Date, the Business Day immediately preceding
such date of determination) (for purposes of this definition, the "Relevant
Anniversary") and (b) the greater of
                      (A) the greater of (i) 0.0006 times the aggregate
           principal balance of all the Mortgage Loans in the Mortgage Pool as
           of the Relevant Anniversary having a Loan-to- Value Ratio at
           origination which exceeds 75% and (ii) $50,000; and (B) the greater
           of (i) the product of (x) an amount equal to the largest difference
           in the related Monthly Payment for any Non-Primary Residence Loan
           remaining in the Mortgage Pool which had an original Loan-to-Value
           Ratio greater than 80% that would result if the Net Mortgage Rate

                                        4

<PAGE>

           thereof was equal to the greater of (I) 5% or (II) the weighted
           average (based on the principal balance of the Mortgage Loans as of
           the Relevant Anniversary) of the Net Mortgage Rates of all Mortgage
           Loans as of the Relevant Anniversary less 1.25% per annum, (y) a
           number equal to the weighted average remaining term to maturity, in
           months, of all Mortgage Loans with a Loan-to-Value Ratio of greater
           than 80% remaining in the Mortgage Pool as of the Relevant
           Anniversary, and (z) one plus the quotient of the number of all
           Non-Primary Residence Loans with a Loan-to-Value Ratio of greater
           than 80% remaining in the Mortgage Pool divided by the total number
           of outstanding Mortgage Loans in the Mortgage Pool as of the Relevant
           Anniversary, and (ii) $50,000,

over (2) the aggregate amount of Bankruptcy Losses allocated solely to one or
more specific Classes of Certificates in accordance with Section 4.02 since the
Relevant Anniversary.

           The Bankruptcy Amount may be further reduced by the Master Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from the Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by the Rating Agency below the
lower of the then current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.

         "Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.

         "Bankruptcy Losses": Losses that are incurred as a result of Debt
Service Reductions and Deficient Valuations.

           "Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Certificates (other than the Class R, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6 Certificates) shall be Book-Entry Certificates.

           "Business Day": Any day other than (a) a Saturday or Sunday, (b) a
legal holiday in the State of New Jersey or the State of New York, or (c) a day
on which banking or savings and loan institutions in the State of New Jersey or
the State of New York are authorized or obligated by law or executive order to
be closed.

           "Buydown Account": The custodial account or accounts created and
maintained pursuant to Section 3.25.

           "Buydown Agreement": An agreement between the applicable originator
and a Mortgagor, or an agreement among such originator, a Mortgagor and an
employer of a relocated Mortgagor which, in each case, provides for the
application of Buydown Funds.

                                        5

<PAGE>

           "Buydown Funds": In respect of any Buydown Mortgage Loan, any amount
contributed by the related originator or the employer of a relocated borrower in
order to enable the Mortgagor to reduce the payments required to be made from
the Mortgagor's funds during the Buydown Period. The Buydown Funds are not part
of the Trust Fund prior to deposit into the Collection Account or the
Distribution Account.

           "Buydown Mortgage Loan": Any Mortgage Loan in respect of which,
pursuant to a Buydown Agreement, (i) the Mortgagor pays less than the full
monthly payment specified in the Mortgage Note during the Buydown Period and
(ii) the difference between the payments required under such Buydown Agreement
and the Mortgage Note is paid from the related Buydown Funds.

           "Buydown Period": The period during which Buydown Funds are required
to be applied to the related Buydown Mortgage Loans as provided in Section 3.25.

           "Cash-Out Refinancing": A Refinanced Mortgage Loan the proceeds of
which were more than 2% or $2,000 in excess of the principal balance of any
existing first mortgage or seasoned subordinate mortgage on the related
Mortgaged Property and related closing costs.

           "Cash Liquidation": As to any defaulted Mortgage Loan other than REO
Property which has been acquired by the Master Servicer on behalf of the Trustee
for the benefit of the Certificateholders, a determination by the Master
Servicer that it has received all Insurance Proceeds, Liquidation Proceeds and
other payments or cash recoveries which the Master Servicer reasonably or in
good faith expects to be finally recoverable with respect to such Mortgage Loan,
plus, with respect to a defaulted Mortgage Loan that is an Additional Collateral
Mortgage Loan, the amount realized on the related Additional Collateral with
respect to such Mortgage Loan in accordance with Section 3.16.

           "Certificate": Any Regular Certificate or Class R Certificate.

           "Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of a Class R
Certificate for any purpose hereof.

           "Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.

           "Certificate Principal Balance": With respect to any Certificate as
of any date of determination, (x) the Certificate Principal Balance of such
Certificate on the Distribution Date immediately prior to such date of
determination, plus (y) (i) in the case of the Class A-5 Certificates, an amount
equal to the Monthly Interest Distributable Amount added to the Certificate
Principal Balance of the Class A-5 Certificates on the Distribution Date
immediately prior to such date of determination on or prior to the Class A-5
Accretion Termination Date, (ii) in the case of the Class A-6 Certificates, an
amount equal to the Monthly Interest Distributable Amount added to the
Certificate Principal Balance of the Class A-6 Certificates on the Distribution
Date immediately prior to such date of determination on or prior to the Class
A-6 Accretion Termination Date, (iii) in the case of the Class A-7 Certificates,
an amount equal to the Monthly Interest Distributable Amount added to the
Certificate Principal Balance of the Class A-7 Certificates on the Distribution
Date

                                        6

<PAGE>

immediately prior to such date of determination on or prior to the Class A-7
Accretion Termination Date and (iv) in the case of the Class A-8 Certificates,
an amount equal to the Monthly Interest Distributable Amount added to the
Certificate Principal Balance of the Class A-8 Certificates on the Distribution
Date immediately prior to such date of determination on or prior to the Class
A-8 Accretion Termination Date, reduced by the aggregate of (a) all
distributions of principal made thereon on such immediately prior Distribution
Date and (b) without duplication of amounts described in clause (a) above,
reductions in the Certificate Principal Balance thereof in connection with
allocations thereto of Realized Losses on the Mortgage Loans and Extraordinary
Trust Fund Expenses on such immediately prior Distribution Date (or, in the case
of any date of determination up to and including the initial Distribution Date,
the initial Certificate Principal Balance of such Certificate, as stated on the
face thereon); provided, however, that the Certificate Principal Balance of each
Subordinate Certificate of the Class of Subordinate Certificates outstanding
with the highest numerical designation at any given time shall be calculated to
equal the Percentage Interest evidenced by such Certificate multiplied by the
excess, if any, of (A) the then aggregate Stated Principal Balance of the
Mortgage Loans over (B) the then aggregate Certificate Principal Balances of all
other Classes of Certificates then outstanding.

           "Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.

           "Class": Collectively, Certificates which have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.

           "Class A Certificate": Any of the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7 or Class A-8 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and
therein.

           "Class A Certificateholder": Any Holder of a Class A Certificate.

           "Class A-5 Accretion Termination Date": The earlier to occur of (i)
the Distribution Date on which the aggregate Certificate Principal Balance of
the Class A-3 Certificates and A-4 Certificates has been reduced to zero and
(ii) the Credit Support Depletion Date.

           "Class A-5 Accrual Distribution Amount": With respect to each
Distribution Date prior to the Class A-5 Accretion Termination Date, an amount
equal to the aggregate amount of Monthly Interest Distributable Amount on the
Class A-5 Certificates, for such date, to the extent added to the Certificate
Principal Balance thereof pursuant to Section 4.01(h); provided that, with
respect to each Distribution Date on or after the Class A-5 Accretion
Termination Date, the Monthly Interest Distributable Amount on the Class A-5
Certificates for such date remaining after reduction of the aggregate
Certificate Principal Balance of the Class A-3 Certificates and Class A-4
Certificates to zero on the Class A-5 Accretion Termination Date will be payable
to the Class A-5 Certificateholders pursuant to Section 4.01(c)(i) hereof; and
provided further, that if the Class A-5 Accretion Termination Date is the Credit
Support Depletion Date, the entire amount of Monthly Interest Distributable
Amount on the Class A-5 Certificates for that date will be payable to the Class
A-5 Certificateholders pursuant to Section 4.01(c)(i) hereof.

                                        7

<PAGE>

           "Class A-6 Accretion Termination Date": The earlier to occur of (i)
the Distribution Date on which the aggregate Certificate Principal Balance of
the Class A-2, Class A-3, Class A-4 and Class A-5 Certificates has been reduced
to zero and (ii) the Credit Support Depletion Date.

           "Class A-6 Accrual Distribution Amount": With respect to each
Distribution Date prior to the Class A-6 Accretion Termination Date, an amount
equal to the aggregate amount of Monthly Interest Distributable Amount on the
Class A-6 Certificates, for such date, to the extent added to the Certificate
Principal Balance thereof pursuant to Section 4.01(i); provided that, with
respect to each Distribution Date on or after the Class A-6 Accretion
Termination Date, the Monthly Interest Distributable Amount on the Class A-6
Certificates for such date remaining after reduction of the aggregate
Certificate Principal Balance of the Class A-2, Class A-3, Class A-4 and Class
A-5 Certificates to zero on the Class A-6 Accretion Termination Date will be
payable to the Class A-6 Certificateholders pursuant to Section 4.01(c)(i)
hereof; and provided further, that if the Class A-6 Accretion Termination Date
is the Credit Support Depletion Date, the entire amount of Monthly Interest
Distributable Amount on the Class A-6 Certificates for that date will be payable
to the Class A-6 Certificateholders pursuant to Section 4.01(c)(i) hereof.

           "Class A-7 Accretion Termination Date": The earlier to occur of (i)
the Distribution Date on which the aggregate Certificate Principal Balance of
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-6
Certificates has been reduced to zero and (ii) the Credit Support Depletion
Date.

           "Class A-7 Accrual Distribution Amount": With respect to each
Distribution Date prior to the Class A-7 Accretion Termination Date, an amount
equal to the aggregate amount of Monthly Interest Distributable Amount on the
Class A-7 Certificates, for such date, to the extent added to the Certificate
Principal Balance thereof pursuant to Section 4.01(j); provided that, with
respect to each Distribution Date on or after the Class A-7 Accretion
Termination Date, the Monthly Interest Distributable Amount on the Class A-7
Certificates for such date remaining after reduction of the aggregate
Certificate Principal Balance of the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, and Class A-6 Certificates to zero on the Class A-5 Accretion
Termination Date will be payable to the Class A-7 Certificateholders pursuant to
Section 4.01(c)(i) hereof; and provided further, that if the Class A-7 Accretion
Termination Date is the Credit Support Depletion Date, the entire amount of
Monthly Interest Distributable Amount on the Class A-7 Certificates for that
date will be payable to the Class A-7 Certificateholders pursuant to Section
4.01(c)(i) hereof.

           "Class A-8 Accretion Termination Date": The earliest to occur of (i)
the Distribution Date on which the aggregate Certificate Principal Balance of
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6 and Class
A-7 Certificates has been reduced to zero, (ii) the Credit Support Depletion
Date and (iii) the Distribution Date occurring in June 2009.

           "Class A-8 Accrual Distribution Amount": With respect to each
Distribution Date prior to the Class A-8 Accretion Termination Date, an amount
equal to the aggregate amount of Monthly Interest Distributable Amount on the
Class A-8 Certificates, for such date, to the extent added to the Certificate
Principal Balance thereof pursuant to Section 4.01(k); provided that, with
respect to each Distribution Date on or after the Class A-8 Accretion
Termination Date, the Monthly Interest Distributable Amount on the Class A-8
Certificates for such date remaining after reduction of the aggregate
Certificate Principal Balance of the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5,

                                        8

<PAGE>

Class A-6 and Class A-7 Certificates to zero on the Class A-8 Accretion
Termination Date will be payable to the Class A-8 Certificateholders pursuant to
Section 4.01(c)(i) hereof; and provided further, that if the Class A-8 Accretion
Termination Date is the Credit Support Depletion Date, the entire amount of
Monthly Interest Distributable Amount on the Class A-8 Certificates for that
date will be payable to the Class A-8 Certificateholders pursuant to Section
4.01(c)(i) hereof.

           "Class A-7A Component": A regular interest in REMIC II which has a
principal amount which will at all times be equal to the Certificate Principal
Balance of the Class A-7 Certificates and a per annum Pass-Through Rate as set
forth herein.

           "Class A-7A Component Principal Amount": An amount equal to the
Certificate Principal Balance of the Class A-7 Certificates.

           "Class A-7B Component": A regular interest in REMIC II which has a
notional amount which will at all times be equal to the Uncertificated Principal
Balance of REMIC I Regular Interest A-1, a per annum Pass-Through Rate as set
forth herein, and no principal amount.

           "Class A-7B Component Notional Amount": An amount equal to the
Uncertificated Principal Balance of REMIC I Regular Interest A-1.

           "Class B Certificate": Any one of the Class B-1, Class B-2, Class
B-3, Class B-4, Class B-5 or Class B-6 Certificates as designated on the face
thereof substantially in the form annexed hereto as Exhibit C-2 or Exhibit C-3,
executed by the Trustee and authenticated and delivered by the Trustee,
representing the right to distributions as set forth herein and therein.

           "Class B Certificateholder": Any Holder of a Class B Certificate.

           "Class B Percentage": The Class B-1 Percentage, Class B-2 Percentage,
Class B-3 Percentage, Class B-4 Percentage, Class B-5 Percentage or Class B-6
Percentage.

           "Class B-1 Percentage": With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class B-1 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date. The initial Class B-1
Percentage is approximately 4.65%.

           "Class B-2 Percentage": With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class B-2 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date. The initial Class B-2
Percentage is approximately 0.55%.

           "Class B-3 Percentage": With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class B-3 Certificates
immediately prior to such Distribution Date and the

                                        9

<PAGE>

denominator of which is the aggregate Stated Principal Balance of all of the
Mortgage Loans (or related REO Properties) immediately prior to such
Distribution Date. The initial Class B-3 Percentage is approximately 0.30%.

           "Class B-4 Percentage": With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class B-4 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date. The initial Class B-4
Percentage is approximately 0.20%.

           "Class B-5 Percentage": With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class B-5 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date. The initial Class B-5
Percentage is approximately 0.15%.

           "Class B-6 Percentage": With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class B-6 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date. The initial Class B-6
Percentage is approximately 0.15%.

           "Class R Certificates": The Class R-I and Class R-II Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit C-1 and each
evidencing the ownership of an interest designated as the Residual Interest in
the related REMIC.

           "Class Subordination Percentage": With respect to any Distribution
Date and each Class of Subordinate Certificates, the fraction (expressed as a
percentage) the numerator of which is the Certificate Principal Balance of such
Class of Subordinate Certificates immediately prior to such Distribution Date
and the denominator of which is the aggregate of the Certificate Principal
Balances of all Classes of Certificates immediately prior to such Distribution
Date.

           "Closing Date": May 27, 2004.

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

           "Collection Account": The account or accounts created and maintained
by the Master Servicer pursuant to Section 3.10, which shall be entitled
"Cendant Mortgage Corporation, as Master Servicer for Citibank, N.A., as
Trustee, in trust for registered Holders of CDMC Mortgage Pass- Through
Certificates, Series 2004-3", and which must be an Eligible Account.

           "Commission": The Securities and Exchange Commission.

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           "Compensating Interest": As defined in Section 3.24 hereof.

         "Condemnation Proceeds": All awards or settlements in respect of a
taking of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.

           "Control Agreement": With respect to each Mortgage 100(sm) Loan, the
Merrill Lynch Pledged Collateral Account Control Agreement between the guarantor
or mortgagor, as applicable, the Additional Collateral Servicer and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, pursuant to which the guarantor or
mortgagor, as applicable, has granted a security interest in a Securities
Account.

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

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

         "Cooperative Building": The building and other property owned by a
Cooperative.

           "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
Assets, which lease or agreement confers an exclusive right to the holder of
such Cooperative Assets to occupy such apartment.

           "Cooperative Loan": The indebtedness of a Mortgagor evidenced by a
Mortgage Note which is secured by Cooperative Assets and which is being sold to
the Depositor pursuant to this Agreement, the Mortgage Loans in the related Loan
Group so sold being identified in the Mortgage Loan Schedule.

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

           "Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located, for Certificate transfer
purposes, at 111 Wall Street, 14th Floor, New York, New York 10005, Attention:
CDMC, Series 2004-3, or at such other address as the Trustee may designate from
time to time by notice to the Certificateholders, the Depositor and the Master
Servicer.

           "Corresponding Certificated Interests": With respect to each REMIC I
Regular Interest, the Class with the same designation.

           "Credit Support Depletion Date": The first Distribution Date on which
the Senior Percentage equals 100%.

           "Curtailment": Any Principal Prepayment made by a Mortgagor which is
not a Principal Prepayment in Full.

                                       11

<PAGE>

           "Cut-off Date": May 1, 2004.

           "Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date (or as of the
applicable date of substitution with respect to a Eligible Substitute Mortgage
Loan).

           "Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.

           "Defective Mortgage Loan": A Mortgage Loan replaced or to be replaced
by one or more Eligible Substitute Mortgage Loans.

           "Deficient Valuation": With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.

           "Definitive Certificates": As defined in Section 5.02(c) hereof.

           "Delinquent": As used herein, a Mortgage Loan is considered to be:
"one month" delinquent when a payment due on any scheduled due date remains
unpaid as of the close of business on the last Business Day immediately prior to
the next following monthly scheduled due date; "two months" delinquent when a
payment due on any scheduled due date remains unpaid as of the close of business
on the last Business Day immediately prior to the second following monthly
scheduled due date; and so on. The determination as to whether a Mortgage Loan
falls into these categories is made as of the close of business on the last
Business Day of each month. For example, a Mortgage Loan with a payment due on
July 1 that remained unpaid as of the close of business on July 31 would then be
considered to be one month delinquent. Delinquency information as of the Cut-off
Date is determined and prepared as of the close of business on the last Business
Day immediately prior to the Cut-off Date.

           "Depositor": Cendant Mortgage Capital LLC, a Delaware limited
liability company, or any successor in interest.

           "Depository": The initial Depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.

           "Depository Agreement": With respect to any Book-Entry Certificates,
the agreement among the Depositor, the Trustee and the initial Depository, to be
dated on or about the Closing Date.

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<PAGE>

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

           "Determination Date": With respect to any Distribution Date, the 15th
day of the calendar month in which such Distribution Date occurs or, if such
15th day is not a Business Day, the Business Day immediately preceding such 15th
day.

           "Directly Operate": With respect to any REO Property, the furnishing
or rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust Fund other than
through an Independent Contractor, provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.

           "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,
which Opinion of Counsel shall not be an expense of the Trustee, that the
holding of an ownership interest in a Residual Certificate by such Person may
cause the Trust or any Person having an ownership interest in the Residual
Certificate (other than such Person) to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the transfer
of an ownership interest in a Residual Certificate to such Person. The terms
"United States," "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.

           "Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.10(b) which shall be entitled
"Distribution Account, Citibank, N.A., as Trustee, in trust for the registered
Holders of the CDMC Mortgage Pass-Through Certificates, Series 2004-3" and which
must be an Eligible Account.

           "Distribution Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in June 2004.

           "Due Date": With respect to each Mortgage Loan and any Distribution
Date, the first day of the calendar month in which such Distribution Date occurs
on which the Monthly Payment for such Mortgage Loan was due, exclusive of any
days of grace.

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<PAGE>

           "Due Period": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which such
Distribution Date (or with respect to the first Due Period, the day following
the Cut-off Date) occurs and ending on the first day of the month in which such
Distribution Date occurs.

           "Effective Loan-to-Value Ratio": With respect to an Additional
Collateral Mortgage Loan, the ratio, expressed as a percentage, of (A) the
principal amount of the Mortgage Loan at origination less the value of any
Additional Collateral securing the Mortgage Loan, to (B) the lesser of (1) the
appraised value determined in an appraisal or other collateral assessment tool
obtained at origination of the Mortgage Loan and (2) the sales price for the
related Mortgaged Property.

           "Eligible Account": Any of (i) an account or accounts maintained with
a depository institution the short-term debt obligations of which have been
rated by the Rating Agency in its highest rating available, (ii) in a depository
institution in which such accounts are fully insured to the limits established
by the FDIC, provided that any deposits not so insured shall, to the extent
acceptable to the Rating Agency, as evidenced in writing, be maintained such
that (as evidenced by an Opinion of Counsel delivered to the Trustee and the
Rating Agency) the registered Holders of Certificates have a claim with respect
to the funds in such account or a perfected first security interest against any
collateral (which shall be limited to Permitted Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity, (iv) an account or accounts of a depository
institution acceptable to the Rating Agency (as evidenced in writing by the
Rating Agency that use of any such account will not reduce the rating assigned
to any Class of Certificates by the Rating Agency below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency) or (v) an account or accounts maintained
with a federal or state chartered depository institution or trust company that
meet the depository requirements of Fannie Mae or Freddie Mac. Eligible Accounts
may bear interest.

           "Eligible Funds": With respect to each Distribution Date, the
portion, if any, of the Available Distribution Amount remaining after reduction
by the sum of the Senior Interest Distribution Amount, the Senior Principal
Distribution Amount, determined without regard to clause (D) of its definition,
and the aggregate amount of the Monthly Interest Distributable Amount on the
Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates.

           "Eligible Substitute Mortgage Loan": A mortgage loan substituted for
a Defective Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of the outstanding principal
balance of the Defective Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, the amount of any shortfall to be
deposited by the Master Servicer in the Collection Account in the month of
substitution, (ii) have a Loan Rate, not less than the Loan Rate of the
Defective Mortgage Loan and not more than 1% in excess of the Loan Rate of such
Defective Mortgage Loan, (iii) have a remaining term to maturity not greater
than (and not more than one year less than) that of the Defective Mortgage Loan,
(iv) be current as of the date of substitution, (v) have a Loan-to-Value Ratio
as of the date of substitution equal to or lower than the Loan-to-

                                       14

<PAGE>

Value Ratio of the Defective Mortgage Loan as of such date and (vi) conform to
each representation and warranty set forth in Section 2.04 hereof applicable to
the Defective Mortgage Loan. In the event that one or more mortgage loans are
substituted for one or more Defective Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate principal
balances, the Loan Rates described in clause (ii) hereof shall be determined on
the basis of weighted average Loan Rates, the terms described in clause (iii)
hereof shall be determined on the basis of weighted average remaining term to
maturity, the Loan-to-Value Ratios described in clause (v) hereof shall be
satisfied as to each such mortgage loan and, except to the extent otherwise
provided in this sentence, the representations and warranties described in
clause (vi) hereof must be satisfied as to each Eligible Substitute Mortgage
Loan or in the aggregate, as the case may be. Any Mortgage Loan substituted for
a Mortgage Loan which has an arrearage due to the application of any related
forbearance plan with respect to such Mortgage Loan, will be treated as having
such an arrearage due to the application of any related forbearance plan with
respect to such Mortgage Loan.

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

           "ERISA-Restricted Certificates": Any of the Class B-4, Class B-5,
Class B-6 and Class R Certificates.

           "Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard insurance
premiums and other payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to any Mortgage Loan.

           "Estate in Real Property": A fee simple estate in a parcel of real
property.

           "Excess Losses": (i) Special Hazard Losses in excess of the Special
Hazard Amount, (ii) Bankruptcy Losses in excess of the Bankruptcy Amount, (iii)
Fraud Losses in excess of the Fraud Loss Amount and (iv) Extraordinary Losses.

           "Excess Subordinate Principal Amount": With respect to any
Distribution Date on which the Certificate Principal Balance of the Class or
Classes of Certificates then outstanding with the Lowest Priority is to be
reduced to zero and on which Realized Losses are to be allocated to that Class
or those Classes, the amount, if any, by which (i) the amount of principal that
would otherwise be distributable on that Class or those Classes of Certificates
on such Distribution Date is greater than (ii) the excess, if any, of the
aggregate Certificate Principal Balance of that Class or those Classes of
Certificates immediately prior to such Distribution Date over the aggregate
amount of Realized Losses to be allocated to that Class or those Classes of
Certificates on such Distribution Date.

           "Exchange Act": The Securities and Exchange Act of 1934, as amended.

           "Extraordinary Loss": Any Realized Loss or portion thereof caused by
or resulting from:

                      (i) nuclear or chemical reaction or nuclear radiation or
           radioactive or chemical contamination, all whether controlled or
           uncontrolled and whether such loss be direct or indirect, proximate
           or remote or be in whole or in part caused by, contributed to or
           aggravated by a peril covered by the definition of the term "Special
           Hazard Loss";

                                       15

<PAGE>

                      (ii) hostile or warlike action in time of peace or war,
           including action in hindering, combating or defending against an
           actual, impending or expected attack by any government or sovereign
           power, DE JURE or DE FACTO, or by any authority maintaining or using
           military, naval or air forces, or by military, naval or air forces,
           or by an agent of any such government, power, authority or forces;

                      (iii) any weapon of war employing atomic fission or
           radioactive forces whether in time of peace or war, and

                      (iv) insurrection, rebellion, revolution, civil war,
           usurped power or action taken by governmental authority in hindering,
           combating or defending against such an occurrence, seizure or
           destruction under quarantine or customs regulations, confiscation by
           order of any government or public authority, or risks of contraband
           or illegal transactions or trade.

           "Extraordinary Trust Fund Expenses": Any amounts reimbursable to the
Master Servicer or the Depositor pursuant to Section 6.03, any amounts
reimbursable to the Trustee from the Trust Fund pursuant to this Agreement,
including but not limited to Section 8.05, and any other costs, expenses,
liabilities and losses borne by the Trust Fund (exclusive of any cost, expense,
liability or loss that is specific to a particular Mortgage Loan or REO Property
and is taken into account in calculating a Realized Loss in respect thereof) for
which the Trust Fund has not and, in the reasonable good faith judgment of the
Trustee, shall not, obtain reimbursement or indemnification from any other
Person.

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

           "FDIC": Federal Deposit Insurance Corporation or any successor
thereto.

           "Fidelity Bond": Shall have the meaning assigned thereto in Section
3.14.

           "Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by a Seller or the Master Servicer pursuant to or as contemplated by
Section 2.03 or 10.01), a determination made by the Master Servicer that all
Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which
the Master Servicer, in its reasonable good faith judgment, expects to be
finally recoverable in respect thereof have been so recovered. The Master
Servicer shall maintain records, prepared by a Servicing Officer, of each Final
Recovery Determination made thereby.

           "Fitch": Fitch, Inc., doing business as Fitch Ratings, and any
successor thereto or its successor in interest.

           "Foreclosure Price": The amount reasonably expected to be received
from the sale of the related Mortgaged Property net of any expenses associated
with foreclosure proceedings.

           "Foreclosure Profits": As to any Distribution Date or related
Determination Date and any Mortgage Loan, the excess, if any, of Liquidation
Proceeds, Insurance Proceeds and proceeds from any REO Disposition (net of all
amounts reimbursable therefrom pursuant to Section 3.11(a)(iii))

                                       16

<PAGE>

in respect of each Mortgage Loan or REO Property for which a Cash Liquidation or
REO Disposition occurred in the related Prepayment Period over the sum of the
unpaid principal balance of such Mortgage Loan or REO Property (determined, in
the case of an REO Disposition, in accordance with Section 3.16) plus accrued
and unpaid interest at the Mortgage Rate on such unpaid principal balance from
the Due Date to which interest was last paid by the Mortgagor to the first day
of the month following the month in which such Cash Liquidation or REO
Disposition occurred.

           "Fraud Loss Amount": As of any date of determination after the
Cut-off Date, prior to the third anniversary of the Cut-off Date, an amount
equal to 1.00% of the aggregate outstanding principal balance of all of the
Mortgage Loans as of the Cut-off Date minus the Fraud Losses allocated solely to
one or more specific Classes of Certificates in accordance with Section 4.02
since the most recent anniversary of the Cut-off Date up to such date of
determination. On and after the third anniversary of the Cut-off Date, the Fraud
Loss Amount shall be zero.

           The Fraud Loss Amount may be further reduced by the Master Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i) obtain written
conformation from the Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written conformation to the Trustee.

           "Fraud Losses": Losses sustained on a Liquidated Mortgage Loan by
reason of a default arising from fraud, dishonesty or misrepresentation.

           "Freddie Mac": Federal Home Loan Mortgage Corporation or any
successor thereto.

           "Highest Priority": As of any date of determination, the Class of
Subordinate Certificates then outstanding with the earliest priority for
payments pursuant to Section 4.01(c), in the following order: Class B-1, Class
B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates.

           "HUD": The United States Department of Housing and Urban Development,
or any successor thereto and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.

           "Independent": When used with respect to any specified Person, any
such Person who (a) is in fact independent of the Depositor, the Master Servicer
and their respective Affiliates, (b) does not have any direct financial interest
in or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; PROVIDED, HOWEVER, that a Person shall not fail to be Independent of
the Depositor or the Master Servicer or any Affiliate thereof merely because
such Person is the beneficial owner of 1% or less of any class of securities
issued by the Depositor or the Master Servicer or any Affiliate thereof, as the
case may be.

           "Independent Contractor": Either (i) any Person (other than the
Master Servicer) that would be an "independent contractor" with respect to the
Trust Fund within the meaning of Section

                                       17

<PAGE>

856(d)(3) of the Code if the Trust Fund were a real estate investment trust
(except that the ownership tests set forth in that section shall be considered
to be met by any Person that owns, directly or indirectly, 35 percent or more of
any Class of Certificates), so long as the Trust Fund does not receive or derive
any income from such Person and provided that the relationship between such
Person and the Trust Fund is at arm's length, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or (ii) any other Person (including the Master
Servicer) if the Trustee has received an Opinion of Counsel, which Opinion of
Counsel shall be an expense of the Trust Fund, to the effect that the taking of
any action in respect of any REO Property by such Person, subject to any
conditions therein specified, that is otherwise herein contemplated to be taken
by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code), or cause any income realized in respect of such
REO Property to fail to qualify as rents from real property.

           "Initial Certificate Principal Balance": With respect to any Regular
Certificate, the amount designated "Initial Certificate Principal Balance" on
the face thereof.

           "Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Master
Servicer would follow in servicing mortgage loans held for its own account,
subject to the terms and conditions of the related Mortgage Note and Mortgage.

           "Interest Accrual Period": With respect to any Distribution Date and
any Class of Certificates, the calendar month immediately preceding the month in
which such Distribution Date occurs.

           "Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Due Period and not previously recovered.

           "Limited Purpose Surety Bond": The Limited Purpose Surety Bond
(Policy No. AB0039BE), dated February 28, 1996 in respect to certain Additional
Collateral Mortgage Loans, issued by Ambac Assurance Corporation (f/k/a Ambac
Indemnity Corporation) for the benefit of certain beneficiaries, including the
Trustee for the benefit of the Certificateholders, but only to the extent that
such Limited Purpose Surety Bond covers any Additional Collateral Mortgage
Loans.

           "Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Master Servicer has determined, in accordance with
the servicing procedures specified herein, as of the end of the related Due
Period, that all Liquidation Proceeds and Insurance Proceeds which it expects to
recover with respect to the liquidation of the Mortgage Loan or disposition of
the related REO Property have been recovered.

                                       18

<PAGE>

           "Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 or Section 10.01. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.23 or Section 10.01.

           "Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise (including, with respect to a defaulted Mortgage
Loan that is an Additional Collateral Mortgage Loan, the amount realized on the
related Additional Collateral with respect to such Mortgage Loan in accordance
with Section 3.16), or (iii) the repurchase, substitution or sale of a Mortgage
Loan or an REO Property pursuant to or as contemplated by Section 2.03, Section
3.16 or Section 10.01.

           "Loan Balance": As of any date, the aggregate Stated Principal
Balance of all of the Mortgage Loans as of such date.

           "Loan-to-Value Ratio": As of any date and Mortgage Loan (other than
an Additional Collateral Mortgage Loan), the fraction, expressed as a
percentage, the numerator of which is the Stated Principal Balance of the
Mortgage Loan, and the denominator of which is the Value of the related
Mortgaged Property. As of any date and any Additional Collateral Mortgage Loan,
the related Effective Loan-to-Value Ratio.

           "Loan Rate": With respect to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note, which rate shall remain
constant at the rate set forth in the Mortgage Loan Schedule as the Loan Rate in
effect immediately following the Cut-off Date. With respect to each Mortgage
Loan that becomes an REO Property, as of any date of determination, the annual
rate determined in accordance with the immediately preceding sentence as of the
date such Mortgage Loan became an REO Property.

           "Lockout Percentage": With respect to any Distribution Date, the
Certificate Principal Balance of the Class A-8 Certificates, divided by the
aggregate Certificate Principal Balance of the Senior Certificates, in each case
immediately prior to any allocations of losses or distributions on that
Distribution Date.

           "Lockout Prepayment Percentage": With respect to any Distribution
Date, the product of (i) the Lockout Percentage and (ii) the Stepdown
Percentage.

           "Lockout Scheduled Percentage": With respect to any Distribution Date
(i) occurring prior to June 2009, 0% and (ii) occurring in or after June 2009,
the Lockout Percentage.

                                       19

<PAGE>

           "Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Depositor as applicable certifying that the
original Mortgage Note has been lost, misplaced or destroyed (together with a
copy of the related Mortgage Note and indemnifying the Trust against any loss,
cost or liability resulting from the failure to deliver the original Mortgage
Note) in the form of Exhibit H hereto.

           "Lower Priority": As of any date of determination and with respect to
any Class of Subordinate Certificates, any other Class of Subordinate
Certificates then outstanding with a later priority for payments pursuant to
Section 4.01(c).

           "Lowest Priority": As of any date of determination, the Class of
Subordinate Certificates then outstanding with the latest priority for payments
pursuant to Section 4.01(c), in the following order: Class B-6, Class B-5, Class
B-4, Class B-3, Class B-2 and Class B-1 Certificates.

           "Majority Certificateholders": The Holders of Certificates evidencing
at least 51% of the Voting Rights.

           "Master Servicer Affiliate": A Person (i) controlling, controlled by
or under common control with the Master Servicer or which is 50% or more owned
by the Master Servicer and (ii) which is qualified to service residential
mortgage loans.

           "Master Servicer Event of Termination": One or more of the events
described in Section 7.01.

           "Master Servicer Remittance Date": With respect to any Distribution
Date, the Business Day prior to such Distribution Date.

           "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.

           "MLCC": Merrill Lynch Credit Corporation and its successors in
interest.

           "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.

           "Monthly Interest Distributable Amount": An amount equal to the
interest accrued during the related Interest Accrual Period on the Certificate
Principal Balance of each Class of Certificates at the then-applicable
Pass-Through Rate. The Monthly Interest Distributable Amount on any Class of
Certificates will be reduced by the amount of (i) Prepayment Interest Shortfalls
(to the extent not

                                       20

<PAGE>

offset by the Master Servicer with a payment of Compensating Interest as
provided in Section 3.24), (ii) the interest portion (adjusted to the Net
Mortgage Rate) of Realized Losses (including Excess Losses and Extraordinary
Losses) not allocated solely to one or more specific Classes of Certificates
pursuant to Section 4.02, (iii) the interest portion of Advances previously made
with respect to a Mortgage Loan or REO Property which remained unreimbursed
following the Cash Liquidation or REO Disposition of such Mortgage Loan or REO
Property that were made with respect to delinquencies that were ultimately
determined to be Excess Losses or Extraordinary Losses and (iv) any other
interest shortfalls not covered by the subordination provided by the Class B
Certificates, including Relief Act Shortfalls, with all such reductions
allocated among all of the Certificates in proportion to their respective
amounts of Monthly Interest Distributable Amount payable on such Distribution
Date which would have resulted absent such reductions.

           "Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.01; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.

           "Mortgage": The mortgage, deed of trust or other instrument creating
a first lien on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.

           "Mortgage 100(sm) Loan": A Mortgage Loan secured by Additional
Collateral in the form of a security interest in the Securities Account and the
financial assets held therein and having a value, as of the date of origination
of such Mortgage Loan, of at least equal to the related Original Additional
Collateral Requirement.

           "Mortgage 100(sm) Pledge Agreement": With respect to each Mortgage
100(sm) Loan, the Pledge Agreement for Securities Account between the related
mortgagor and the Additional Collateral Servicer pursuant to which such
mortgagor granted a security interest in the related securities and other
financial assets held therein.

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

           "Mortgage Loan": Each mortgage loan (including the Cooperative Loans)
transferred and assigned to the Trustee pursuant to Section 2.01 or Section
2.03(d) as from time to time held as a part of the Trust Fund, the Mortgage
Loans so held being identified in the Mortgage Loan Schedule.

           "Mortgage Loan Purchase Agreement": The mortgage loan purchase
agreement, dated as of May 1, 2004, among the Sellers and the Depositor,
regarding the transfer of the Mortgage Loans.

                                       21

<PAGE>

         "Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
identifying the Mortgage Loans transferred from the Sellers, and attached hereto
as Exhibit D. The Mortgage Loan Schedule shall set forth the following
information with respect to each Mortgage Loan:

                  (i)        the Sellers' Mortgage Loan identifying number;

                  (ii)       [reserved];

                  (iii)      the zip code of the related Mortgaged Property;

                  (iv)       a code indicating whether the Mortgaged Property is
                             owner-occupied;

                  (v)        the type of Residential Dwelling constituting the
                             Mortgaged Property;

                  (vi)       the original months to maturity;

                  (vii)      the original date of the mortgage;

                  (viii)     the Loan-to-Value Ratio or Effective Loan-to-Value
                             Ratio, as applicable, at origination;

                  (ix)       the loan rate;

                  (x)        the date on which the first Monthly Payment was due
                             on the Mortgage Loan;

                  (xi)       the stated maturity date;

                  (xii)      the amount of the Monthly Payment at origination;

                  (xiii)     the amount of the Monthly Payment as of the Cut-off
                             Date;

                  (xiv)      the next Due Date on which a Monthly Payment is
                             due;

                  (xv)       the original principal amount of the Mortgage Loan;

                  (xvi)      the unpaid principal balance of the Mortgage Loan
                             as of the close of business on the Cut-off Date;

                  (xvii)     a code indicating the purpose of the Mortgage Loan
                             (i.e., purchase financing, Rate/Term Refinancing,
                             Cash-Out Refinancing);

                  (xviii)    a code indicating the documentation style (i.e.,
                             full, alternative or reduced);

                  (xix)      a code indicating if the Mortgage Loan is subject
                             to a Primary Insurance Policy;

                                       22

<PAGE>

                  (xx)       the name of the Qualified Insurer and the
                             certificate number for any Primary Insurance
                             Policy, if applicable;

                  (xxi)      the depth of coverage of any Primary Insurance
                             Policy, if applicable;

                  (xxii)     the Value of the Mortgaged Property;

                  (xxiii)    the sale price of the Mortgaged Property, if
                             applicable;

                  (xxiv)     the Servicing Fee;

                  (xxv)      whether the Mortgage Loan is a Buydown Mortgage
                             Loan; and

                  (xxvi)     the amount of the Original Additional Collateral
                             Requirement, if any.

         The Mortgage Loan Schedule shall set forth the following information
with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1)
the number of Mortgage Loans; (2) the current principal balance of the Mortgage
Loans; (3) the weighted average Loan Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans. The Mortgage Loan Schedule
shall be amended from time to time by the Master Servicer in accordance with the
provisions of this Agreement. With respect to any Eligible Substitute Mortgage
Loan, Cut-off Date shall refer to the related Cut-off Date for such Mortgage
Loan, determined in accordance with the definition of Cut-off Date herein.

         "Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.

         "Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof.

         "Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of an Estate in Real Property improved by
a Residential Dwelling.

         "Mortgagor": The obligor on a Mortgage Note.

         "Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of Advances, Servicing Advances,
Servicing Fees and any other accrued and unpaid Servicing Fees received and
retained in connection with the liquidation of such Mortgage Loan or Mortgaged
Property Rate.

         "Net Mortgage Rate": With respect to any Mortgage Loan, (x) the Loan
Rate minus (y) the Servicing Fee Rate and the Trustee Fee Rate.

         "New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.

                                       23

<PAGE>

         "Nonrecoverable Advance": Any Advance or Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO Property that,
in the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed Advance or Servicing Advance, would not be ultimately
recoverable from Late Collections on such Mortgage Loan or REO Property as
provided herein.

         "Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Master Servicer or the
Depositor, as applicable.

         "Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Master Servicer,
acceptable to the Trustee, except that any opinion of counsel relating to (a)
the qualification of any REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.

         "Optional Termination Date": The first Distribution Date on which the
Master Servicer may opt to terminate the Trust Fund pursuant to Section 10.01.

         "Original Additional Collateral Requirement': With respect to any
Additional Collateral Mortgage Loan, an amount equal to the Additional
Collateral required at the time of the origination of such Additional Collateral
Mortgage Loan in order to achieve an Effective Loan-to-Value Ratio for such
Additional Collateral Mortgage Loan, generally equal to seventy percent (70%);
for purposes of the Required Surety Payment, in no event shall the Original
Additional Collateral Requirement for an Additional Collateral Mortgage Loan
exceed thirty percent (30%) of its original principal balance.

         "Original Certificate Principal Balance": With respect to each Class of
the Certificates, the Certificate Principal Balance thereof on the Closing Date,
as set forth opposite such Class above in the Preliminary Statement.

         "Original Subordinated Principal Balance": The aggregate of the
Certificate Principal Balances of the Subordinate Certificates as of the Cut-off
Date.

         "Other Insurance Proceeds": Proceeds of any title policy, hazard policy
or other insurance policy covering a Mortgage Loan, other than the Primary
Insurance Policy, if any, to the extent such proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the Mortgagor
in accordance with the procedures that the Master Servicer would follow in
servicing mortgage loans held for its own account.

         "Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.

         "Parent Power(R) Agreement": With respect to each Parent Power(R)
Mortgage Loan, a Parent Power(R) Guaranty and Security Agreement for Securities
Account.

                                       24

<PAGE>

         "Parent Power(R) Guaranty and Security Agreement for Securities
Account": With respect to a Parent Power(R) Mortgage Loan, an agreement between
the Additional Collateral Servicer and a guarantor on behalf of the mortgagor
under such Parent Power(R) Mortgage Loan pursuant to which such guarantor
guarantees the payment of certain losses under such Parent Power(R) Mortgage
Loan and has granted a security interest to the Additional Collateral Servicer
in certain marketable securities to collateralize such guaranty. The required
amount of such collateral is at least equal to the Original Additional
Collateral Requirement for such Parent Power(R) Mortgage Loan.

         "Parent Power(R) Mortgage Loan": A Mortgage Loan having at the time of
origination a Loan- to-Value Ratio generally in excess of the Master Servicer's
maximum acceptable Loan-to-Value Ratio for such Mortgage Loan as set forth in
the Underwriting Guide, which Mortgage Loan is supported by a Parent Power(R)
Agreement.

         "Pass-Through Rate": With respect to the Certificates (other than the
Class A-1 Certificates and Class A-7 Certificates) and any Distribution Date, a
per annum rate equal to the weighted average of the Net Mortgage Rates on each
Mortgage Loan. With respect to the Class A-1 Certificates and any Distribution
Date, a per annum rate equal to (i) the weighted average of the Net Mortgage
Rate on each Mortgage Loan minus (ii) 0.50%. With respect to the Class A-7
Certificates and any Distribution Date, a per annum rate equal to the sum of (i)
the weighted average of the Net Mortgage Rate on each Mortgage Loan and (ii)
0.50% per annum multiplied by a fraction, the numerator of which is the
Certificate Principal Balance of the Class A-1 Certificates and the denominator
of which is the Certificate Principal Balance of the Class A-7 Certificates. For
federal income tax purposes, however, the Class A-1 Certificates will have a per
annum rate equal to (i) the Uncertificated Pass-Through Rate on the REMIC I
Regular Interest A-1 minus (ii) 0.50%. For federal income tax purposes, the
Class A-7 Certificates will represent ownership of the Class A-7A Component and
Class A-7B Component; the Pass-Through Rate with respect to the Class A-7A
Component is a per annum rate equal to the Uncertificated Pass-Through Rate on
REMIC I Regular Interest A-1, which will be applied to the Class A-7A Component
Principal Amount, and the Pass- Through Rate with respect to the Class A-7B
Component is 0.50% per annum, which will be applied to the Class A-7B Component
Notional Amount.

         "Paying Agent": Any paying agent appointed pursuant to Section 5.05.

         "Percentage Interest": With respect to any Certificate (other than a
Class R Certificate), a fraction, expressed as a percentage, the numerator of
which is the Initial Certificate Principal Balance, represented by such
Certificate and the denominator of which is the Original Certificate Principal
Balance of the related Class. With respect to any Class of Class R Certificates,
the portion of such Class evidenced thereby, expressed as a percentage, as
stated on the face of such Certificate; provided, however, that the sum of all
such percentages for each such Class totals 100%.

         "Permitted Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Master Servicer, the Trustee
or any of their respective Affiliates or for which an Affiliate of the Trustee
serves as an advisor:

                                       25

<PAGE>

                  (i) obligations of or guaranteed as to principal and interest
         by the United States or any agency or instrumentality thereof when such
         obligations are backed by the full faith and credit of the United
         States;

                  (ii) repurchase agreements on obligations specified in clause
         (i) maturing not more than one month from the date of acquisition
         thereof, provided that the unsecured obligations of the party agreeing
         to repurchase such obligations are at the time rated by the Rating
         Agency in its highest short-term rating available;

                  (iii) federal funds, certificates of deposit, demand deposits,
         time deposits and bankers' acceptances (which shall each have an
         original maturity of not more than 90 days and, in the case of bankers'
         acceptances, shall in no event have an original maturity of more than
         365 days or a remaining maturity of more than 30 days) denominated in
         United States dollars of any U.S. depository institution or trust
         company incorporated under the laws of the United States or any state
         thereof or of any domestic branch of a foreign depository institution
         or trust company; provided that the debt obligations of such depository
         institution or trust company (or, if the only Rating Agency is S&P, in
         the case of the principal depository institution in a depository
         institution holding company, debt obligations of the depository
         institution holding company) at the date of acquisition thereof have
         been rated by the Rating Agency in its highest short-term rating
         available; and provided further that, if the only Rating Agency is S&P
         and if the depository or trust company is a principal subsidiary of a
         bank holding company and the debt obligations of such subsidiary are
         not separately rated, the applicable rating shall be that of the bank
         holding company; and, provided further that, if the original maturity
         of such short-term obligations of a domestic branch of a foreign
         depository institution or trust company shall exceed 30 days, the
         short-term rating of such institution shall be A-1+ in the case of S&P
         if S&P is the Rating Agency;

                  (iv) commercial paper and demand notes (having original
         maturities of not more than 365 days) of any corporation incorporated
         under the laws of the United States or any state thereof which on the
         date of acquisition has been rated by the Rating Agency in its highest
         short-term rating available; provided that such commercial paper shall
         have a remaining maturity of not more than 30 days;

                  (v) a money market fund or a qualified investment fund rated
         by the Rating Agency in its highest long-term rating available; and

                  (vi) other obligations or securities that are acceptable to
         the Rating Agency as a Permitted Investment hereunder and will not
         reduce the rating assigned to any Class of Certificates by such Rating
         Agency below the lower of the then-current rating or the rating
         assigned to such Certificates as of the Closing Date by such Rating
         Agency, as evidenced in writing;

provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.

                                       26

<PAGE>

         "Permitted Transferee": Any Person other than a Disqualified
Organization, an "electing large partnership" as defined in Section 775(a) of
the Code, or a non-U.S. Person.

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

         "Prepayment Distribution Trigger": With respect to any Distribution
Date and any Class of Subordinate Certificates (other than the Class B-1
Certificates), a test that shall be satisfied if the fraction (expressed as a
percentage) equal to the sum of the Certificate Principal Balances of such Class
and each Class of Subordinate Certificates with a Lower Priority than such Class
immediately prior to such Distribution Date divided by the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date is greater than or equal to the sum
of the related initial Class B Percentages of such Classes of Subordinate
Certificates.

         "Prepayment Interest Shortfall": As to any Distribution Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the
amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for
such Prepayment Period to the date of such Principal Prepayment in Full or (b) a
Curtailment during the prior calendar month, an amount equal to one month's
interest at the Net Mortgage Rate on the amount of such Curtailment. The
obligations of the Master Servicer in respect of any Prepayment Interest
Shortfall are set forth in Section 3.24.

         "Prepayment Period": With respect to any Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs.

         "Primary Insurance Policy": Each policy of primary guaranty mortgage
insurance issued by a Qualified Insurer in effect with respect to any Mortgage
Loan, or any replacement policy therefor obtained by the Master Servicer
pursuant to Section 3.13.

         "Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date and
which is not accompanied by an amount of interest representing the full amount
of scheduled interest due on any Due Date in any month or months subsequent to
the month of prepayment.

         "Principal Prepayment in Full": Any Principal Prepayment made by a
Mortgagor of the entire unpaid principal balance of the Mortgage Loan.

         "Private Certificates": Any of the Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6 Certificates.

         "Property Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are received by the Master Servicer and are not to be applied to the
restoration of the related Mortgaged Property or released to the

                                       27

<PAGE>

Mortgagor in accordance with the Master Servicer's servicing procedures, subject
to the terms and conditions of the related Mortgage Note and Mortgage.

         "Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officers' Certificate from the Master Servicer to the Trustee,
an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof
as of the date of purchase (or such other price as provided in Section 10.01),
(ii) in the case of (x) a Mortgage Loan, accrued interest on such Stated
Principal Balance at the applicable Loan Rate in effect from time to time from
the Due Date as to which interest was last covered by a payment by the Mortgagor
or an advance by the Master Servicer, which payment or advance had as of the
date of purchase been distributed pursuant to Section 4.01, through the end of
the calendar month in which the purchase is to be effected, and (y) an REO
Property, the sum of (1) accrued interest on such Stated Principal Balance at
the applicable Loan Rate in effect from time to time from the Due Date as to
which interest was last covered by a payment by the Mortgagor or an advance by
the Master Servicer through the end of the calendar month immediately preceding
the calendar month in which such REO Property was acquired, plus (2) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such purchase is to be effected, net of the total of all
net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as
of the date of purchase had been distributed as or to cover REO Imputed Interest
pursuant to Section 4.07, (iii) any unreimbursed Servicing Advances and Advances
and any unpaid Servicing Fees allocable to such Mortgage Loan or REO Property,
(iv) any amounts previously withdrawn from the Collection Account in respect of
such Mortgage Loan or REO Property pursuant to Section 3.23, and (v) in the case
of a Mortgage Loan required to be purchased pursuant to Section 2.03, expenses
reasonably incurred or to be incurred by the Master Servicer or the Trustee in
respect of the breach or defect giving rise to the purchase obligation.

         "Qualified Insurer": Any insurance company acceptable to Fannie Mae or
Freddie Mac.

         "Rate/Term Refinancing": A Refinanced Mortgage Loan which is not a
Cash-Out Refinancing.

         "Rating Agency": Fitch or its successor. If such agency or its
successor is no longer in existence, "Rating Agency" shall be such nationally
recognized statistical rating agency, or other comparable Persons, designated by
the Depositor, notice of which designation shall be given to the Trustee and
Master Servicer.

         "Realized Loss": With respect to a Liquidated Mortgage Loan, the amount
by which the remaining unpaid principal balance of the Mortgage Loan exceeds the
amount of Liquidation Proceeds applied to the principal balance of the related
Mortgage Loan.

         "Record Date": With respect to all of the Certificates, the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs.

         "Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were
used to satisfy an existing mortgage loan on the Mortgaged Property.

                                       28

<PAGE>

         "Regular Certificate": Any of the Class A Certificates and Class B
Certificates.

         "Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes, Mortgages and other related documents.

         "Relief Act": The Servicemembers Civil Relief Act.

         "Relief Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan as to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended Due Period as a result
of the application of the Relief Act, the amount by which (i) interest
collectible on such Mortgage Loan during such Due Period is less than (ii) one
month's interest on the Stated Principal Balance of such Mortgage Loan at the
Loan Rate for such Mortgage Loan before giving effect to the application of the
Relief Act.

         "REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.

         "REMIC I": The segregated pool of assets, with respect to which a REMIC
election is to be made, consisting of: (i) each Mortgage Loan (exclusive of
payments of principal and interest due on or before the Cut-off Date, if any,
received by the Master Servicer which shall not constitute an asset of the Trust
Fund) as from time to time are subject to this Agreement and all payments under
and proceeds of such Mortgage Loans (exclusive of any prepayment fees and late
payment charges received on the Mortgage Loans), together with all documents
included in the related Mortgage File, subject to Section 2.01; (ii) such funds
or assets as from time to time are deposited in the Collection Account or the
Distribution Account and belonging to the Trust Fund; (iii) any REO Property;
(iv) the Primary Hazard Insurance Policies, if any, the Primary Insurance
Policies, if any, and all other Insurance Policies with respect to the Mortgage
Loans; (v) the Depositor's rights in respect of the Additional Collateral and
the Limited Purpose Surety Bond, including the assignment of the Depositor's
rights under the Additional Collateral Servicing Agreement; and (vi) the
Depositor's interest in respect of the representations and warranties made by
the Sellers in the Mortgage Loan Purchase Agreement as assigned to the Trustee
pursuant to Section 2.04 hereof. The Trust Fund shall not include the Buydown
Account.

         "REMIC I Regular Interests": The uncertificated partial undivided
beneficial ownership interests in REMIC I, designated as REMIC I Regular
Interests A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, B-1, B-2, B-3, B-4, B-5, B-6
and R-II, with respect to which a REMIC election is to be made.

         "REMIC II": The segregated pool of assets consisting of the REMIC I
Regular Interests conveyed in trust to the Trustee for the benefit of the
holders of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-7, Class A-8, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5,
Class B-6 and Class R-II Certificates pursuant to Section 9.01, with respect to
which a separate REMIC election is to be made pursuant to Section 9.01.]

         "REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.

                                       29

<PAGE>

         "Remittance Report": A report prepared by the Master Servicer and
delivered to the Trustee pursuant to Section 4.03.

         "Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.

         "REO Account": The account or accounts maintained by the Master
Servicer in respect of an REO Property pursuant to Section 3.23.

         "REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust Fund.

         "REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan if appropriate) as of the close of business on the
Distribution Date in such calendar month.

         "REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Master Servicer
pursuant to Section 3.23 for unpaid Servicing Fees in respect of the related
Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of
such REO Property or the related Mortgage Loan, over (b) the REO Imputed
Interest in respect of such REO Property for such calendar month.

         "REO Property": A Mortgaged Property acquired by the Master Servicer on
behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23. hereto.

         "Request for Release": A release signed by a Servicing Officer, in the
form of Exhibit E attached

         "Required Surety Payment": With respect to any Additional Collateral
Mortgage Loan that becomes a Liquidated Mortgage Loan, the lesser of (i) the
principal portion of the Realized Loss with respect to such Mortgage Loan and
(ii) the excess, if any, of (a) the Original Additional Collateral Requirement
with respect to such Mortgage Loan over (b) the net proceeds realized by the
Additional Collateral Servicer from the related Additional Collateral as set
forth in Section 3.16.

         "Residential Dwelling": Any one of the following: (i) an attached or
detached one-family dwelling unit, (ii) two- to four-family dwelling unit, (iii)
condominium, (iv) townhouse, (v) row house, or (vi) individual unit in a planned
unit development.

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<PAGE>

         "Residual Certificate": Any of the Class R Certificates.

         "Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.

         "Responsible Officer": When used with respect to the Trustee, any
officer, 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 in each case having direct responsibility for the
administration of this Agreement.

         "Restricted Classes": With respect to any Class of Certificates, any
Classes of Certificates with a lower priority of payment relative to such Class.

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

         "Securities Account": With respect to any Additional Collateral
Mortgage Loans, the account, together with the financial assets held therein,
that is the subject of the related Mortgage 100(sm) Pledge Agreement.

         "Security Agreement": With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Assets.

         "Seller": Either of (i) Cendant Mortgage Corporation, a New Jersey
corporation, or any successor in interest or (ii) Bishop's Gate Residential
Mortgage Trust, a Delaware business trust, or any successor in interest.

         "Senior Certificates": The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7 and Class A-8 and Class R Certificates.

         "Senior Interest Distribution Amount": With respect to each
Distribution Date, the aggregate amount of the Monthly Interest Distributable
Amount to be distributed to the Holders of the Senior Certificates for such
Distribution Date.

         "Senior Percentage": As of any Distribution Date, the lesser of 100%
and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class A Certificates and Class R
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans or
related REO Properties immediately prior to such Distribution Date.

         "Senior Prepayment Percentage": With respect to any Distribution Date,
the percentage indicated below:

<TABLE>
<CAPTION>
DISTRIBUTION DATE                                                  SENIOR PREPAYMENT PERCENTAGE
-----------------                                                  ----------------------------
<S>                                                                <C>
June 2004 through May 2009                                         100%

                                                        31

<PAGE>

June 2009 through May 2010                                         Senior Percentage, plus 70% of the
                                                                   Subordinate Percentage

June 2010 through May 2011                                         Senior Percentage, plus 60% of the
                                                                   Subordinate Percentage

June 2011 through May 2012                                         Senior Percentage, plus 40% of the
                                                                   Subordinate Percentage

June 2012 through May 2013                                         Senior Percentage, plus 20% of the
                                                                   Subordinate Percentage

June 2013 and thereafter                                           Senior Percentage
</TABLE>

provided, however, (i) that any scheduled reduction to the Senior Prepayment
Percentage described above shall not occur as of any Distribution Date unless
either (a)(1)(x) the outstanding principal balance of Mortgage Loans Delinquent
60 days or more (including Mortgage Loans in foreclosure and REO Property)
averaged over the last six months as a percentage of the aggregate outstanding
Certificate Principal Balance of the Class B Certificates as of such
Distribution Date, is less than 50%, or (y) the outstanding principal balance of
Mortgage Loans Delinquent 60 days or more (including Mortgage Loans in
foreclosure and REO Property) averaged over the last six months, as a percentage
of the aggregate outstanding principal balance of all Mortgage Loans as of such
Distribution Date, does not exceed 2% and (2) Realized Losses on the Mortgage
Loans to date for such Distribution Date if occurring during the sixth, seventh,
eighth, ninth or tenth year (or any year thereafter) after the Closing Date are
less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the Initial
Certificate Principal Balances of the Class B Certificates or (b) (1) the
aggregate outstanding principal balance of the Mortgage Loans Delinquent 60 days
or more (including Mortgage Loans in foreclosure and REO Property) averaged over
the last six months, as a percentage of the aggregate outstanding principal
balance of all Mortgage Loans as of such Distribution Date, does not exceed 4%
and (2) Realized Losses on the Mortgage Loans to date for such Distribution Date
if occurring during the sixth, seventh, eighth, ninth or tenth year (or any year
thereafter) after the Closing Date are less than 10%, 15%, 20%, 25% or 30%,
respectively, of the sum of the Initial Certificate Principal Balances of the
Class B Certificates and (ii) that for any Distribution Date on which the Senior
Percentage is greater than the Original Senior Percentage, the Senior Prepayment
Percentage for such Distribution Date shall be 100%. Notwithstanding the
foregoing, upon the reduction of the aggregate Certificate Principal Balance of
the Senior Certificates to zero, the Senior Prepayment Percentage will equal 0%.

         "Senior Principal Distribution Amount": As to any Distribution Date,
the lesser of (a) the balance of the Available Distribution Amount remaining
after the distribution of all amounts required to be distributed pursuant to
Section 4.01(c)(i) and (b) the sum of the following:

                  (A) the Senior Percentage for such Distribution Date times the
         sum of the following:

                           (1) the principal portion of each Monthly Payment due
                  during the related Due Period on each Outstanding Mortgage
                  Loan whether or not received on or prior to the related
                  Determination Date, minus the principal portion of any Debt
                  Service

                                       32

<PAGE>

                  Reduction, which together with other Bankruptcy Losses exceeds
                  the Bankruptcy Amount;

                           (2) the Stated Principal Balance of any Mortgage Loan
                  repurchased during the related Prepayment Period pursuant to
                  Section 2.02, 2.03, 3.15 or 3.16; and

                           (3) the principal portion of all other unscheduled
                  collections (other than Principal Prepayments in Full and
                  Curtailments and amounts received in connection with a Cash
                  Liquidation or REO Disposition of a Mortgage Loan, including
                  without limitation Insurance Proceeds, Liquidation Proceeds
                  and REO Proceeds) received during the related Prepayment
                  Period to the extent applied by the Master Servicer as
                  recoveries of principal of the related Mortgage Loan pursuant
                  to Section 3.16;

                  (B) with respect to each Mortgage Loan for which a Cash
         Liquidation or a REO Disposition occurred during the related Prepayment
         Period and did not result in any Excess Special Hazard Losses, Excess
         Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses, an
         amount equal to the lesser of (a) the Senior Percentage for such
         Distribution Date times the Stated Principal Balance of such Mortgage
         Loan and (b) the Senior Prepayment Percentage for such Distribution
         Date times the related unscheduled collections (including without
         limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds)
         to the extent applied by the Master Servicer as recoveries of principal
         of the related Mortgage Loan pursuant to Section 3.16;

                  (C) the Senior Prepayment Percentage for such Distribution
         Date times the aggregate of all Principal Prepayments in Full and
         Curtailments received in the related Prepayment Period with respect to
         the Mortgage Loans;

                  (D) any Excess Subordinate Principal Amount for such
         Distribution Date; and

                  (E) any amounts described in clauses (A), (B) or (C) of this
         definition, as determined for any previous Distribution Date, which
         remain unpaid after application of amounts previously distributed
         pursuant to this clause (E) to the extent that such amounts are not
         attributable to Realized Losses which have been allocated to the Class
         B Certificates;

         "Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.

         "Servicer Event of Termination": One or more of the events described in
Section 7.01.

         "Servicing Advances": The reasonable "out-of-pocket" costs and expenses
incurred by the Master Servicer in connection with a default, delinquency or
other unanticipated event by the Master Servicer in the performance of its
servicing obligations, including, but not limited to, (a) reasonable attorneys'
fees and (b) the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, in respect of a particular Mortgage Loan, including any expenses
incurred in relation to any such proceedings that result from the Mortgage Loan
being registered on the MERS System, (iii) the management

                                       33

<PAGE>

(including reasonable fees in connection therewith) and liquidation of any REO
Property, and (iv) the performance of its obligations under Section 3.01,
Section 3.09, Section 3.13, Section 3.14, Section 3.16 and Section 3.23. The
Master Servicer shall not be required to make any Servicing Advance in respect
of a Mortgage Loan or REO Property that, in the good faith business judgment of
the Master Servicer, would not be ultimately recoverable from related Insurance
Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as
provided herein.

         "Servicing Officer": Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose name
and specimen signature appear on a list of servicing officers famished by the
Master Servicer to the Trustee and the Depositor on the Closing Date, as such
list may from time to time be amended.

         "Servicing Fee": With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the applicable Servicing Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month.

         "Servicing Fee Rate": With respect to each Mortgage Loan, a rate equal
to 0.20% per annum.

         "Special Hazard Amount": As of any Distribution Date, an amount equal
to $856,503 minus the sum of (i) the aggregate amount of Special Hazard Losses
allocated solely to one or more specific Classes of Certificates in accordance
with Section 4.02 and (ii) the Adjustment Amount (as defined below) as most
recently calculated. For each anniversary of the Cut-off Date, the Adjustment
Amount shall be equal to the amount, if any, by which the amount calculated in
accordance with the preceding sentence (without giving effect to the deduction
of the Adjustment Amount for such anniversary) exceeds the greater of (A) the
greatest of (i) twice the outstanding principal balance of the Mortgage Loan in
the Trust Fund which has the largest outstanding principal balance on the
Distribution Date immediately preceding such anniversary, (ii) the product of
1.00% multiplied by the outstanding principal balance of all Mortgage Loans on
the Distribution Date immediately preceding such anniversary and (iii) the
aggregate outstanding principal balance (as of the immediately preceding
Distribution Date) of the Mortgage Loans in any single five-digit California zip
code area with the largest amount of Mortgage Loans by aggregate principal
balance as of such anniversary and (B) the greater of (i) the product of 0.50%
multiplied by the outstanding principal balance of all Mortgage Loans on the
Distribution Date immediately preceding such anniversary multiplied by a
fraction, the numerator of which is equal to the aggregate outstanding principal
balance (as of the immediately preceding Distribution Date) of all of the
Mortgage Loans secured by Mortgaged Properties located in the State of
California divided by the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of all of the Mortgage Loans, expressed
as a percentage, and the denominator of which is equal to 20.64% (which
percentage is equal to the percentage of Mortgage Loans initially secured by
Mortgaged Properties located in the State of California) and (ii) the aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of the largest Mortgage Loan secured by a Mortgaged Property located in
the State of California.

         The Special Hazard Amount may be further reduced by the Master Servicer
(including accelerating the manner in which coverage is reduced) provided that
prior to any such reduction, the

                                       34

<PAGE>

Master Servicer shall (i) obtain written confirmation from the Rating Agency
that such reduction shall not reduce the rating assigned to any Class of
Certificates by such Rating Agency below the lower of the then-current rating or
the rating assigned to such Certificates as of the Closing Date by such Rating
Agency and (ii) provide a copy of such written confirmation to the Trustee.

         "Special Hazard Losses": Realized Losses in respect of Special Hazard
Mortgage Loans.

         "Special Hazard Mortgage Loan": A Liquidated Mortgage Loan as to which
the ability to recover the full amount due thereunder was substantially unpaired
by a hazard not insured against under a standard hazard insurance policy.

         "Startup Day": As defined in Section 9.01 (b) hereof.

         "Stated Principal Balance": With respect to any Mortgage Loan and Due
Date, the unpaid principal balance of such Mortgage Loan as of such Due Date, as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period), after giving effect to any previous partial prepayments
and Liquidation Proceeds received and to the payment of principal due on such
Due Date and irrespective of any delinquency in payment by the related
Mortgagor.

         "Stayed Funds": If the Master Servicer is the subject of a proceeding
under the federal Bankruptcy Code and the mailing of a remittance by the Master
Servicer pursuant to this Agreement is prohibited by Section 362 of the federal
Bankruptcy Code, funds which are in the custody of the Master Servicer, a
trustee in bankruptcy or a federal bankruptcy court and should have been the
subject of such remittance absent such prohibition.

         "Stepdown Percentage": With respect to any Distribution Date, the
percentage indicated below:

<TABLE>
<CAPTION>
DISTRIBUTION DATE                                                  STEPDOWN PERCENTAGE
-----------------                                                  -------------------
<S>                                                                <C>
June 2004 through May 2009                                         0%

June 2009 through May 2010                                         30%

June 2010 through May 2011                                         40%

June 2011 through May 2012                                         60%

June 2012 through May 2013                                         80%

June 2013 and thereafter                                           100%
</TABLE>

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

         "Subordinate Percentage": For any Distribution Date, the difference
between 100% and the Senior Percentage for such date.

                                       35

<PAGE>

         "Subordinate Prepayment Percentage": With respect to any Distribution
Date and each Class of Subordinate Certificates, under the applicable
circumstances set forth below, the respective percentages set forth below:

                  (i) For any Distribution Date prior to the Distribution Date
         in June 2009, 0%.

                  (ii) For any Distribution Date for which clause (i) does not
         apply, and on which any Class of Subordinate Certificates are
         outstanding:

                           (a) in the case of the Class of Subordinate
                  Certificates then outstanding with the Highest Priority and
                  each other Class of Subordinate Certificates for which the
                  related Prepayment Distribution Trigger has been satisfied, a
                  fraction, expressed as a percentage, the numerator of which is
                  the Certificate Principal Balance of such Class immediately
                  prior to such date and the denominator of which is the sum of
                  the Certificate Principal Balances immediately prior to such
                  date of (1) the Class of Subordinate Certificates then
                  outstanding with the Highest Priority and (2) all other
                  Classes of Subordinate Certificates for which the respective
                  Prepayment Distribution Triggers have been satisfied; and

                           (b) in the case of each other Class of Subordinate
                  Certificates for which the Prepayment Distribution Triggers
                  have not been satisfied, 0%; and

                  (iii) Notwithstanding the foregoing, if the application of the
         foregoing percentages on any Distribution Date as provided in Section
         4.01(c) of this Agreement (determined without regard to the proviso to
         the definition of "Subordinate Principal Distribution Amount") would
         result in a distribution in respect of principal of any Class or
         Classes of Subordinate Certificates in an amount greater than the
         remaining Certificate Principal Balance thereof (any such class, a
         "Maturing Class"), then: (a) the Subordinate Prepayment Percentage of
         each Maturing Class shall be reduced to a level that, when applied as
         described above, would exactly reduce the Certificate Principal Balance
         of such Class to zero; (b) the Subordinate Prepayment Percentage of
         each other Class of Subordinate Certificates (any such Class, a
         "Non-Maturing Class") shall be recalculated in accordance with the
         provisions in paragraph (ii) above, as if the Certificate Principal
         Balance of each Maturing Class had been reduced to zero (such
         percentage as recalculated, the "Recalculated Percentage"); (c) the
         total amount of the reductions in the Subordinate Prepayment
         Percentages of the Maturing Class or Classes pursuant to clause (a) of
         this sentence, expressed as an aggregate percentage, shall be allocated
         among the Non-Maturing Classes in proportion to their respective
         Recalculated Percentages (the portion of such aggregate reduction so
         allocated to any Non-Maturing Class, the "Adjustment Percentage"); and
         (d) for purposes of such Distribution Date, the Subordinate Prepayment
         Percentage of each Non-Maturing Class shall be equal to the sum of (1)
         the Subordinate Prepayment Percentage thereof, calculated in accordance
         with the provisions in paragraph (ii) above as if the Certificate
         Principal Balance of each Maturing Class had not been reduced to zero,
         plus (2) the related Adjustment Percentage.

         "Subordinate Principal Distribution Amount": With respect to any
Distribution Date and each Class of Class B Certificates, the sum of the
following:

                                       36

<PAGE>

                  (i) the product of (x) the related Class B Percentage for such
         Class and (y) the aggregate of the following amounts:

                           (1) the principal portion of each Monthly Payment due
                  during the related Due Period on each Outstanding Mortgage
                  Loan, whether or not received on or prior to the related
                  Determination Date minus the principal portion of any Debt
                  Service Reduction, which together with other Bankruptcy Losses
                  exceeds the Bankruptcy Amount;

                           (2) the Stated Principal Balance of any Mortgage Loan
                  repurchased during the related Prepayment Period pursuant to
                  Section 2.02, 2.03, 3.15 or 3.16; and

                           (3) the principal portion of all other unscheduled
                  collections (other than Principal Prepayments in Full and
                  Curtailments and amounts received in connection with a Cash
                  Liquidation or REO Disposition of a Mortgage Loan, including
                  without limitation Insurance Proceeds, Liquidation Proceeds
                  and REO Proceeds) received during the related Prepayment
                  Period to the extent applied by the Master Servicer as
                  recoveries of principal of the related Mortgage Loan pursuant
                  to Section 3.16;

                  (ii) such Class's pro rata share, based on the Certificate
         Principal Balance of each Class of Class B Certificates then
         outstanding, of, with respect to each Mortgage Loan, for which a Cash
         Liquidation or a REO Disposition occurred during the related Prepayment
         Period and did not result in any Excess Special Hazard Losses, Excess
         Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses, an
         amount equal to the related unscheduled collections (including without
         limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds)
         to the extent applied by the Master Servicer as recoveries of principal
         of the related Mortgage Loan pursuant to Section 3.16, to the extent
         such collections are not otherwise distributed to the Senior
         Certificates;

                  (iii) the product of (x) the related Subordinate Prepayment
         Percentage for such Distribution Date and (y) the aggregate of all
         Principal Prepayments in Full and Curtailments on the Mortgage Loans
         received in the related Prepayment Period, to the extent not payable to
         the Senior Certificates; and

                  (iv) if such Class is the Class of Class B Certificates then
         outstanding with the Highest Priority, an amount equal to the Excess
         Subordinate Principal Amount; and

                  (v) any amounts described in clauses (i), (ii) and (iii) as
         determined for any previous Distribution Date, that remain
         undistributed to the extent that such amounts are not attributable to
         Realized Losses which have been allocated to a Class of Subordinate
         Certificates;

provided, however, that such amount shall in no event exceed the outstanding
Certificate Principal Balance of such Class of Certificates immediately prior to
such date.

                                       37

<PAGE>

         "Sub-Servicer": Any Person with which the Master Servicer has entered
into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.

         "Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise acceptable to
the Master Servicer.

         "Sub-Servicing Agreement": The written contract between the Master
Servicer and a Sub- Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02.

         "Substitution Adjustment Amount": As defined in Section 2.03(d) hereof.

         "Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(c) hereof.

         "Tax Returns": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of the Trust in its capacity as a REMIC under the
REMIC Provisions, together with any and all other information reports or returns
that may be required to be famished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provisions of federal, state or local tax laws.

         "Termination Price": As defined in Section 10.01 (a) hereof.

         "Transition Cost: Any documented fees, expenses and allocated costs
reasonably incurred by a successor master servicer or the Trustee in connection
with a transfer of servicing from the Master Servicer to a successor master
servicer, including without limitation, any costs or expenses associated with
the complete transfer of all master servicing data and the completion,
correction or manipulation of such master servicing data as may be required by
the Trustee to correct any errors or insufficiencies in the master servicing
data or otherwise to enable the Trustee to master service the Mortgage Loans
properly and effectively.

         "Trustee Fee": With respect to each Mortgage Loan and for any calendar
month, an amount equal to one month's interest at the applicable Trustee Fee
Rate on the same principal amount on which interest on such Mortgage Loan
accrues for such calendar month. Notwithstanding the foregoing, in no event
shall the aggregate Trustee Fee in a calendar year be less than $7,000.

         "Trustee Fee Rate": With respect to any Mortgage Loan, a rate equal to
0.0125% per annum.

         "Trust Fund": REMIC I and REMIC II.

         "Uncertificated Monthly Interest Distributable Amount": An amount equal
to the interest accrued during the related Interest Accrual Period on the
Uncertificated Principal Balance of each Class of REMIC I Regular Interest at
the then-applicable Uncertificated Pass-Through Rate. The Uncertificated Monthly
Interest Distributable Amount on any Class of REMIC I Regular Interest will be
reduced by the amount of (i) Prepayment Interest Shortfalls (to the extent not
offset by the Master

                                       38

<PAGE>

Servicer with a payment of Compensating Interest as provided in Section 3.24),
(ii) the interest portion (adjusted to the Net Mortgage Rate) of Realized Losses
(including Excess Losses) not allocated solely to one or more specific Classes
of Certificates pursuant to Section 4.02, (iii) the interest portion of Advances
previously made with respect to a Mortgage Loan or REO Property which remained
unreimbursed following the Cash Liquidation or REO Disposition of such Mortgage
Loan or REO Property that were made with respect to delinquencies that were
ultimately determined to be Excess Losses and (iv) any other interest shortfalls
not covered by the subordination provided by the Class B Certificates, including
Relief Act Shortfalls, with all such reductions allocated among all of the REMIC
I Regular Interests in proportion to their respective amounts of Uncertificated
Monthly Interest Distributable Amount payable on such Distribution Date which
would have resulted absent such reductions.

         "Uncertificated Pass-Through Rate": With respect to each REMIC I
Regular Interest and any Distribution Date, a per annum rate equal to the
weighted average of the Net Mortgage Rates on each mortgage loan as of the Due
Date in the related Due Period, weighted on the basis of the respective Stated
Principal Balances of such Mortgage Loans as of the day immediately preceding
such Distribution Date (or, with respect to the initial Distribution Date, at
the close of business on the Cut- off Date).

         "Uncertificated Principal Balance": The principal amount of any REMIC I
Regular Interest outstanding as of any date of determination. The Uncertificated
Principal Balance of each REMIC I Regular Interest initially shall be equal to
the amount set forth in the Preliminary Statement with respect to such REMIC I
Regular Interest, and thereafter shall be reduced by all distributions of
principal made on such REMIC I Regular Interest and shall be further reduced by
Realized Losses allocated thereto. The Uncertificated Principal Balance of each
REMIC I Regular Interest shall never be less than zero.

         "Underwriting Guide": The underwriting guide of the Master Servicer, as
revised from time to time.

         "Uninsured Cause" Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies.

         "United States Person" or "U.S. Person": A citizen or resident of the
United States, a corporation or partnership (including an entity treated as a
corporation or partnership for federal income tax purposes) created or organized
in, or under the laws of, the United States or any state thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations), provided that, for purposes solely of the Class R Certificates, no
partnership or other entity treated as a partnership for United States federal
income tax purposes shall be treated as a United States Person unless all
persons that own an interest in such partnership either directly or through any
entity that is not a corporation for United States federal income tax purposes
are United States Persons, or an estate whose income is subject to United States
federal income tax regardless of its source, or a trust if (i) 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 or (ii) it is a
trust which was in existence on August 20, 1996, and was treated as a United
States person, for federal income tax purposes, on the previous day, and elected
to continue to be so treated.

                                       39

<PAGE>

         "Value": With respect to any Mortgaged Property, the value thereof as
determined by an independent appraisal (or other collateral assessment,
permitted by the Underwriting Guide) made at the time of the origination of the
related Mortgage Loan; except that, with respect to any Mortgage Loan that is a
purchase money mortgage loan, the lesser of (i) the value thereof as determined
by an independent appraisal (or other collateral assessment, permitted by the
Underwriting Guide) made at the time of the origination of such Mortgage Loan,
if any, and (ii) the sales price of the related Mortgaged Property.

         "Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Rights allocated
among Holders of such Certificates outstanding shall be the fraction, expressed
as a percentage, the numerator of which is the aggregate Certificate Principal
Balance of all the Certificates of such Class then outstanding and the
denominator of which is the aggregate Certificate Principal Balance of all the
Certificates then outstanding. 99% of all Voting Rights will be allocated among
all holders of the Certificates (other than the Class R Certificates) in
proportion to their then outstanding Certificate Principal Balances, 0.50% and
0.50% of all Voting Rights will be allocated to the holders of the Class R-I
Certificates and Class R-II Certificates, respectively, in proportion to the
Percentage Interests evidenced by their respective Certificates; provided,
however, that any Certificate registered in the name of the Master Servicer, the
Depositor or the Trustee or any of their respective affiliates shall not be
included in the calculation of Voting Rights.

         "Written Order to Authenticate": A written order by which the Depositor
directs the Trustee to issue the Certificates.

         Section 1.02 ACCOUNTING.

         Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without duplication of
such functions.

                                       40

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

         Section 2.01 CONVEYANCE OF MORTGAGE LOANS.

         The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to the Mortgage Loans identified on the
Mortgage Loan Schedule, the rights of the Depositor under the Mortgage Loan
Purchase Agreement (except Section 3.2 thereof), the interest in the Limited
Purpose Surety Bond transferred to the Trustee pursuant to Section 2.03(e) and
all other assets included or to be included in the Trust Fund. Such assignment
includes all interest and principal received by the Depositor or the Master
Servicer on or with respect to the Mortgage Loans (but excluding any payments of
principal and interest due on or prior to the Cut-off Date). The Depositor
herewith delivers to the Trustee an executed copy of the Mortgage Loan Purchase
Agreement.

         The parties hereto agree that it is not intended that any mortgage loan
be included in the Trust that is (i) a "High-Cost Home Loan" as defined in the
New Jersey Home Ownership Act effective November 27, 2003 or (ii) a "High-Cost
Home Loan" as defined in the New Mexico Home Loan Protection Act effective
January 1, 2004.

         In connection with the transactions contemplated by this Agreement,
Cendant Mortgage Corporation and the Trustee shall enter into an Assignment,
Assumption and Recognition Agreement with MLCC, in the form of Exhibit K hereto,
pursuant to which Cendant Mortgage Corporation shall assign to the Trustee, for
the benefit of the Certificateholders, all of its right, title and interest in
and to the Additional Collateral Servicing Agreement with respect to the
Additional Collateral Mortgage Loans, and the Trustee shall assume all of
Cendant Mortgage Corporation's obligations under the Additional Collateral
Servicing Agreement with respect to the Additional Collateral Mortgage Loans
from and after the date hereof.

         In connection with the transfer and assignment described herein, the
Master Servicer on behalf of the Depositor, shall deliver to, and deposit with,
the Trustee, the following documents or instruments:

         (A) with respect to each Mortgage Loan, other than a Cooperative Loan:

                  (i) the original Mortgage Note endorsed "Pay to the order of
         Citibank, N.A., as Trustee for the registered holders of the CDMC
         Mortgage Pass-Through Certificates, Series 2004-3, without recourse",
         or endorsed "Pay to the order of_____________________ without
         recourse," and signed in the name of the last named endorsee by an
         authorized officer, together with all prior and intervening
         endorsements showing a complete chain of endorsement from the
         originator to the Person so endorsing to the last endorsee;

                                       41

<PAGE>

                  (ii) the original Mortgage, noting the presence of the MIN of
         the Mortgage Loan and language indicating that the Mortgage Loan is a
         MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of recording
         thereon which have been recorded, with evidence of recording thereon or
         a copy of the Mortgage certified by the public recording office in
         which such Mortgage has been recorded;

                  (iii) Unless the Mortgage Loan is registered on the MERS(R)
         System, an original Assignment of the Mortgage (A) executed in the
         following form "Citibank, N.A., as Trustee for the registered holders
         of the CDMC Mortgage Pass-Through Certificates, Series 2004-3", or (B)
         in blank, which assignment appears to be in form and substance
         acceptable for recording;

                  (iv) the original recorded Assignment or Assignments of the
         Mortgage showing a complete chain of assignment from the originator to
         the Person assigning the Mortgage to the Trustee (or to MERS, if the
         Mortgage Loan is registered on the MERS(R) System and noting the
         presence of a MIN) as contemplated by the immediately preceding clause
         (iii), if applicable and only to the extent available to the Depositor
         with evidence of recording thereon;

                  (v) the originals of all assumption, modification,
         consolidation or extension agreements, with evidence of recording
         thereon, if any;

                  (vi) a copy of any guarantee (other than Additional
         Collateral) executed in connection with the Mortgage Note;

                  (vii) the original of any security agreement, chattel mortgage
         or equivalent document executed in connection with the Mortgage;

                  (viii) the original power of attorney, if applicable; and

                  (ix) if such Mortgage Loan is a Buydown Mortgage Loan (as
         shown in the Mortgage Loan Schedule), the original Buydown Agreement or
         a copy thereof; and

         (B) in addition, with respect to each Mortgage Loan that is an
Additional Collateral Mortgage Loan (as indicated on the Mortgage Loan
Schedule):

                  (i) a copy of the related Mortgage 100(sm) Pledge Agreement or
         Parent Power Agreement, as applicable; and

                  (ii) a copy of the related UCC-1, to the extent that MLCC was
         required to deliver such UCC-1 to the Master Servicer, and an original
         form UCC-3, if applicable, to the extent that MLCC was required to
         deliver such UCC-3 to the Master Servicer; or

         (C) with respect to each Mortgage Loan that is a Cooperative Loan (as
indicated on the Mortgage Loan Schedule):

                                       42

<PAGE>

                  (i) the original Mortgage Note endorsed "Pay to the order of
         Citibank, N.A., as Trustee for the registered holders of the CDMC
         Mortgage Pass-Through Certificates, Series 2004-3, without recourse",
         or endorsed "Pay to the order of _____________________ without
         recourse," and signed in the name of the last named endorsee by an
         authorized officer, together with all prior and intervening
         endorsements showing a complete chain of endorsement from the
         originator to the Person so endorsing to the last endorsee;

                  (ii) the original duly executed assignment of Security
         Agreement to the Trustee;

                  (iii) the acknowledgment copy of the original executed Form
         UCC-1 (or certified copy thereof) with respect to the Security
         Agreement, and any required continuation statements;

                  (iv) the acknowledgment copy of the original executed Form
         UCC-3 with respect to the security agreement, indicating the Trustee as
         the assignee of the secured party;

                  (v) the stock certificate representing the Cooperative Assets
         allocated to the cooperative unit, with a stock power in blank
         attached;

                  (vi) the original collateral assignment of the proprietary
         lease by Mortgagor to the originator;

                  (vii) a copy of the recognition agreement;

                  (viii) if applicable and to the extent available, the original
         intervening assignments, including warehousing assignments, if any,
         showing, to the extent available, an unbroken chain of the related
         Mortgage Loan to the Trustee, together with a copy of the related Form
         UCC-3 with evidence of filing thereon; and

                  (ix) the originals of each assumption, modification or
         substitution agreement, if any, relating to the Mortgage Loan;

provided, however, that in lieu of the foregoing, the Depositor may deliver the
following documents, under the circumstances set forth below: (x) in lieu of the
original Mortgage, 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 Mortgage required to be included thereon,
be delivered to recording offices for recording and have not been returned to
the Depositor within 270 days of the Closing Date, the Depositor may deliver a
true copy thereof with an Officer's Certificate certifying that such Mortgage,
assignment to the Trustee or intervening assignment has been delivered to the
appropriate recording office for recording; and (y) in lieu of the Mortgage,
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 or the Master Servicer, 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; 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 a certification to such effect
and shall

                                       43

<PAGE>

deposit all amounts paid in respect of such Mortgage Loans in the Distribution
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 promptly after they are received.

         The Depositor may, in lieu of delivering the original of the documents
set forth in Section 2.01(A), (B) and (C) (other than Section 2.01(A)(i) and
Section 2.01(C)(i)) (or copies thereof as permitted by this Section 2.01) to the
Trustee, deliver such documents to the Master Servicer, and the Master Servicer
shall hold such documents in trust for the use and benefit of all present and
future Certificateholders until such time as is set forth in the next sentence.
Within 60 days following the earlier of (i) the receipt of the original of all
of the documents or instruments set forth in Section 2.01(A), (B) and (C) (other
than Section 2.01(A)(i) and Section 2.01(C)(i)) (or copies thereof as permitted
by such Section) for any Mortgage Loan and (ii) a written request by the Trustee
to deliver those documents with respect to any or all of the Mortgage Loans then
being held by the Master Servicer, the Master Servicer shall deliver a complete
set of such documents to the Trustee.

         The Depositor shall, at its expense, cause the Assignment of the
Mortgage to the Trustee to be recorded not later than 270 days after the Closing
Date, unless (a) such recordation is not required by the Rating Agency or an
Opinion of Counsel has been provided as set forth below in this Section 2.01 or
(b) MERS is identified on the Mortgage or on a properly recorded assignment of
the Mortgage as the mortgagee of record. With respect to the Cooperative Loans,
the Depositor will, promptly after the Closing Date, cause the related financing
statements (if not yet filed) and an assignment thereof from the Depositor to
the Trustee to be filed in the appropriate offices. The Depositor need not cause
to be recorded any assignment in any jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered by the Depositor to the Trustee and
the Rating Agency, the recordation of such assignment is not necessary to
protect the Trustee's interest in the related Mortgage Loan; provided, however,
notwithstanding the delivery of any Opinion of Counsel, each assignment shall be
submitted for recording by the Depositor in the manner described above, at no
expense to the Trust Fund or the Trustee, upon the earliest to occur of: (i)
reasonable direction by the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund, (ii) the
occurrence of a Master Servicer Event of Termination, (iii) the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Depositor, (iv) the
occurrence of a servicing transfer as described in Section 7.02 hereof and (v)
with respect to any one assignment, the occurrence of a bankruptcy, insolvency
or foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Depositor 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 Fund in accordance
with Section 8.05.

         In connection with the assignment of any Mortgage Loan registered on
the MERS(R) System, the Depositor further agrees that it will cause, at the
Depositor's own expense, within 30 Business Days after the Closing Date, the
MERS(R) System to indicate that such Mortgage Loans have been assigned by the
Depositor to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Depositor further agrees that it
will not, and will not permit the Master Servicer to, and the Master Servicer
agrees that it will not,

                                       44

<PAGE>

alter the codes referenced in this paragraph with respect to any Mortgage Loan
during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement.

         If any original Mortgage Note referred to in Section 2.01(A)(i) or
2.01(C)(i) above cannot be located, the obligations of the Depositor to deliver
such documents shall be deemed to be satisfied upon delivery to the Trustee of a
photocopy of such Mortgage Note, if available, with a Lost Note Affidavit. If
any of the original Mortgage Notes for which a Lost Note Affidavit was delivered
to the Trustee is subsequently located, such original Mortgage Note shall be
delivered to the Trustee within three Business Days.

         Section 2.02 ACCEPTANCE OF TRUST FUND BY THE TRUSTEE.

         Subject to the provisions of Section 2.01 and subject to any exceptions
noted on the exception report described in the next paragraph below, the Trustee
acknowledges receipt of the documents referred to in Section 2.01 above and
declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage File, and that it holds or will hold
all such assets and such other assets included in the definition of the "Trust
Fund" and the rights of the Sellers with respect to any Additional Collateral
and the Limited Purpose Surety Bond assigned to the Trustee pursuant to Section
2.03(e) in trust for the exclusive use and benefit of all present and future
Certificateholders.

         The Trustee agrees, for the benefit of the Certificateholders, to
review each Mortgage File on or before the Closing Date and to certify on the
Closing Date in substantially the form attached hereto as Exhibit I-1 that, as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in the
exception report annexed thereto as not being covered by such certification),
(i) all documents constituting part of such Mortgage File required to be
delivered to it pursuant to this Agreement are in its possession, provided that
with respect to the documents described in Section 2.01(A)(v), (vi) and (vii)
and 2.01(C)(ix) to the extent the Trustee has actual knowledge that such
documents exist, (ii) such documents have been reviewed by it and are not torn,
mutilated, defaced or otherwise altered (except if initialed by the obligor) and
relate to such Mortgage Loan, (iii) based on its examination and only as to the
foregoing, the information set forth in the Mortgage Loan Schedule that
corresponds to items (i) through (iii) (except the ZIP Code), (ix) and (xv) of
the definition of "Mortgage Loan Schedule" accurately reflects information set
forth in the Mortgage File. Notwithstanding anything to the contrary in this
Agreement, it is herein acknowledged that, in conducting such review, the
Trustee is under no duty or obligation to inspect, review or examine any such
documents, instruments, certificates or other papers to determine whether they
are genuine, enforceable, or appropriate for the represented purpose or whether
they have actually been recorded or that they are other than what they purport
to be on their face, or to determine whether any Person executing any documents
is authorized to do so or whether any signature is genuine.

         The Trustee agrees, for the benefit of the Certificateholders, to
review each Mortgage File within 60 days following the Closing Date and to
certify in substantially the form attached hereto as Exhibit I-2 that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of

                                       45

<PAGE>

such Mortgage File (other than such documents described in Section 2.01(A)(v))
required to be delivered to it pursuant to this Agreement are in its possession,
provided that with respect to the documents described in Section 2.01(A)(v),
(vi) and (vii) and 2.01(C)(ix) to the extent the Trustee has actual knowledge
that such documents exist, (ii) such documents have been reviewed by it and are
not tom, mutilated, defaced or otherwise altered (except if initialed by the
obligor) and appear regular on their face and relate to such Mortgage Loan,
(iii) based on its examination and only as to the foregoing, the information set
forth in the Mortgage Loan Schedule that corresponds to items (i) through
(iii)(except the ZIP code), (ix) and (xv) of the definition of "Mortgage Loan
Schedule" accurately reflects information set forth in the Mortgage File. It is
herein acknowledged that, in conducting such review, the Trustee is under no
duty or obligation (i) to inspect, review or examine any such documents,
instruments, certificates or other papers to determine whether they are genuine,
enforceable, or appropriate for the represented purpose or whether they have
actually been recorded or that they are other than what they purport to be on
their face, or to determine whether any Person executing any documents is
authorized to do so or whether any signature is genuine.

         Prior to the first anniversary date of this Agreement the Trustee shall
deliver to the Depositor and the Master Servicer a final certification in the
form annexed hereto as Exhibit I-2 evidencing the completeness of the Mortgage
Files, with any applicable exceptions noted thereon, except with respect to the
documents described in Section 2.01(A)(v), (vi) and (vii) and 2.01(C)(ix), to
the extent the Trustee has actual knowledge that such documents exist.

         If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trustee
finds any document or documents constituting a part of a Mortgage File to be
missing or defective in any material respect, at the conclusion of its review
the Trustee shall so notify the Depositor and the Master Servicer. In addition,
upon the discovery by the Depositor, the Master Servicer or the Trustee of a
breach of any of the representations and warranties made by the Sellers in the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties.

         The Trustee shall, at the written request and expense of any
Certificateholder, provide a written report to such Certificateholder of all
Mortgage Files released to the Master Servicer for servicing purposes.

         Section 2.03 REPURCHASE OR SUBSTITUTION OF MORTGAGE LOANS BY THE
                      SELLERS- ASSIGNMENT OF INTEREST IN ADDITIONAL COLLATERAL.

         (a) Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File or of the
breach by a Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, by the Trustee, the Master Servicer or the
Depositor shall promptly notify such Seller and the Trustee, the Master Servicer
and the Depositor of such defect, missing document or breach and request that
such Seller deliver such missing document or cure such defect or breach within
90 days from the date such Seller was notified of such missing document, defect
or breach, and if such Seller does not deliver such missing document or cure
such defect or breach in all

                                       46

<PAGE>

material respects during such period, the Master Servicer (or, in accordance
with Section 3.02(b), the Trustee) shall enforce the obligations of such Seller
under the Mortgage Loan Purchase Agreement to repurchase such Mortgage Loan from
the Trust Fund at the Purchase Price within 90 days after the date on which such
Seller was notified (subject to Section 2.03(d)) of such missing document,
defect or breach, if and to the extent that such Seller is obligated to do so
under the Mortgage Loan Purchase Agreement. If such defect or breach can
ultimately be cured but is not reasonably expected to be cured within the 90-day
period, then the applicable Seller shall have such additional time, if any, as
is reasonable, to cure such defect or breach, provided that the applicable
Seller has commenced curing or correcting such defect or breach and is
diligently pursuing same. The Purchase Price for the repurchased Mortgage Loan
shall be deposited in the Collection Account, within three Business Days of
expiration of the applicable time period referred to above, and the Trustee,
upon receipt of written certification from the Master Servicer of such deposit,
shall release to the applicable Seller the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as such Seller shall furnish to it and as shall be necessary
to vest in such Seller any Mortgage Loan released pursuant hereto, and the
Trustee shall have no further responsibility with regard to such Mortgage File.
In lieu of repurchasing any such Mortgage Loan as provided above, if so provided
in the related Mortgage Loan Purchase Agreement, a Seller may cause such
Mortgage Loan to be removed from the Trust Fund (in which case it shall become a
Defective Mortgage Loan) and substitute one or more Eligible Substitute Mortgage
Loans in the manner and subject to the limitations set forth in Section 2.03(d).
If the breach of representation and warranty that gave rise to the obligation to
repurchase or substitute a Mortgage Loan pursuant to Section 3.2 of the Mortgage
Loan Purchase Agreement was the representation and warranty set forth in clause
(xlvi) of Section 3.1 thereof, then the Master Servicer shall request that
Cendant Mortgage pay to the Trust Fund, concurrently with and in addition to the
remedies provided in the preceding four sentences, an amount equal to any
liability, penalty or expense that was actually incurred and paid out of or on
behalf of the Trust Fund, and that directly resulted from such breach, or if
incurred and paid by the Trust Fund thereafter, concurrently with such payment.
In furtherance of the foregoing, if the Seller that repurchases the Mortgage
Loan is not a member of MERS and the Mortgage is registered on the MERS(R)
System, the Master Servicer, at its own expense and without any right of
reimbursement, shall cause MERS to execute and deliver an assignment of the
Mortgage in recordable form to transfer the Mortgage from MERS to such Seller
and shall cause such Mortgage to be removed from registration on the MERS(R)
System in accordance with MERS' rules and regulations. It is understood and
agreed that the obligation of a Seller to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Depositor, the Master Servicer or
the Trustee on behalf of the Certificateholders.

         (b) Within 90 days of the earlier of discovery by the Master Servicer
or receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.04 which
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the Master Servicer shall cure such breach in all material
respects.

         (c) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a), in the case of a
Seller, must be effected prior to the date which is two years after the Closing
Date.

                                       47

<PAGE>

         As to any Defective Mortgage Loan for which a Seller substitutes a
Eligible Substitute Mortgage Loan or Loans, such substitution shall be effected
by such Seller delivering to the Trustee, for such Eligible Substitute Mortgage
Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee,
and such other documents and agreements, with all necessary endorsements
thereon, as are required by Section 2.01, together with an Officers' Certificate
providing that each such Eligible Substitute Mortgage Loan satisfies the
definition thereof and specifying the Substitution Shortfall Amount (as
described below), if any, in connection with such substitution. The Trustee
shall acknowledge receipt of the original Mortgage Note for such Eligible
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
review such documents in the manner specified in Section 2.02 and deliver to the
Depositor and the Master Servicer, with respect to such Eligible Substitute
Mortgage Loan or Loans, a certification substantially in the form attached
hereto as Exhibit I-1, with any applicable exceptions noted thereon. Within one
year of the date of substitution, the Trustee shall deliver to the Depositor and
the Master Servicer a certification substantially in the form of Exhibit I-2
hereto with respect to such Eligible Substitute Mortgage Loan or Loans, with any
applicable exceptions noted thereon. Monthly Payments due with respect to
Eligible Substitute Mortgage Loans in the month of substitution are not part of
the Trust Fund and will be retained by the related Seller. For the month of
substitution, distributions to Certificateholders will reflect the Monthly
Payment due on such Defective Mortgage Loan on or before the Due Date in the
month of substitution, and the related Seller shall thereafter be entitled to
retain all amounts subsequently received in respect of such Defective Mortgage
Loan. The Depositor shall give or cause to be given written notice to the
Certificateholders that such substitution has taken place, shall amend the
Mortgage Loan Schedule to reflect the removal of such Defective Mortgage Loan
from the terms of this Agreement and the substitution of the Eligible Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, such Eligible Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and, in the case of a
substitution effected by a Seller, the Mortgage Loan Purchase Agreement,
including, in the case of a substitution effected by a Seller, all applicable
representations and warranties thereof included in the Mortgage Loan Purchase
Agreement in each case as of the date of substitution.

         For any month in which a Seller substitutes one or more Eligible
Substitute Mortgage Loans for one or more Defective Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Eligible Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
Defective Mortgage Loans (in each case after application of the principal
portion of the Monthly Payments due in the month of substitution that are to be
distributed to the Certificateholders in the month of substitution). The Master
shall deposit the amount of such shortfall into the Collection Account on the
day of substitution, without any reimbursement therefor.

         For any month in which a Seller substitutes one or more Eligible
Substitute Mortgage Loans for one or more Defective Mortgage Loans, the Master
Servicer will determine the amount (the "Substitution Adjustment Amount"), if
any, by which the aggregate Purchase Price of all such Defective Mortgage Loans
exceeds the aggregate of, as to each such Eligible Substitute Mortgage Loan, the
Stated Principal Balance thereof as of the date of substitution, together with
one month's interest on such Stated Principal Balance at the applicable Net
Mortgage Rate. On the date of such

                                       48

<PAGE>

substitution, the applicable Seller will deliver or cause to be delivered to the
Master Servicer for deposit in the Collection Account an amount equal to the
Substitution Adjustment Amount, if any, and the Trustee, upon receipt of the
related Eligible Substitute Mortgage Loan or Loans and certification by the
Master Servicer of such deposit, shall release to the applicable Seller the
related Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as such Seller shall
deliver to it and as shall be necessary to vest therein any Defective Mortgage
Loan released pursuant hereto.

         In addition, the applicable Seller shall obtain at its own expense and
deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on the Trust Fund,
including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code, or (b) any REMIC to fail
to qualify as a REMIC at any time that any Certificate is outstanding.

         (d) Upon discovery by the Depositor, a Seller, the Master Servicer or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall within two Business Days give written notice thereof to the other
parties. In connection therewith, the related Seller shall repurchase or,
subject to the limitations set forth in Section 2.03(c), substitute one or more
Eligible Substitute Mortgage Loans for the affected Mortgage Loan within 60 days
of the earlier of discovery or receipt of such notice with respect to such
affected Mortgage Loan. Such repurchase or substitution shall be made by the
related Seller, as the case may be, if the affected Mortgage Loan's status as a
non-qualified mortgage is or results from a breach of any representation,
warranty or covenant made by the related Seller under the Mortgage Loan Purchase
Agreement. Any such repurchase or substitution shall be made in the same manner
as set forth in Sections 2.03(a), if made by the related Seller. The Trustee
shall reconvey to the related Seller the Mortgage Loan to be released pursuant
hereto in the same manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or warranty.

         (e) The Depositor hereby assigns to the Trustee its security interest
in and to any Additional Collateral, its right to receive amounts due or to
become due in respect of any Additional Collateral, all of its rights in each
Additional Collateral Agreement, and its rights as beneficiary under the Limited
Purpose Surety Bond in respect of any Additional Collateral Mortgage Loans. With
respect to any Additional Collateral Mortgage Loan, the Additional Collateral
Servicer shall cause to be filed in the appropriate recording office a Form
UCC-3 giving notice of the assignment of the related security interest to the
Trust Fund and shall thereafter cause the timely filing of all necessary
continuation statements with regard to such financing statements.

         Section 2.04 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER
                      SERVICER.

         The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the Certificateholders, and
to the Depositor, that as of the Closing Date or as of such date specifically
provided herein:

                  (i) The Master Servicer is a corporation duly organized,
         validly existing and in good standing under the laws of the State of
         New Jersey and is duly authorized and qualified

                                       49

<PAGE>

         to transact any and all business contemplated by this Agreement to be
         conducted by the Master Servicer in any state in which a Mortgaged
         Property is located or is otherwise not required under applicable law
         to effect such qualification and, in any event, is in compliance with
         the doing business laws of any such State, to the extent necessary to
         ensure its ability to enforce each Mortgage Loan and to service the
         Mortgage Loans in accordance with the terms of this Agreement;

                  (ii) The Master Servicer has the full corporate power and
         authority to service each Mortgage Loan, and to execute, deliver and
         perform, and to enter into and consummate the transactions contemplated
         by this Agreement and has duly authorized by all necessary corporate
         action on the part of the Master Servicer the execution, delivery and
         performance of this Agreement; and this Agreement, assuming the due
         authorization, execution and delivery thereof by the Depositor and the
         Trustee, constitutes a legal, valid and binding obligation of the
         Master Servicer, enforceable against the Master Servicer in accordance
         with its terms, except to the extent that (a) the enforceability
         thereof may be limited by bankruptcy, insolvency, moratorium,
         receivership and other similar laws relating to creditors' rights
         generally and (b) the remedy of specific performance and injunctive and
         other forms of equitable relief may be subject to the equitable
         defenses and to the discretion of the court before which any proceeding
         therefor may be brought;

                  (iii) The execution and delivery of this Agreement by the
         Master Servicer, the servicing of the Mortgage Loans by the Master
         Servicer hereunder, the consummation of any other of the transactions
         herein contemplated, and the fulfillment of or compliance with the
         terms hereof are in the ordinary course of business of the Master
         Servicer and will not (A) result in a breach of any term or provision
         of the charter or by-laws of the Master Servicer or (B) conflict with,
         result in a breach, violation or acceleration of, or result in a
         default under, the terms of any other material agreement or instrument
         to which the Master Servicer is a party or by which it may be bound, or
         any statute, order or regulation applicable to the Master Servicer of
         any court, regulatory body, administrative agency or governmental body
         having jurisdiction over the Master Servicer; and the Master Servicer
         is not a party to, bound by, or in breach or violation of any indenture
         or other agreement or instrument, or subject to or in violation of any
         statute, order or regulation of any court, regulatory body,
         administrative agency or governmental body having jurisdiction over it,
         which materially and adversely affects or, to the Master Servicer's
         knowledge, would in the future materially and adversely affect, (x) the
         ability of the Master Servicer to perform its obligations under this
         Agreement or (y) the business, operations, financial condition,
         properties or assets of the Master Servicer taken as a whole;

                  (iv) The Master Servicer is an approved seller/servicer for
         Fannie Mae or Freddie Mac in good standing and is a HUD approved
         mortgagee pursuant to Section 203 of the National Housing Act;

                  (v) No litigation is pending against the Master Servicer that
         would materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of the Master Servicer
         to service the Mortgage Loans or to perform any of its other
         obligations hereunder in accordance with the terms hereof;

                                       50

<PAGE>

                  (vi) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Master Servicer of, or compliance by the Master
         Servicer with, this Agreement or the consummation of the transactions
         contemplated by this Agreement, except for such consents, approvals,
         authorizations or orders, if any, that have been obtained prior to the
         Closing Date; and

                  (vii) The Master Servicer is a member of MERS in good
         standing, and will comply in all material respects with the rules and
         procedures of MERS in connection with the servicing of the Mortgage
         Loans that are registered with MERS.

         It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee, the
Depositor and the Certificateholders. Upon discovery by any of the Depositor,
the Master Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Trustee. Subject to Section 7.01, the obligation of the Master Servicer
set forth in Section 2.03(c) to cure breaches shall constitute the sole remedies
against the Master Servicer available to the Certificateholders, the Depositor
or the Trustee on behalf of the Certificateholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.04.

         Section 2.05 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.

         The Depositor represents and warrants to the Trust and the Trustee on
behalf of the Certificateholders as follows:

                  (i) This agreement constitutes a legal, valid and binding
         obligation of the Depositor, enforceable against the Depositor in
         accordance with its terms, except as enforceability may be limited by
         applicable bankruptcy, insolvency, reorganization, moratorium or other
         similar laws now or hereafter in effect affecting the enforcement of
         creditors' rights in general and except as such enforceability may be
         limited by general principles of equity (whether considered in a
         proceeding at law or in equity);

                  (ii) Immediately prior to the sale and assignment by the
         Depositor to the Trustee on behalf of the Trust of each Mortgage Loan,
         the Depositor had good and marketable title to each Mortgage Loan
         (insofar as such title was conveyed to it by a Seller, as set forth in
         the Mortgage Loan Purchase Agreement) subject to no prior lien, claim,
         participation interest, mortgage, security interest, pledge, charge or
         other encumbrance or other interest of any nature;

                  (iii) As of the Closing Date, the Depositor has transferred
         all right, title and interest in the Mortgage Loans to the Trustee on
         behalf of the Trust;

                  (iv) The Depositor has not transferred the Mortgage Loans to
         the Trustee on behalf of the Trust with any intent to hinder, delay or
         defraud any of its creditors;

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                  (v) The Depositor has been duly formed and is validly existing
         as a limited liability company in good standing under the laws of
         Delaware, with full corporate power and authority to own its assets and
         conduct its business as presently being conducted;

                  (vi) The Depositor is not in violation of its certificate of
         formation or limited liability company agreement or in default in the
         performance or observance of any material obligation, agreement,
         covenant or condition contained in any contract, indenture, mortgage,
         loan agreement, note, lease or other instrument to which the Depositor
         is a party or by which it or its properties may be bound, which default
         might result in any material adverse changes in the financial
         condition, earnings, affairs or business of the Depositor or which
         might materially and adversely affect the properties or assets, taken
         as a whole, of the Depositor;

                  (vii) The execution, delivery and performance of this
         Agreement by the Depositor, and the consummation of the transactions
         contemplated thereby, do not and will not result in a material breach
         or violation of any of the terms or provisions of, or, to the knowledge
         of the Depositor, constitute a default under, any indenture, mortgage,
         deed of trust, loan agreement or other agreement or instrument to which
         the Depositor is a party or by which the Depositor is bound or to which
         any of the property or assets of the Depositor is subject, nor will
         such actions result in any violation of the provisions of the
         certificate of formation or limited liability company agreement of the
         Depositor or, to the best of the Depositor's knowledge without
         independent investigation, any statute or any order, rule or regulation
         of any court or governmental agency or body having jurisdiction over
         the Depositor or any of its properties or assets (except for such
         conflicts, breaches, violations and defaults as would not have a
         material adverse effect on the ability of the Depositor to perform its
         obligations under this Agreement);

                  (viii) To the best of the Depositor's knowledge without any
         independent investigation, no consent, approval, authorization, order,
         registration or qualification of or with any court or governmental
         agency or body of the United States or any other jurisdiction is
         required for the issuance of the Certificates, or the consummation by
         the Depositor of the other transactions contemplated by this Agreement,
         except such consents, approvals, authorizations, registrations or
         qualifications as (a) may be required under State securities or Blue
         Sky laws, (b) have been previously obtained or (c) the failure of which
         to obtain would not have a material adverse effect on the performance
         by the Depositor of its obligations under, or the validity or
         enforceability of, this Agreement; and

                  (ix) There are no actions, proceedings or investigations
         pending before or, to the Depositor's knowledge, threatened by any
         court, administrative agency or other tribunal to which the Depositor
         is a party or of which any of its properties is the subject: (a) which
         if determined adversely to the Depositor would have a material adverse
         effect on the business, results of operations or financial condition of
         the Depositor; (b) asserting the invalidity of this Agreement or the
         Certificates; (c) seeking to prevent the issuance of the Certificates
         or the consummation by the Depositor of any of the transactions
         contemplated by this Agreement, as the case may be; (d) which might
         materially and adversely affect the performance by the Depositor of its
         obligations under, or the validity or enforceability of, this
         Agreement.

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         Section 2.06 PURPOSE AND POWERS OF THE TRUST.

         The purpose of the trust, as created hereunder, is to engage in the
following activities:

                  (i) to issue the Certificates to or at the direction of the
         Depositor in exchange for the Mortgage Loans;

                  (ii) to perform the activities of the trust that are expressly
         set forth in this Agreement;

                  (iii) to engage in those activities that are reasonably
         necessary, suitable or convenient to accomplish the foregoing or are
         incidental thereto or connected therewith; and

                  (iv) subject to compliance with this Agreement, to engage in
         such other activities as may be required in connection with
         conservation of the Trust Fund and the making of distributions to the
         Certificateholders.

         The trust is hereby authorized to engage in the foregoing activities.

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                                   ARTICLE III

                 ADMINISTRATION AND SERVICING OF THE TRUST FUND

         Section 3.01 MASTER SERVICER TO ACT AS MASTER SERVICER.

         The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and in the best interests of and for the benefit of the
Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of prudent mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:

                  (i) any relationship that the Master Servicer, any
         Sub-Servicer or any Affiliate of the Master Servicer or any
         Sub-Servicer may have with the related Mortgagor;

                  (ii) the ownership of any Certificate by the Master Servicer
         or any Affiliate of the Master Servicer;

                  (iii) the Master Servicer's obligation to make Advances or
         Servicing Advances; or

                  (iv) the Master Servicer's or any Sub-Servicer's right to
         receive compensation for its services hereunder or with respect to any
         particular transaction.

To the extent consistent with the foregoing, the Master Servicer shall also seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes it
appropriate in its best judgment in accordance with the servicing standards set
forth above, to execute and deliver, on behalf of the Certificateholders and the
Trustee, and upon notice to the Trustee, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The Master Servicer shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Master Servicer shall also comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under each Primary
Insurance Policy and any standard hazard insurance policy. Subject to Section
3.17, the Trustee shall execute, at the written request of the Master Servicer,
and furnish to the Master

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<PAGE>

Servicer and any Sub-Servicer such documents as are necessary or appropriate to
enable the Master Servicer or any Sub-Servicer to carry out their servicing and
administrative duties hereunder, and the Trustee hereby grants to the Master
Servicer a power of attorney to carry out such duties. The Trustee shall not be
liable for the actions of the Master Servicer or any Sub-Servicers under such
powers of attorney.

         In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the timely payment of taxes and assessments on the
Mortgaged Properties, which advances shall be Servicing Advances reimbursable in
the first instance from related collections from the Mortgagors pursuant to
Section 3.09, and further as provided in Section 3.11. Any cost incurred by the
Master Servicer or by Sub- Servicers in effecting the timely payment of taxes
and assessments on a Mortgaged Property shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.

         The Master Servicer further is authorized and empowered by the Trustee,
on behalf of the Certificateholders and the Trustee, in its own name or in the
name of the Sub-Servicer, when the Master Servicer or the Sub-Servicer, as the
case may be, believes it is appropriate in its best judgment to register any
Mortgage Loan on the MERS(R) System, or cause the removal from the registration
of any Mortgage Loan on the MERS(R) System, to execute and deliver, on behalf of
the Trustee and the Certificateholders or any of them, any and all instruments
of assignment and other comparable instruments with respect to such assignment
or re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns. Any expenses incurred in connection with
the actions described in the preceding sentence shall be borne by the Master
Servicer in accordance with Section 3.18, with no right of reimbursement;
provided, that if, as a result of MERS discontinuing or becoming unable to
continue operations in connection with the MERS System, it becomes necessary to
remove any Mortgage Loan from registration on the MERS System and to arrange for
the assignment of the related Mortgages to the Trustee, then any related
expenses shall be reimbursable to the Master Servicer.

         Notwithstanding anything in this Agreement to the contrary, the Master
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.06) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Loan Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or final, temporary or proposed Treasury regulations promulgated thereunder)
and (B) cause either the Trust Fund to fail to qualify as a REMIC under the Code
or the imposition of any tax on "prohibited transactions" or "contributions
after the startup date" under the REMIC Provisions.

         Notwithstanding any other provision of this Agreement or the Additional
Collateral Servicing Agreement to the contrary, except as provided below, the
Master Servicer shall have no duty or obligation to service and administer the
Additional Collateral and the Master Servicer shall not be

                                       55

<PAGE>

deemed to be the Additional Collateral Servicer, unless and until MLCC's
obligations to administer the Additional Collateral under the Additional
Collateral Servicing Agreement have been terminated with respect to the
Additional Collateral Mortgage Loans, in which case, the Master Servicer shall
be bound to service and administer the Additional Collateral and the Limited
Purpose Surety Bond in accordance with the provisions of this Agreement and the
related Additional Collateral Agreements from the date of such termination. The
Trustee, as assignee of the Additional Collateral Servicing Agreement, shall
enforce the obligations of MLCC to service and administer the Additional
Collateral as provided in the Additional Collateral Servicing Agreement, and
shall take appropriate action thereunder if MLCC fails to substantially comply
with its obligations to administer the Additional Collateral. In the event the
Trustee receives an indemnification payment from MLCC under Section 3 of the
Additional Collateral Servicing Agreement that is attributable to losses
resulting from MLCC's failure to administer the Additional Collateral in
accordance with the terms of the Additional Collateral Servicing Agreement in
connection with Additional Collateral Mortgage Loans, the Trustee shall deposit
such amount in the Collection Account.

         The Master Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Master
Servicer from the responsibilities or liabilities arising under this Agreement.

         Section 3.02 SUB-SERVICING AGREEMENTS BETWEEN THE MASTER SERVICER AND
                      SUB-SERVICERS.

         (a) The Master Servicer may enter into Sub-Servicing Agreements
(provided that such agreements would not result in a withdrawal or a downgrading
by any Rating Agency of the rating on any Class of Certificates) with
Sub-Servicers, for the servicing and administration of the Mortgage Loans.
Notwithstanding any other provision of this Agreement, the Master Servicer shall
not be precluded from selling all or part of the Servicing Fee relating to any
Mortgage Loans to any Sub-Servicer, provided that with respect to any Mortgage
Loan as to which the Master Servicer sells all or a part of the related
Servicing Fee, the Master Servicer shall retain full responsibility under this
Agreement for the servicing activities relating to such Mortgage Loan.

         Each Sub-Servicer shall be (i) authorized to transact business in the
state or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub- Servicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution the deposit accounts of which
are insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved mortgage
servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer will examine each Sub-Servicing Agreement and will be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement will
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least

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<PAGE>

66% of the Voting Rights from the provisions set forth in Section 3.08 relating
to insurance or priority requirements of Sub-Servicing Accounts, or credits and
charges to the Sub-Servicing Accounts or the timing and amount of remittances by
the Sub-Servicers to the Master Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The Master Servicer
shall deliver to the Trustee copies of all Sub-Servicing Agreements, and any
amendments or modifications thereof, promptly upon the Master Servicer's
execution and delivery of such instruments.

         (b) As part of its servicing activities hereunder, the Master Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee and the Certificateholders, shall enforce the obligations
of each Sub-Servicer under the related Sub-Servicing Agreement and of each
Seller under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub- Servicing Agreement, or to purchase a Mortgage Loan on
account of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-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, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement, to
the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans, or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Enforcement of the obligations under the Mortgage Loan Purchase Agreement
against the Sellers shall be effected by the Master Servicer, in accordance with
the foregoing provisions of this paragraph.

         Section 3.03 SUCCESSOR SUB-SERVICERS.

         The Master Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any Sub Servicer, all
servicing obligations of such Sub-Servicer shall be assumed simultaneously by
the Master Servicer without any act or deed on the part of such Sub-Servicer or
the Master Servicer, and the Master Servicer either shall service directly the
related Mortgage Loans or shall enter into a Sub- Servicing Agreement with a
successor Sub-Servicer which qualifies under Section 3.02.

         Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by the Trustee without fee, in
accordance with the terms of this Agreement, in the event that the Master
Servicer shall, for any reason, no longer be the Master Servicer (including
termination due to a Master Servicer Event of Termination).

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         Section 3.04 LIABILITY OF THE MASTER SERVICER.

         Notwithstanding any Sub-Servicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Sub-Servicer for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.

         Section 3.05 NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICERS AND
                      TRUSTEE OR CERTIFICATEHOLDERS.

         Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the Trustee and Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.

         Section 3.06 ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENTS BY
                      TRUSTEE.

         In the event the Master Servicer shall for any reason no longer be the
master servicer (including by reason of the occurrence of a Master Servicer
Event of Termination), the Trustee or its designee or the successor master
servicer as appointed pursuant to Section 7.02 herein, shall thereupon assume
all of the rights and obligations of the Master Servicer under each
Sub-Servicing Agreement that the Master Servicer may have entered into, unless
the Trustee elects to terminate any Sub-Servicing Agreement in accordance with
its terms as provided in Section 3.03. Upon such assumption, the Trustee, its
designee or the successor servicer for the Trustee appointed pursuant to Section
7.02 shall be deemed, subject to Section 3.03, to have assumed all of the Master
Servicer's interest therein and to have replaced the Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the Master
Servicer shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement and (ii) none of the Trustee, its designee or any
successor master servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.

         The Master Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party.

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         Section 3.07 COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS.

         The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any related Primary Insurance Policy and any other
applicable insurance policies, follow such collection procedures as it would
follow with respect to mortgage loans comparable to the Mortgage Loans and held
for its own account. Consistent with the foregoing, the Master Servicer may in
its discretion (i) waive any late payment charge or, if applicable, penalty
interest, only upon determining that the coverage of such Mortgage Loan by the
related Primary Insurance Policy, if any, will not be affected, or (ii) extend
the due dates for Monthly Payments due on a Mortgage Note for a period of not
greater than 180 days; provided that any extension pursuant to clause (ii) above
shall not affect the amortization schedule of any Mortgage Loan for purposes of
any computation hereunder, except as provided below. In the event of any such
arrangement pursuant to clause (ii) above, the Master Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.06
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Master Servicer, such default is reasonably foreseeable, the Master
Servicer, consistent with the standards set forth in Section 3.01, may also,
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Loan Rate, forgive the payment of principal or interest or
extend the final maturity date of such Mortgage Loan), accept payment from the
related Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan (such payment, a "Short Pay-off") or consent
to the postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor.

         Section 3.08 SUB-SERVICING ACCOUNTS.

         In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Sub-Servicer's receipt thereof, all proceeds of Mortgage Loans received by
the Sub- Servicer less its servicing compensation to the extent permitted by the
Sub-Servicing Agreement, and shall thereafter deposit such amounts in the
Sub-Servicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Sub-Servicer shall thereafter
deposit such proceeds in the Collection Account or remit such proceeds to the
Master Servicer for deposit in the Collection Account not later than two
Business Days after the deposit of such amounts in the Sub-Servicing Account.
For purposes of this Agreement, the Master Servicer shall be deemed to have
received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.

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         Section 3.09 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
                      SERVICING ACCOUNTS.

         The Master Servicer shall establish and maintain one or more accounts
(the "Servicing Accounts"), into which all collections from the Mortgagors (or
related advances from Sub-Servicers) for the payment of ground rents, taxes,
assessments, fire and hazard insurance premiums, Primary Insurance Policy
premiums, water charges, sewer rents and comparable items for the account of the
Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Master Servicer shall deposit in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Master Servicer's receipt thereof, all
Escrow Payments collected on account of the Mortgage Loans and shall thereafter
deposit such Escrow Payments in the Servicing Accounts, in no event more than
two Business Days after the deposit of such funds in the clearing account, for
the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from a Servicing Account may be
made only to (i) effect payment of Escrow Payments; (ii) reimburse the Master
Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing
Agreement) out of related collections for any advances made pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.14 (with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined to
be overages; (iv) make Permitted Investments as provided in Section 3.12; (v)
pay interest, to the Master Servicer or to the Mortgagor if required and as
described below, on balances in the Servicing Account; (vi) clear and terminate
the Servicing Account at the termination of the Master Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article IX; or (vii) recover amounts deposited in error. As part
of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in Servicing Accounts, to the extent required by
law and, to the extent that interest earned on funds in the Servicing Accounts
is insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Master Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The
Master Servicer assumes full responsibility for the payment of all such bills
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments. The Master
Servicer shall be entitled to retain any interest paid on funds deposited in the
Servicing Account to effect Escrow Payments other than interest on escrowed
funds required by law to be paid to the Mortgagor.

         Section 3.10 COLLECTION ACCOUNT AND DISTRIBUTION ACCOUNT.

         (a) On behalf of the Trust Fund, the Master Servicer shall establish
and maintain one or more accounts (such account or accounts, the "Collection
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account, as and

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when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:

                  (i) all payments on account of principal, including Principal
         Prepayments, on the Mortgage Loans;

                  (ii) all payments on account of interest (net of the related
         Servicing Fee) on each Mortgage Loan;

                  (iii) all Insurance Proceeds and Liquidation Proceeds (other
         than proceeds collected in respect of any particular REO Property and
         amounts paid by the Master Servicer in connection with a purchase of
         Mortgage Loans and REO Properties pursuant to Section 9.01);

                  (iv) any amounts required to be deposited pursuant to Section
         3.12 in connection with any losses realized on Permitted Investments
         with respect to funds held in the Collection Account;

                  (v) any amounts required to be deposited by the Master
         Servicer pursuant to the second paragraph of Section 3.14(a) in respect
         of any blanket policy deductibles;

                  (vi) all proceeds of any Mortgage Loan repurchased or
         purchased in accordance with Section 2.03 or Section 9.01;

                  (vii) all amounts required to be deposited in connection with
         shortfalls in principal amount of Eligible Substitute Mortgage Loans
         pursuant to Section 2.03;

                  (viii) any amounts required to be transferred from any Buydown
         Account pursuant to Section 3.25; and

                  (ix) any (x) amounts realized by MLCC or (y) Required Surety
         Payments received by the Trustee or the Master Servicer in respect of
         any Additional Collateral.

For purposes of the immediately preceding sentence, the Cut-off Date with
respect to any Eligible Substitute Mortgage Loan shall be deemed to be the date
of substitution.

         The foregoing requirements for deposit in the Collection Accounts shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges or
assumption fees need not be deposited by the Master Servicer in the Collection
Account and shall be retained by the Master Servicer as additional servicing
compensation. In the event the Master Servicer shall deposit in the Collection
Account any amount not required to be deposited therein, it may at any time
withdraw such amount from the Collection Account, any provision herein to the
contrary notwithstanding.

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         (b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 5:00 p.m.
New York time on the Master Servicer Remittance Date, that portion of the
Available Distribution Amount for the related Distribution Date then on deposit
in the Collection Account.

         (c) Funds in the Collection Account and the Distribution Account may be
invested in Permitted Investments in accordance with the provisions set forth in
Section 3.12. The Master Servicer shall give notice to the Trustee and the
Depositor of the location of the Collection Account maintained by it when
established and prior to any change thereof. The Trustee shall give notice to
the Master Servicer and the Depositor of the location of the Distribution
Account when established and prior to any change thereof.

         (d) Funds held in the Collection Account at any time may be delivered
by the Master Servicer to the Trustee for deposit in an account (which may be
the Distribution Account and must satisfy the standards for the Distribution
Account as set forth in the definition thereof) and for all purposes of this
Agreement shall be deemed to be a part of the Collection Account; provided,
however, that the Trustee shall have the sole authority to withdraw any funds
held pursuant to this subsection (d). In the event the Master Servicer shall
deliver to the Trustee for deposit in the Distribution Account any amount not
required to be deposited therein, it may at any time request that the Trustee
withdraw such amount from the Distribution Account and remit to it any such
amount, any provision herein to the contrary notwithstanding. In addition, the
Master Servicer shall deliver to the Trustee from time to time for deposit, and
upon written notification from the Master Servicer, the Trustee shall so
deposit, in the Distribution Account:

                  (i) any Advances, as required pursuant to Section 4.06;

                  (ii) any amounts required to be deposited pursuant to Section
         3.23(d) or (f) in connection with any REO Property;

                  (iii) any amounts to be paid by the Master Servicer in
         connection with a purchase of Mortgage Loans and REO Properties
         pursuant to Section 9.01;

                  (iv) any amounts required to be deposited pursuant to Section
         3.24 in connection with any Prepayment Interest Shortfalls; and

                  (v) any Stayed Funds, as soon as permitted by the federal
         bankruptcy court having jurisdiction in such matters.

         (e) Promptly upon receipt of any Stayed Funds, whether from the Master
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other source,
the Trustee shall deposit such funds in the Distribution Account.

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         Section 3.11 WITHDRAWALS FROM THE COLLECTION ACCOUNT AND DISTRIBUTION
                      ACCOUNT.

         (a) The Master Servicer shall, from time to time, make withdrawals from
the Collection Account for any of the following purposes or as described in
Section 4.06:

                  (i) to remit to the Trustee for deposit in the Distribution
         Account the amounts required to be so remitted pursuant to Section
         3.10(b) or permitted to be so remitted pursuant to the first sentence
         of Section 3.10(d);

                  (ii) subject to Section 3.16(d), to reimburse the Master
         Servicer for Advances;

                  (iii) subject to Section 3.16(d), to pay the Master Servicer
         or any Sub-Servicer any unpaid Servicing Fees and reimburse any
         unreimbursed Servicing Advances with respect to each Mortgage Loan, but
         only to the extent of any Liquidation Proceeds, Insurance Proceeds or
         other amounts as may be collected by the Master Servicer;

                  (iv) to pay to the Master Servicer as servicing compensation
         (in addition to the Servicing Fee) on the Master Servicer Remittance
         Date any interest or investment income earned on funds deposited in the
         Collection Account, any Foreclosure Profits and any prepayment
         penalties or premiums relating to any Principal Prepayments; provided,
         however, that no such amounts shall be payable as servicing
         compensation to the extent they relate to a Mortgage Loan with respect
         to which a default, breach, violation or event of acceleration exists
         or would exist but for the lapse of time, the giving of notice, or
         both;

                  (v) to pay to the Master Servicer, the Depositor or a Seller,
         as the case may be, with respect to each Mortgage Loan that has
         previously been purchased or replaced pursuant to Section 2.03 or
         Section 3.16(c) all amounts received thereon subsequent to the date of
         purchase or substitution, as the case may be;

                  (vi) to reimburse the Master Servicer for any Advance
         previously made which the Master Servicer has determined to be a
         Nonrecoverable Advance in accordance with the provisions of Section
         4.06;

                  (vii) to reimburse the Master Servicer or the Depositor for
         expenses incurred by or reimbursable to the Master Servicer or the
         Depositor, as the case may be, pursuant to Section 6.03;

                  (viii) to reimburse the Master Servicer or the Trustee, as the
         case may be, for expenses reasonably incurred in respect of the breach
         or defect giving rise to the purchase obligation under Section 2.03 or
         Section 2.04 of this Agreement that were included in the Purchase Price
         of the Mortgage Loan, including any expenses arising out of the
         enforcement of the purchase obligation;

                  (ix) to pay, or to reimburse the Master Servicer for advances
         in respect of, expenses incurred in connection with any Mortgage Loan
         pursuant to Section 3.16(b); and

                  (x) to clear and terminate the Collection Account pursuant to
         Section 10.01;

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                  (xi) to reimburse the Master Servicer for amounts deposited in
         error.

         The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and (ix) above.
The Master Servicer shall provide written notification to the Trustee, on or
prior to the next succeeding Master Servicer Remittance Date, upon making any
withdrawals from the Collection Account pursuant to subclause (vii) above.

         (b) The Trustee shall, from time to time, make withdrawals from the
Distribution Account, for any of the following purposes, without priority:

                  (i) to make distributions to Certificateholders in accordance
with Section 4.01;

                  (ii) to pay to itself amounts to which it is entitled pursuant
         to Section 8.05;

                  (iii) to pay itself any interest income earned on funds
         deposited in the Distribution Account pursuant to Section 3.12(c);

                  (iv) to reimburse itself pursuant to Section 7.02 and 7.01(b);

                  (v) to pay any amounts in respect of taxes pursuant to
         10.01(g)(iii); and

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

         Section 3.12 INVESTMENT OF FUNDS IN THE COLLECTION ACCOUNT, SERVICING
                      ACCOUNTS AND THE DISTRIBUTION ACCOUNT.

         (a) The Master Servicer may direct any depository institution
maintaining the Collection Account or Servicing Accounts (for purposes of this
Section 3.12, an "Investment Account'), and the Trustee, in its individual
capacity, may direct any depository institution maintaining the Distribution
Account (for purposes of this Section 3.12, also an "Investment Account'), to
invest the funds in such Investment Account in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
(i) no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement,
if a Person other than the Trustee is the obligor thereon, and (ii) no later
than the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if the Trustee is the obligor thereon. All such
Permitted Investments shall be held to maturity, unless payable on demand. Any
investment of funds in an Investment Account shall be made in the name of the
Trustee (in its capacity as such) or in the name of a nominee of the Trustee.
The Trustee shall be entitled to sole possession (except with respect to
investment direction of funds held in the Collection Account or Servicing
Accounts, as applicable, and any income and gain realized thereon) over each
such investment, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the Trustee or its agent, together
with any document of transfer necessary to transfer title to such investment to
the Trustee or its nominee. In the event

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amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Trustee shall:

                  (x)      consistent with any notice required to be given
                           thereunder, demand that payment thereon be made on
                           the last day such Permitted Investment may otherwise
                           mature hereunder in an amount equal to the lesser of
                           (1) all amounts then payable thereunder and (2) the
                           amount required to be withdrawn on such date; and

                  (y)      demand payment of all amounts due thereunder promptly
                           upon determination by a Responsible Officer of the
                           Trustee that such Permitted Investment would not
                           constitute a Permitted Investment in respect of funds
                           thereafter on deposit in the Investment Account.

         (b) All income and gain realized from the investment of funds deposited
in the Collection Account or Servicing Accounts, as applicable, held by or on
behalf of the Master Servicer, shall be for the benefit of the Master Servicer
and shall be subject to its withdrawal in accordance with Section 3.11. The
Master Servicer shall deposit in the Collection Account or Servicing Accounts,
as applicable, the amount of any loss of principal incurred in respect of any
such Permitted Investment made with funds in such accounts immediately upon
realization of such loss.

         (c) All income and gain realized from the investment of funds deposited
in the Distribution Account held by or on behalf of the Trustee, shall be for
the benefit of the Trustee and shall be subject to its withdrawal at any time.
The Trustee shall deposit in the Distribution Account, the amount of any loss of
principal incurred in respect of any such Permitted Investment made with funds
in such accounts immediately upon realization of such loss.

         (d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the Holders of Certificates representing more than 50% of
the Voting Rights allocated to any Class of Certificates, shall take such action
as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.

         Section 3.13 MAINTENANCE OF THE PRIMARY INSURANCE POLICIES; COLLECTIONS
                      THEREUNDER.

         The Master Servicer will maintain or cause the related Sub-Servicer, if
any, to maintain in full force and effect, if required under the Mortgage Loan
Purchase Agreement and to the extent available, a Primary Insurance Policy
conforming in all respects to the description set forth in Section 2(vii) of the
Mortgage Loan Purchase Agreement with respect to each Mortgage Loan so insured
as of the Closing Date (or, in the case of a Eligible Substitute Mortgage Loan,
on the date of substitution). Such coverage will be maintained with respect to
each such Mortgage Loan for so long as it is outstanding, subject to any
applicable laws or until the related Loan-to-Value Ratio is reduced to less than
or equal to 80% based on Mortgagor payments. The Master Servicer shall cause the
premium for each Primary Insurance Policy to be paid on a timely basis and shall
pay such premium out of its own funds if it is not otherwise paid. The Master
Servicer or the related Sub-Servicer, if

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any, will not cancel or refuse to renew any such Primary Insurance Policy in
effect on the Closing Date (or, in the case of a Eligible Substitute Mortgage
Loan, on the date of substitution) that is required to be kept in force under
this Agreement unless a replacement Primary Insurance Policy for such canceled
or non-renewed policy is obtained from and maintained with an insurer.

         The Master Servicer shall not take, or permit any Sub-Servicer to take,
any action which would result in non-coverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of the Master Servicer
or Sub-Servicer, would have been covered thereunder. The Master Servicer will
comply in the performance of this Agreement with all reasonable rules and
requirements of each insurer under each Primary Insurance Policy. In connection
with any assumption and modification agreement or substitution of liability
agreement entered into or to be entered into pursuant to Section 3.15, the
Master Servicer shall promptly notify the insurer under the related Primary
Insurance Policy, if any, of such assumption in accordance with the terms of
such policies and shall take all actions which may be required by such insurer
as a condition to the continuation of coverage under the Primary Insurance
Policy. If any such Primary Insurance Policy is terminated as a result of such
assumption, the Master Servicer or the related Sub-Servicer shall obtain a
replacement Primary Insurance Policy as provided above.

         In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to prepare and present, on behalf of
itself, the Trustee and the Certificateholders, claims to the insurer under any
Primary Insurance Policy in a timely fashion in accordance with the terms of
such policies and, in this regard, to take such action as shall be necessary to
permit recovery under any Primary Insurance Policy respecting a defaulted
Mortgage Loan. Any amounts collected by the Master Servicer under any Primary
Insurance Policy shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.11; and any amounts collected by the Master
Servicer under any Primary Insurance Policy in respect of any REO Property shall
be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.23. In those cases in which a Mortgage Loan is serviced by a
Sub-Servicer, the Sub-Servicer, on behalf of itself, the Trustee, and the
Certificateholders, will present claims to the insurer under any Primary
Insurance Policy and all collections thereunder shall be deposited initially in
the Sub- Servicing Account.

         Section 3.14 MAINTENANCE OF HAZARD INSURANCE AND ERRORS AND OMISSIONS
                      AND FIDELITY COVERAGE.

         (a) The Master Servicer shall cause to be maintained for each Mortgage
Loan fire insurance with extended coverage on the related Mortgaged Property in
an amount which is at least equal to the least of (i) the current principal
balance of such Mortgage Loan, (ii) the amount necessary to fully compensate for
any damage or loss to the improvements that are a part of such property on a
replacement cost basis and (iii) the maximum insurable value of the improvements
which are a part of such Mortgaged Property, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Master Servicer
shall also cause to be maintained fire insurance with extended coverage on each
REO Property in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements which are a part of such property
and (ii) the outstanding principal balance of the related Mortgage Loan at the
time it became an REO Property, plus accrued interest at the Loan Rate and
related Servicing Advances. The Master Servicer will comply in the

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performance of this Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected by the
Master Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, within two Business Days after
receipt thereof, subject to withdrawal pursuant to Section 3.11, if received in
respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.23, if received in respect of an REO Property. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating distributions to Certificateholders, be added to the
unpaid principal balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake, windstorm or other additional insurance is to be required of any
Mortgagor other than pursuant to such applicable laws and regulations as shall
at any time be in force and as shall require such additional insurance. If the
Mortgaged Property or REO Property is at any time in an area identified in the
Federal Register by the Federal Emergency Management Agency as having special
flood hazards, the Master Servicer will cause to be maintained a flood insurance
policy in respect thereof. Such flood insurance shall be in an amount equal to
the lesser of (i) the unpaid principal balance of the related Mortgage Loan and
(ii) the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that the area in
which such Mortgaged Property is located is participating in such program).

         If the Master Servicer shall obtain and maintain a blanket fire
insurance policy with extended coverage insuring against hazard losses on all of
the Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first two sentences of this Section 3.14, it
being understood and agreed that such policy may contain a deductible clause, in
which case the Master Servicer shall, in the event that there shall not have
been maintained on the related Mortgaged Property or REO Property a policy
complying with the first two sentences of this Section 3.14, and there shall
have been one or more losses which would have been covered by such policy,
deposit to the Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Master Servicer agrees to prepare and present, on behalf of itself,
the Trustee and Certificateholders, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.

         (b) The Master Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Fannie Mae or Freddie Mac, unless the Master Servicer has obtained a waiver
of such requirements from Fannie Mae or Freddie Mac. The Master Servicer shall
provide the Trustee (upon the Trustee's reasonable request) with copies of any
such insurance policies and fidelity bond. The Master Servicer shall be deemed
to have complied with this provision if an Affiliate of the Master Servicer has
such errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to

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the Master Servicer. Any such errors and omissions policy and fidelity bond
shall by its terms not be cancelable without thirty days' prior written notice
to the Trustee. The Master Servicer shall also cause each Sub-Servicer to
maintain a policy of insurance covering errors and omissions and a fidelity bond
which would meet such requirements.

         Section 3.15 ENFORCEMENT OF DUE-ON-SALE CLAUSES. ASSUMPTION AGREEMENTS.

         The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause, if any, applicable thereto; provided, however,
that the Master Servicer shall not exercise any such rights if prohibited by law
from doing so or if the exercise of such rights would impair or threaten to
impair any recovery under the related Primary Insurance Policy or Limited
Purpose Surety Bond, if any. If the Master Servicer reasonably believes it is
unable under applicable law to enforce such "due-on-sale" clause, or if any of
the other conditions set forth in the proviso to the preceding sentence apply,
the Master Servicer will enter into an assumption and modification agreement
from or with the person to whom such property has been conveyed or is proposed
to be conveyed, pursuant to which such person becomes liable under the Mortgage
Note and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such person, pursuant to which the
original Mortgagor is released from liability and such person is substituted as
the Mortgagor and becomes liable under the Mortgage Note, provided that no such
substitution shall be effective unless such person satisfies the underwriting
criteria of the Master Servicer and has a credit risk rating at least equal to
that of the original Mortgagor. In connection with any assumption or
substitution, the Master Servicer shall apply such underwriting standards and
follow such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Master Servicer shall not take or enter into any assumption
and modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable Primary Insurance Policy or hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Master Servicer in respect of an assumption or
substitution of liability agreement will be retained by the Master Servicer as
additional servicing compensation. In connection with any such assumption, no
material term of the Mortgage Note (including but not limited to the related
Loan Rate and the amount of the Monthly Payment) may be amended or modified,
except as otherwise required pursuant to the terms thereof. The Master Servicer
shall notify the Trustee that any such substitution or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.

         Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Master Servicer may be restricted by law from preventing,
for any reason whatever. For purposes of this Section 3.15, the term
"assumption" is

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deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.

         Section 3.16 REALIZATION UPON DEFAULTED MORTGAGE LOANS.

         (a) The Master Servicer shall, consistent with the servicing standard
set forth in Section 3.01, foreclose upon or otherwise comparably convert the
ownership of 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 pursuant to Section 3.07. The Master Servicer
shall be responsible for all costs and expenses incurred by it in any such
proceedings; provided, however, that such costs and expenses will be recoverable
as Servicing Advances by the Master Servicer as contemplated in Section 3.11 and
Section 3.23. The foregoing is subject to the provision that, in any case in
which Mortgaged Property shall have suffered damage from an Uninsured Cause, the
Master Servicer shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion that
such restoration will increase the proceeds of liquidation of the related
Mortgage Loan after reimbursement to itself for such expenses.

         (b) Notwithstanding the foregoing provisions of this Section 3.16 or
any other provision of this Agreement, with respect to any Mortgage Loan as to
which the Master Servicer has received actual notice of, or has actual knowledge
of, the presence of any toxic or hazardous substance on the related Mortgaged
Property, the Master Servicer shall not, on behalf of the Trustee, either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property, if, as a result of any such action,
the Trustee, the Trust Fund or the Certificateholders would be considered to
hold title to, to be a "mortgagee-in-possession" of, or to be an "owner" or
"operator" of such Mortgaged Property within the meaning of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended from
time to time, or any comparable law, unless the Master Servicer has also
previously determined, based on its reasonable judgment and a report prepared by
a Person who regularly conducts environmental audits using customary industry
standards, that:

                  (1) such Mortgaged Property is in compliance with applicable
         environmental laws or, if not, that it would be in the best economic
         interest of the Trust Fund to take such actions as are necessary to
         bring the Mortgaged Property into compliance therewith; and

                  (2) there are no circumstances present at such Mortgaged
         Property relating to the use, management or disposal of any hazardous
         substances, hazardous materials, hazardous wastes, or petroleum-based
         materials for which investigation, testing, monitoring, containment,
         clean-up or remediation could be required under any federal, state or
         local law or regulation, or that if any such materials are present for
         which such action could be required, that it would be in the best
         economic interest of the Trust Fund to take such actions with respect
         to the affected Mortgaged Property.

         The cost of the environmental audit report contemplated by this Section
3.23 shall be advanced by the Master Servicer, subject to the Master Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.11(a)(ix), such right of reimbursement being

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prior to the rights of Certificateholders to receive any amount in the
Collection Account received in respect of the affected Mortgage Loan or other
Mortgage Loans.

         If the Master Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(ix), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.

         (c) The Master Servicer may at its option purchase from the Trust Fund
any Mortgage Loan that is 90 days or more Delinquent, which the Master Servicer
determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee prior to purchase), at a price equal to the sum of the outstanding
Stated Principal Balance of such Mortgage Loan and accrued and unpaid interest
thereon at the Loan Rate through the end of the Due Period preceding the last
Distribution Date, less unreimbursed Servicing Advances, Advances and any unpaid
Servicing Fees allocable to such Mortgage Loan. The purchase price for any
Mortgage Loan purchased hereunder shall be deposited in the Collection Account,
and the Trustee, upon receipt of written certification from the Master Servicer
of such deposit, shall release or cause to be released to the Master Servicer
the related Mortgage File and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Master Servicer
shall furnish and as shall be necessary to vest in the Master Servicer title to
any Mortgage Loan released pursuant hereto.

         (d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and Advances, pursuant to Section 3.11(a)(ii) or (a)(iii); second, to
accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; third, as a recovery of principal of the Mortgage Loan;
and fourth, to Foreclosure Profits. If the amount of the recovery so allocated
to interest is less than the full amount of accrued and unpaid interest due on
such Mortgage Loan, the amount of such recovery will be allocated by the Master
Servicer as follows: first, to unpaid Servicing Fees; and second, to the balance
of the interest then due and owing. The portion of the recovery so allocated to
unpaid Servicing Fees shall be reimbursed to the Master Servicer or any
Sub-Servicer pursuant to Section 3.11(a)(iii).

         (e) In addition to the foregoing, the Trustee, as assignee of the
Additional Collateral Servicing Agreement, shall enforce the obligations of the
Additional Collateral Servicer to use its best reasonable efforts to realize
upon any Additional Collateral for such of the Additional Collateral

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Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.11; provided that pursuant to the Additional Collateral
Servicing Agreement, the Additional Collateral Servicer shall not, on behalf of
the Trustee, obtain title to any such Additional Collateral as a result of or in
lieu of the disposition thereof or otherwise; and provided further that (i) the
Additional Collateral Servicer, pursuant to the Additional Collateral Servicing
Agreement, shall not proceed with respect to such Additional Collateral in any
manner that would impair the ability to recover against the related Mortgaged
Property, and (ii) the Master Servicer shall proceed with any acquisition of REO
Property in a manner that preserves the ability to apply the proceeds of such
Additional Collateral against amounts owed under the defaulted Mortgage Loan.
Any proceeds realized from such Additional Collateral (other than amounts to be
released to the Mortgagor or the related guarantor in accordance with procedures
that the Master Servicer would follow in servicing loans held for its own
account, subject to the terms and conditions of the related Mortgage and
Mortgage Note and to the terms and conditions of any security agreement,
guarantee agreement, mortgage or other agreement governing the disposition of
the proceeds of such Additional Collateral) shall be deposited in the
Distribution Account, subject to withdrawal pursuant to Section 3.11; provided,
that such proceeds shall not be so deposited if the Required Surety Payment in
respect of such Additional Collateral Mortgage Loan has been deposited in the
Collection Account (except to the extent of any such proceeds taken into account
in calculating the amount of the Required Surety Payment). Any other payment
received by a Seller in respect of such Additional Collateral shall be deposited
in the Distribution Account subject to withdrawal pursuant to Section 3.11.

         Section 3.17 TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.

         (a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Master Servicer of a notification that payment in full shall be escrowed in
a manner customary for such purposes, the Master Servicer will immediately
notify the Trustee by delivering a certification in duplicate (one of which will
be returned to the Master Servicer with the Mortgage File) in the form of
Exhibit E which shall be signed by a Servicing Officer or in a mutually
agreeable electronic format which will in lieu of a signature be deemed to
originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File.
Upon receipt of such certification and request, the Trustee shall promptly
release the related Mortgage File to the Master Servicer. No expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Collection Account or the Distribution Account.

         (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Insurance Policy or any other insurance policy relating to the
Mortgage Loans, the Trustee shall, upon request of the Master Servicer and
delivery to the Trustee in duplicate (one of which will be returned to the
Master Servicer with the Mortgage File) of a Request for Release in the form of
Exhibit E, which shall be signed by a Servicing Officer or in a mutually
agreeable electronic format which will in lieu of a signature be deemed to
originate from a Servicing Officer release the related Mortgage File to the
Master Servicer, and the Trustee shall, at the direction of the Master Servicer,
and in the form provided by the Master Servicer execute such documents as shall
be necessary to the prosecution of

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any such proceedings. Such Request for Release shall obligate the Master
Servicer to return each and every document previously requested from the
Mortgage File to the Trustee when the need therefor by the Master Servicer no
longer exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Collection
Account or 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 Master
Servicer has delivered to the Trustee 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.
Upon receipt of a certificate of a Servicing Officer stating that such Mortgage
Loan was liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, the Master Servicer shall no longer be obligated to return the
documents released by the Trustee pursuant to the related Request for Release
and a copy of the Request for Release shall be released by the Trustee to the
Master Servicer.

         (c) Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Master Servicer any court pleadings, requests
for trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or
inequity. Each such certification shall include a request that such pleadings or
documents be executed by the Trustee and a statement as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by the Trustee will not invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale.

         Section 3.18 SERVICING COMPENSATION.

         As compensation for the activities of the Master Servicer hereunder,
the Master Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest and Buydown Funds in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii)
and out of amounts derived from the operation and sale of an REO Property to the
extent permitted by Section 3.23. The right to receive the Servicing Fee may not
be transferred in whole or in part except in connection with the transfer of all
of the Master Servicer's responsibilities and obligations under this Agreement.
In the event that Liquidation Proceeds, Insurance Proceeds and proceeds from any
REO Disposition (net of amounts reimbursable therefrom pursuant to Section
3.11(a)(iii)) in respect of a Cash Liquidation or REO Disposition exceed the
unpaid principal balance of such Mortgage Loan plus unpaid interest accrued
thereon (including REO Imputed Interest) at a per annum rate equal to the
related Net Mortgage Rate, the Master Servicer shall be entitled to retain
therefrom and to pay to itself any Foreclosure Profits and any Servicing Fee
considered to be accrued but unpaid.

         Additional servicing compensation in the form of assumption fees, late
payment charges and other similar fees and charges shall be retained by the
Master Servicer (subject to Section 3.24) only

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to the extent such fees or charges are received by the Master Servicer. The
Master Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account, and pursuant to Section 3.23(b) to
withdraw from any REO Account, as additional servicing compensation, interest or
other income earned on deposits therein, subject to Section 3.12 and Section
3.24. The Master Servicer shall be required to pay all expenses incurred by it
in connection with its servicing activities hereunder (including Lender-Funded
PMI Premiums, if any, premiums for the insurance required by Section 3.14, to
the extent such premiums are not paid by the related Mortgagors or by a
Sub-Servicer, servicing compensation of each Sub-Servicer, and to the extent
provided herein in Section 8.05, the fees and expenses of the Trustee) and shall
not be entitled to reimbursement therefor except as specifically provided
herein.

         Section 3.19 REPORTS TO THE TRUSTEE; COLLECTION ACCOUNT STATEMENTS.

         Upon request from the Trustee, the Master Servicer shall forward to the
Trustee and the Depositor a statement prepared by the Master Servicer setting
forth the status of the Collection Account as of the close of business on such
Distribution Date and showing, for the period covered by such statement, the
aggregate amount of deposits into and withdrawals from the Collection Account of
each category of deposit specified in Section 3.10(a) and each category of
withdrawal specified in Section 3.11. Such statement may be in the form of the
then current Fannie Mae Monthly Accounting Report for its Guaranteed Mortgage
Pass-Through Program with appropriate additions and changes, and shall also
include information as to the aggregate of the outstanding principal balances of
all of the Mortgage Loans as of the last day of the calendar month immediately
preceding such Distribution Date. Copies of such statement shall be provided by
the Trustee to any Certificateholder and to any Person identified to the Trustee
as a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Master Servicer to
the Trustee.

         Section 3.20 STATEMENT AS TO COMPLIANCE.

         Not later than the earlier of (a) March 15 of each calendar year (other
than the calendar year during which the Closing Date occurs) or (b) with respect
to any calendar year during which the Depositor's annual report on Form 10-K is
required to filed in accordance with the Exchange Act and the rules and
regulations of the Commission, 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, in each
case, if such day is not a Business Day, the immediately preceding Business
Day), the Master Servicer will deliver to the Trustee and the Depositor an
Officers' Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Master Servicer during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Master Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon the request and at the expense
of the requesting party, provided that such statement is delivered by the Master
Servicer to the Trustee.

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         Section 3.21 INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.

         Not later than the earlier of (a) March 15 of each calendar year (other
than the calendar year during which the Closing Date occurs) or (b) with respect
to any calendar year during which the Depositor's annual report on Form 10-K is
required to filed in accordance with the Exchange Act and the rules and
regulations of the Commission, 15 calendar days before the date on which the
Depositor's annual report on Form 10-K is required to filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, in each
case, if such day is not a Business Day, the immediately preceding Business
Day), the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed fiscal year and (ii) on the basis of an
examination conducted by such firm in accordance with standards established by
the American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub-Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Immediately upon receipt of such report,
the Master Servicer shall furnish a copy of such report to the Trustee and the
Rating Agency.

         Section 3.22 ACCESS TO CERTAIN DOCUMENTATION.

         The Master Servicer shall provide to the Office of Thrift Supervision,
the FDIC, and any other federal or state banking or insurance regulatory
authority that may exercise authority over any Certificateholder, access to the
documentation regarding the Mortgage Loans required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the Master
Servicer designated by it. In addition, access to the documentation regarding
the Mortgage Loans will be provided to any Certificateholder, the Trustee and to
any Person identified to the Master Servicer as a prospective transferee of a
Certificate, upon reasonable request during normal business hours at the offices
of the Master Servicer designated by it at the expense of the Person requesting
such access.

         Section 3.23 TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.

         (a) The deed or certificate of sale of any REO Property shall be taken
in the name of the Trustee, or its nominee, in trust for the benefit of the
Certificateholders. The Master Servicer, on behalf of the Trust Fund, shall
either sell any REO Property within three years after the end of the calendar
year in which the Trust Fund acquires ownership of such REO Property for
purposes of Section 860G(a)(8) of the Code or request from the Internal Revenue
Service, no later than 60 days before the day on which the three-year grace
period would otherwise expire, an extension of the three-year grace period,
unless the Master Servicer shall have delivered to the Trustee and the Depositor
an Opinion of Counsel, addressed to the Trustee and the Depositor, to the effect
that the

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holding by the Trust Fund of such REO Property subsequent to the three-year
grace period after its acquisition will not result in the imposition on the
Trust Fund of taxes on "prohibited transactions" thereof, as defined in Section
860F of the Code, or cause the Trust Fund to fail to qualify as a REMIC under
Federal law at any time that any Certificates are outstanding. The Master
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by the Trust Fund of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.

         (b) The Master Servicer shall segregate and hold all funds collected
and received in connection with the operation of any REO Property separate and
apart from its own funds and general assets and shall establish and maintain
with respect to REO Properties an account held in trust for the Trustee for the
benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.

         (c) The Master Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property as are consistent with the
manner in which the Master Servicer manages and operates similar property owned
by the Master Servicer or any of its Affiliates, all on such terms and for such
period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall deposit,
or cause to be deposited in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the REO Account, in
no event more than two Business Days after the deposit of such funds into the
clearing account, all revenues received by it with respect to an REO Property
and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:

                  (i) all insurance premiums due and payable in respect of such
         REO Property;

                  (ii) all real estate taxes and assessments in respect of such
         REO Property that may result in the imposition of a lien thereon; and

                  (iii) all costs and expenses necessary to maintain such REO
         Property.

To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Master Servicer shall advance
from its own funds such amount as is necessary for such purposes if, but only
if, the Master Servicer would make such advances if the Master Servicer owned
the REO Property and if in the Master Servicer's judgment, the payment of such
amounts will be recoverable from the rental or sale of the REO Property.

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         Notwithstanding the foregoing, neither the Master Servicer nor the
Trustee shall:

                  (i) authorize the Trust Fund to enter into, renew or extend
         any New Lease with respect to any REO Property, if the New Lease by its
         terms will give rise to any income that does not constitute Rents from
         Real Property;

                  (ii) authorize any amount to be received or accrued under any
         New Lease other than amounts that will constitute Rents from Real
         Property;

                  (iii) authorize any construction on any REO Property, other
         than the completion of a building or other improvement thereon, and
         then only if more than ten percent of the construction of such building
         or other improvement was completed before default on the related
         Mortgage Loan became imminent, all within the meaning of Section
         856(e)(4)(B) of the Code; or

                  (iv) authorize any Person to Directly Operate any REO Property
         on any date more than 90 days after its date of acquisition by the
         Trust Fund;

unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee, to the effect that such action will not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code at any time that it is held by the
Trust Fund, in which case the Master Servicer may take such actions as are
specified in such Opinion of Counsel.

         The Master Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:

                  (i) the terms and conditions of any such contract shall not be
         inconsistent herewith;

                  (ii) any such contract shall require, or shall be administered
         to require, that the Independent Contractor pay all costs and expenses
         incurred in connection with the operation and management of such REO
         Property, including those listed above and remit all related revenues
         (net of such costs and expenses) to the Master Servicer as soon as
         practicable, but in no event later than thirty days following the
         receipt thereof by such Independent Contractor;

                  (iii) none of the provisions of this Section 3.23(c) relating
         to any such contract or to actions taken through any such Independent
         Contractor shall be deemed to relieve the Master Servicer of any of its
         duties and obligations to the Trustee on behalf of the
         Certificateholders with respect to the operation and management of any
         such REO Property; and

                  (iv) the Master Servicer shall be obligated with respect
         thereto to the same extent as if it alone were performing all duties
         and obligations in connection with the operation and management of such
         REO Property.

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The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees.

         (d) In addition to the withdrawals permitted under Section 3.23(c), the
Master Servicer may from time to time make withdrawals from the REO Account for
any REO Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in
respect of the related Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect of
such REO Property or the related Mortgage Loan. On the Master Servicer
Remittance Date, the Master Servicer shall withdraw from each REO Account
maintained by it and deposit into the Distribution Account in accordance with
Section 3.10(d)(ii), far distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).

         (e) Subject to the time constraints set forth in Section 3.23(a), and
further subject to obtaining the approval of the insurer under any related
Primary Insurance Policy (if and to the extent that such approvals are necessary
to make claims under such policies in respect of the affected REO Property),
each REO Disposition shall be carried out by the Master Servicer at such price
and upon such terms and conditions as the Master Servicer shall deem necessary
or advisable, as shall be normal and usual in its general servicing activities
for similar properties.

         (f) The proceeds from the REO Disposition, net of any amount required
by law to be remitted to the Mortgagor under the related Mortgage Loan and net
of any payment or reimbursement to the Master Servicer or any Sub-Servicer as
provided above, shall be deposited in the Distribution Account in accordance
with Section 3.10(d)(ii) on the Master Servicer Remittance Date in the month
following the receipt thereof for distribution on the related Distribution Date
in accordance with Section 4.01. Any REO Disposition shall be for cash only
(unless changes in the REMIC Provisions made subsequent to the Startup Day allow
a sale for other consideration).

         (g) The Master Servicer shall file information returns with respect to
the receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.

         Section 3.24 OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF
                      PREPAYMENT INTEREST SHORTFALLS.

         The Master Servicer shall deliver to the Trustee for deposit into the
Distribution Account on or before 5:00 p.m. New York time on the Master Servicer
Remittance Date from its own funds an amount equal to the lesser of (i) the
aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting from Principal Prepayments in Full or Curtailments during the
related

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Prepayment Period and (ii) the portion of its aggregate Servicing Fee which
accrued at a Servicing Fee Rate for the most recently ended calendar month
("Compensating Interest").

         Section 3.25 ADMINISTRATION OF BUYDOWN FUNDS.

         The Buydown Account established and maintained by the Master Servicer
with respect to each Buydown Mortgage Loan shall be an Eligible Account. Upon
receipt from the Mortgagor of the amount due on a Due Date for each Buydown
Mortgage Loan, the Master Servicer will withdraw from the related Buydown
Account the predetermined amount that, when added to the amount due on such date
from the Mortgagor, equals the Monthly Payment and will deposit that amount
together with the related payment made by the Mortgagor in the Collection
Account. The Buydown Account shall not be an asset of any REMIC and for federal
income tax purposes shall be owned by the Master Servicer.

         If any Mortgagor on a Buydown Mortgage Loan prepays such Mortgage Loan
in its entirety during the Buydown Period, when Buydown Funds are required to be
applied to such Buydown Mortgage Loan, the Master Servicer will withdraw from
the related Buydown Account and remit to such Mortgagor or any other Person in
accordance with the related Buydown Agreement any Buydown Funds remaining in the
Buydown Account. If a Principal Prepayment by a Mortgagor during the Buydown
Period, together with any Buydown Funds in the related Buydown Account, will
result in a Principal Prepayment in Full, the Master Servicer will withdraw from
the related Buydown Account for deposit in the Collection Account the Buydown
Funds, which together with such Principal Prepayment, will result in a Principal
Prepayment in Full. If a Mortgagor defaults during the Buydown Period with
respect to a Buydown Mortgage Loan and the Mortgaged Property is sold at
foreclosure or title thereto is acquired on behalf of the Certificateholders,
the Master Servicer will withdraw from the Buydown Account the Buydown Funds
(which shall thereupon constitute "Liquidation Proceeds" for purposes of this
Agreement) for deposit in the Collection Account.

         Section 3.26 OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF LOAN
                      RATES AND MONTHLY PAYMENTS.

         In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to a calculation of
the principal balance of a Mortgage Loan that was made by the Master Servicer in
a manner not consistent with the terms of the related Mortgage Note and this
Agreement, the Master Servicer, upon discovery or receipt of notice thereof,
immediately shall deliver to the Trustee for deposit in the Distribution Account
from its own funds the amount of any such shortfall and shall indemnify and hold
harmless the Trust Fund, the Trustee, the Depositor and any successor master
servicer in respect of any such liability. Such indemnities shall survive the
termination or discharge of this Agreement.

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                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

         Section 4.01 DISTRIBUTION ACCOUNT; DISTRIBUTIONS.

         (a) The Master Servicer shall remit to the Trustee for deposit into the
Distribution Account on or before 5:00 P.M. New York time on each Master
Servicer Remittance Date by wire transfer of immediately available funds an
amount equal to the sum of (i) any Advance for the immediately succeeding
Distribution Date, (ii) any amount required to be deposited in the Distribution
Account pursuant to Sections 3.10, 3.11, 3.14 or 3.24 and (iii) all other
amounts constituting the Available Distribution Amount for the immediately
succeeding Distribution Date.

         (b) [reserved]

         (c) On each Distribution Date the Trustee shall distribute to each
Certificateholder of record as of the next preceding Record Date (other than as
provided in Section 10.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Trustee at least five
(5) Business Days prior to the related Record Date, or otherwise by check mailed
to such Certificateholder at the address of such Holder appearing in the
Certificate Register, such Certificateholder's share (based on the aggregate of
the Percentage Interests represented by Certificates of the applicable Class
held by such Holder) of the following amounts, in the following order of
priority:

                  (i) to the Senior Certificates, on a pro rata basis based on
         the Monthly Interest Distributable Amount payable on such Certificates
         with respect to such Distribution Date, the Monthly Interest
         Distributable Amount on such Classes of Certificates for such
         Distribution Date, plus any Monthly Interest Distributable Amount
         thereon remaining unpaid from any previous Distribution Date except as
         provided in the last paragraph of this Section 4.01(c) (the "Senior
         Interest Distribution Amount"); provided that the Monthly Interest
         Distributable Amount on the Class A-5, Class A-6, Class A-7 and Class
         A-8 Certificates shall be distributed as provided in Section 4.01(h)
         through (k);

                  (ii) to the Senior Certificates in the priorities and amounts
         set forth in Section 4.01(d)(i) through (vi), the Senior Principal
         Distribution Amount and the Accrual Distribution Amounts (applied to
         reduce the Certificate Principal Balances of such Senior Certificates,
         as applicable);

                  (iii) if the Certificate Principal Balances of the Subordinate
         Certificates have not been reduced to zero, to the Master Servicer, by
         remitting for deposit to the Collection Account, to the extent of and
         in reimbursement for any Advances previously made with respect to any
         Mortgage Loan or REO Property which remain unreimbursed in whole or in
         part following the Cash Liquidation or REO Disposition of such Mortgage
         Loan or REO Property, minus any such Advances that were made with
         respect to delinquencies that ultimately constituted Excess Special
         Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
         Extraordinary Losses;

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                  (iv) to the Holders of the Class B-1 Certificates, the Monthly
         Interest Distributable Amount thereon for such Distribution Date, plus
         any Monthly Interest Distributable Amount thereon remaining unpaid from
         any previous Distribution Date, except as provided below;

                  (v) to the Holders of the Class B-1 Certificates, an amount
         equal to the Subordinate Principal Distribution Amount for such Class
         of Certificates for such Distribution Date, applied in reduction of the
         Certificate Principal Balance of the Class B-1 Certificates;

                  (vi) to the Holders of the Class B-2 Certificates, the Monthly
         Interest Distributable Amount thereon for such Distribution Date, plus
         any Monthly Interest Distributable Amount thereon remaining unpaid from
         any previous Distribution Date, except as provided below;

                  (vii) to the Holders of the Class B-2 Certificates, an amount
         equal to the Subordinate Principal Distribution Amount for such Class
         of Certificates for such Distribution Date, applied in reduction of the
         Certificate Principal Balance of the Class B-2 Certificates;

                  (viii) to the Holders of the Class B-3 Certificates, the
         Monthly Interest Distributable Amount thereon for such Distribution
         Date, plus any Monthly Interest Distributable Amount thereon remaining
         unpaid from any previous Distribution Date, except as provided below;

                  (ix) to the Holders of the Class B-3 Certificates, an amount
         equal to the Subordinate Principal Distribution Amount for such Class
         of Certificates for such Distribution Date, applied in reduction of the
         Certificate Principal Balance of the Class B-3 Certificates;

                  (x) to the Holders of the Class B-4 Certificates, the Monthly
         Interest Distributable Amount thereon for such Distribution Date, plus
         any Monthly Interest Distributable Amount thereon remaining unpaid from
         any previous Distribution Date, except as provided below;

                  (xi) to the Holders of the Class B-4 Certificates, an amount
         equal to the Subordinate Principal Distribution Amount for such Class
         of Certificates for such Distribution Date, applied in reduction of the
         Certificate Principal Balance of the Class B-4 Certificates;

                  (xii) to the Holders of the Class B-5 Certificates, the
         Monthly Interest Distributable Amount thereon for such Distribution
         Date, plus any Monthly Interest Distributable Amount thereon remaining
         unpaid from any previous Distribution Date, except as provided below;

                  (xiii) to the Holders of the Class B-5 Certificates, an amount
         equal to the Subordinate Principal Distribution Amount for such Class
         of Certificates for such Distribution Date, applied in reduction of the
         Certificate Principal Balance of the Class B-5 Certificates;

                  (xiv) to the Holders of the Class B-6 Certificates, an amount
         equal to the Monthly Interest Distributable Amount thereon for such
         Distribution Date, plus any Monthly Interest

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         Distributable Amount thereon remaining unpaid from any previous
         Distribution Date, except as provided below;

                  (xv) to the Holders of the Class B-6 Certificates, an amount
         equal to the Subordinate Principal Distribution Amount for such Class
         of Certificates for such Distribution Date, applied in reduction of the
         Certificate Principal Balance of the Class B-6 Certificates;

                  (xvi) to the Senior Certificates, in the priority set forth in
         Section 4.01(d) of this Agreement, the portion, if any, of the
         Available Distribution Amount remaining after the foregoing
         distributions, applied to reduce the Certificate Principal Balances of
         such Senior Certificates, but in no event more than the aggregate of
         the outstanding Certificate Principal Balances of each such Class of
         Senior Certificates, and thereafter, to each Class of Subordinate
         Certificates then outstanding beginning with such Class with the
         Highest Priority, any portion of the Available Distribution Amount
         remaining after the Senior Certificates have been retired, applied to
         reduce the Certificate Principal Balance of each such Class of
         Subordinate Certificates, but in no event more than the outstanding
         Certificate Principal Balance of each such Class of Subordinate
         Certificates; and

                  (xvii) to the Class R-II Certificates, the balance, if any, of
         the Available Distribution Amount.

         Notwithstanding the foregoing, on any Distribution Date, with respect
to the Class of Subordinate Certificates outstanding on such Distribution Date
with the Lowest Priority, or in the event the Subordinate Certificates are no
longer outstanding, the Senior Certificates, the Monthly Interest Distributable
Amount thereon remaining unpaid from any previous Distribution Date will be
distributable only to the extent that such unpaid Monthly Interest Distributable
Amount was attributable to interest shortfalls relating to the failure of the
Master Servicer to make any required Advance, or the determination by the Master
Servicer that any proposed Advance would be a Nonrecoverable Advance with
respect to the related Mortgage Loan where such Mortgage Loan has not yet been
the subject of a Cash Liquidation or REO Disposition or the related Liquidation
Proceeds, Insurance Proceeds and REO Proceeds have not yet been distributed to
the Certificateholders.

         (d) The Senior Principal Distribution Amount and Accrual Distribution
Amounts shall be distributed to the Senior Certificates as follows:

                  (i) an amount equal to the Class A-5 Accrual Distribution
         Amount shall be distributed to the Class A-3 Certificates and Class A-4
         Certificates, in accordance with the priorities set forth below in
         clause (vi)(B)(2)(a)(II)(A) below, in each case until the Certificate
         Principal Balance thereof has been reduced to zero;

                  (ii) an amount equal to the Class A-6 Accrual Distribution
         Amount shall be distributed to the Class A-2, Class A-3, Class A-4 and
         Class A-5 Certificates, in accordance with the priorities set forth
         below in clause (vi)(B)(2)(a) below, in each case until the Certificate
         Principal Balance thereof has been reduced to zero;

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                  (iii) an amount equal to the Class A-7 Accrual Distribution
         Amount shall be distributed to the Class A-1, Class A-2, Class A-3,
         Class A-4, Class A-5 and Class A-6 Certificates, in accordance with the
         priorities set forth below in clause (vi)(B) below, in each case until
         the Certificate Principal Balance thereof has been reduced to zero;

                  (iv) an amount equal to the Class A-8 Accrual Distribution
         Amount shall be distributed to the Class A-1, Class A-2, Class A-3,
         Class A-4, Class A-5, Class A-6 and Class A-7 Certificates, in
         accordance with the priorities set forth below in clauses (vi)(B) and
         (vi)(C) below, in that order, in each case until the Certificate
         Principal Balance thereof has been reduced to zero;

                  (v) the Senior Principal Distribution Amount shall be
         distributed to the Class R-I Certificates and Class R-II Certificates,
         concurrently on a pro rata basis, until the Certificate Principal
         Balances thereof have been reduced to zero;

                  (vi) the balance of the Senior Principal Distribution Amount
         remaining after the distributions, if any, described in clause (v)
         above shall be distributed in the following manner and priority:

                           (A) FIRST, to the Class A-8 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 sum of (a) the Lockout
                  Scheduled Percentage of the aggregate of the collections
                  described in clauses (A), (B) and (E) (to the extent clause
                  (E) relates to clauses (A) and (B)) of the definition of
                  Senior Principal Distribution Amount and (b) the Lockout
                  Prepayment Percentage of the aggregate of the collections
                  described in clauses (C) and (E) (to the extent clause (E)
                  relates to clause (C))of the definition of Senior Principal
                  Distribution Amount;

                           (B) SECOND, concurrently as follows:

                                    (1) 11.6594826161% of the Senior Principal
                           Distribution Amount distributable under clause
                           (vi)(B) shall be distributed to the Class A-1
                           Certificates until the Certificate Principal Balance
                           thereof has been reduced to zero; and

                                    (2) 88.3405173839% of the Senior Principal
                           Distribution Amount distributable under clause
                           (vi)(B) shall be distributed to the Class A-2, Class
                           A-3, Class A-4, Class A-5 and Class A-6 Certificates
                           in the following manner and priority:

                                            (a) FIRST, concurrently as follows:

                                                     (I) 24.2010242736% of the
                                            Senior Principal Distribution Amount
                                            distributable under clause
                                            (vi)(B)(2)(a) shall be distributed
                                            to the Class A-2 Certificates, until
                                            the Certificate Principal Balance
                                            thereof has been reduced to zero;
                                            and

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                                                     (II) 75.7989757264% of the
                                            Senior Principal Distribution Amount
                                            distributable under clause
                                            (vi)(B)(2)(a) shall be distributed
                                            in the following manner and
                                            priority:

                                                              (A) FIRST, to the
                                                     Class A-3 Certificates and
                                                     Class A-4 Certificates,
                                                     concurrently on a pro rata
                                                     basis, until the
                                                     Certificate Principal
                                                     Balances thereof have been
                                                     reduced to zero; and

                                                              (B) SECOND, to the
                                                     Class A-5 Certificates,
                                                     until the Certificate
                                                     Principal Balance thereof
                                                     has been reduced to zero;
                                                     and

                                            (b) SECOND, to the Class A-6
                                            Certificates, until the Certificate
                                            Principal Balance thereof has been
                                            reduced to zero;

                                    (C) THIRD, to the Class A-7 Certificates,
                                    until the Certificate Principal Balance
                                    thereof has been reduced to zero; and

                                    (D) FOURTH, to the Class A-8 Certificates,
                                    until the Certificate Principal Balance
                                    thereof has been reduced to zero.

         (e) On or after the Credit Support Depletion Date, all priorities
relating to distributions as described in Section 4.01(d) above in respect of
principal among the various classes of Senior Certificates will be disregarded,
and the Senior Principal Distribution Amount will be distributed to the
remaining Senior Certificates, pro rata in accordance with their respective
outstanding Certificate Principal Balances, and the Senior Interest Distribution
Amount will be distributed as set forth above in Section 4.01(c)(i).

         (f) After the reduction of the Certificate Principal Balances of the
Senior Certificates to zero but prior to the Credit Support Depletion Date, the
Senior Certificates will be entitled to no further distributions of principal
thereon and the Available Distribution Amount will be paid solely to the holders
of the Class B Certificates, as described herein.

         (g) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the Depositor
or the Master Servicer shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.

         (h) On each Distribution Date prior to the Class A-5 Accretion
Termination Date, an amount equal to the Monthly Interest Distributable Amount
that would otherwise be distributed on the Class A-5 Certificates shall be added
to Certificate Principal Balance of the Class A-5

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Certificates. On or after the related Accretion Termination Date, the entire
amount of Monthly Interest Distributable Amount on the Class A-5 Certificates
for such Distribution Date shall be payable to the Class A-5 Certificateholders
pursuant to Section 4.01(c)(i) of this Agreement to the extent not required to
reduce the aggregate Certificate Principal Balance of the Class A-2 Certificates
and Class A-3 Certificates to zero on such Class A-5 Accretion Termination Date;
provided that if the Class A-5 Accretion Termination Date is the Credit Support
Depletion Date, the entire amount of Monthly Interest Distributable Amount on
the Class A-5 Certificates for such Distribution Date will be paid to the Class
A-5 Certificateholders. Any such Monthly Interest Distributable Amount on the
Class A-5 Certificates which is required to be paid to the holders of the Class
A-2 Certificates and Class A-3 Certificates on such Class A-5 Accretion
Termination Date will be added to the Certificate Principal Balance of the Class
A-5 Certificates in the manner described in the first sentence of this Section
4.01(h).

         (i) On each Distribution Date prior to the Class A-6 Accretion
Termination Date, an amount equal to the Monthly Interest Distributable Amount
that would otherwise be distributed on the Class A-6 Certificates shall be added
to Certificate Principal Balance of the Class A-6 Certificates. On or after the
related Accretion Termination Date, the entire amount of Monthly Interest
Distributable Amount on the Class A-6 Certificates for such Distribution Date
shall be payable to the Class A-6 Certificateholders pursuant to Section
4.01(c)(i) of this Agreement to the extent not required to reduce the aggregate
Certificate Principal Balance of the Class A-2, Class A-3, Class A-4 and Class
A-5 Certificates to zero on such Class A-6 Accretion Termination Date; provided
that if the Class A-6 Accretion Termination Date is the Credit Support Depletion
Date, the entire amount of Monthly Interest Distributable Amount on the Class
A-6 Certificates for such Distribution Date will be paid to the Class A-6
Certificateholders. Any such Monthly Interest Distributable Amount on the Class
A-6 Certificates which is required to be paid to the holders of the Class A-2,
Class A-3, Class A-4 and Class A-5 Certificates on such Class A-6 Accretion
Termination Date will be added to the Certificate Principal Balance of the Class
A-6 Certificates in the manner described in the first sentence of this Section
4.01(i).

         (j) On each Distribution Date prior to the Class A-7 Accretion
Termination Date, an amount equal to the Monthly Interest Distributable Amount
that would otherwise be distributed on the Class A-7 Certificates shall be added
to Certificate Principal Balance of the Class A-7 Certificates. On or after the
related Accretion Termination Date, the entire amount of Monthly Interest
Distributable Amount on the Class A-7 Certificates for such Distribution Date
shall be payable to the Class A-7 Certificateholders pursuant to Section
4.01(c)(i) of this Agreement to the extent not required to reduce the aggregate
Certificate Principal Balance of the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5 and Class A-6 Certificates to zero on such Class A-7 Accretion
Termination Date; provided that if the Class A-7 Accretion Termination Date is
the Credit Support Depletion Date, the entire amount of Monthly Interest
Distributable Amount on the Class A-7 Certificates for such Distribution Date
will be paid to the Class A-7 Certificateholders. Any such Monthly Interest
Distributable Amount on the Class A-7 Certificates which is required to be paid
to the holders of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and
Class A-6 Certificates on such Class A-7 Accretion Termination Date will be
added to the Certificate Principal Balance of the Class A-7 Certificates in the
manner described in the first sentence of this Section 4.01(j).

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<PAGE>

         (k) On each Distribution Date prior to the Class A-8 Accretion
Termination Date, an amount equal to the Monthly Interest Distributable Amount
that would otherwise be distributed on the Class A-8 Certificates shall be added
to Certificate Principal Balance of the Class A-8 Certificates. On or after the
related Accretion Termination Date, the entire amount of Monthly Interest
Distributable Amount on the Class A-8 Certificates for such Distribution Date
shall be payable to the Class A-8 Certificateholders pursuant to Section
4.01(c)(i) of this Agreement to the extent not required to reduce the aggregate
Certificate Principal Balance of the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6 and Class A-7 Certificates to zero on such Class A-8
Accretion Termination Date; provided that if the Class A-8 Accretion Termination
Date is the Credit Support Depletion Date, the entire amount of Monthly Interest
Distributable Amount on the Class A-6 Certificates for such Distribution Date
will be paid to the Class A-8 Certificateholders. Any such Monthly Interest
Distributable Amount on the Class A-8 Certificates which is required to be paid
to the holders of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6 and Class A-7 Certificates on such Class A-8 Accretion Termination
Date will be added to the Certificate Principal Balance of the Class A-8
Certificates in the manner described in the first sentence of this Section
4.01(k).

         (l) Except as otherwise provided in Section 10.01, if the Master
Servicer anticipates that a final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Master Servicer
shall, no later than the Determination Date in the month of such final
distribution, notify the Trustee and the Trustee shall, no later than two (2)
Business Days after such Determination Date, mail on such date to each Holder of
such Class of Certificates a notice to the effect that: (i) the Trustee
anticipates that the final distribution with respect to such Class of
Certificates will be made on such Distribution Date but only upon presentation
and surrender of such Certificates at the office of the Trustee or as otherwise
specified therein, and (ii) no interest shall accrue on such Certificates from
and after the end of the prior calendar month.

         Any funds not distributed to any Holder or Holders of Certificates of
such Class on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust and credited to the account of the appropriate non- tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 4.01(l) 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 Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within six months after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee shall
take reasonable steps as directed by the Depositor, or appoint an agent to take
reasonable steps, to contact the remaining non-tendering Certificateholders
concerning surrender of their Certificates. The costs and expenses of
maintaining the fiends in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in the Trust Fund. If within nine months
after the second notice any such Certificates shall not have been surrendered
for cancellation, the Class R Certificateholders shall be entitled to all
unclaimed funds and other assets which remain subject hereto. No interest shall
accrue or be payable to any Certificateholder on any amount held in trust as a
result of such Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with this Section 4.01(l).

         (m) Distributions of interest shall be deemed to be made to each REMIC
I Regular Interest in an amount equal to the related Uncertificated Monthly
Interest Distributable Amount.

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<PAGE>

Distributions of principal shall be deemed to be made to each of the REMIC I
Regular Interests in the same manner and priority as principal payments are made
to Corresponding Certificated Interests.

         (n) Distributions of interest in respect of the Class A-7 Certificates
shall be deemed to be made to the Class A-7A Component and the Class A-7B
Component, with deemed interest in respect of the Class A-7A Component equal to
the amount which would be determined under the definition of Monthly Interest
Distributable Amount using the Pass-Through Rate for the Class A-7A Component
and a Certificate Principal Balance equal to the Class A-7A Component Principal
Balance, and with deemed interest in respect of the Class A-7B Component equal
to the amount which would be determined under the definition of Monthly Interest
Distributable Amount using the Pass-Through Rate for the Class A-7B Component
and a Certificate Principal Balance equal to the Class A-7B Component Notional
Amount. Distributions of principal in respect of the Class A-7 Certificates
shall be deemed to be made to the Class A-7A Component.

         Section 4.02 STATEMENTS TO CERTIFICATEHOLDERS.

         On each Distribution Date the Trustee shall make available to each
Holder of a Certificate and to the Depositor, the Master Servicer and the Rating
Agency, a statement based on information contained in the Remittance Report:

                  (i) the amount of the distribution made on such Distribution
         Date to the Holders of each Class of Certificates, separately
         identified, allocable to principal;

                  (ii) the amount of the distribution made on such Distribution
         Date to the Holders of each Class of Certificates allocable to
         interest, separately identified;

                  (iii) the aggregate amount of servicing compensation received
         by the Master Servicer during the related Due Period and such other
         customary information as the Trustee deems necessary or desirable, or
         which a Certificateholder reasonably requests, to enable
         Certificateholders to prepare their tax returns;

                  (iv) the aggregate amount of Advances for the related Due
         Period;

                  (v) the aggregate Stated Principal Balance of the Mortgage
         Loans at the close of business at the end of the related Due Period;

                  (vi) the number, weighted average remaining term to maturity
         and weighted average Loan Rate of the Mortgage Loans as of the related
         Due Date;

                  (vii) the number and aggregate unpaid principal balance of
         Mortgage Loans (a) one month, two months or three months Delinquent on
         a contractual basis, (b) as to which foreclosure proceedings have been
         commenced and (c) in bankruptcy as of the close of business on the last
         day of the calendar month preceding such Distribution Date;

                  (viii) with respect to any Mortgage Loan that became an REO
         Property during the preceding calendar month, the unpaid principal
         balance and the Stated Principal Balance of such Mortgage Loan as of
         the date it became an REO Property;

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<PAGE>

                  (ix) the book value of any REO Property as of the close of
         business on the last Business Day of the calendar month preceding the
         Distribution Date, and, cumulatively, the total number and cumulative
         principal balance of all REO Properties as of the close of business of
         the last day of the preceding due period;

                  (x) the aggregate amount of Principal Prepayments made during
         the related Prepayment Period;

                  (xi) the aggregate amount of Realized Losses incurred during
         the related Due Period and the cumulative amount of Realized Losses;

                  (xii) the aggregate amount of Extraordinary Trust Fund
         Expenses withdrawn from the Collection Account for such Distribution
         Date;

                  (xiii) the Certificate Principal Balance of each Class of
         Certificates, after giving effect to the distributions made on such
         Distribution Date;

                  (xiv) the aggregate amount of interest accrued at the related
         Pass-Through Rate with respect to each Class during the related
         Interest Accrual Period and the respective portions thereof, if any,
         remaining unpaid following the distributions made in respect of such
         Certificates on such Distribution Date;

                  (xv) the aggregate amount of any Prepayment Interest
         Shortfalls for such Distribution Date, to the extent not covered by
         payments of Compensating Interest by the Master Servicer pursuant to
         Section 3.24;

                  (xvi) the Available Distribution Amount; and

                  (xvii) the aggregate Stated Principal Balance of Mortgage
         Loans purchased by the Master Servicer during the related Due Period
         and indicating the Section of this Agreement requiring or allowing the
         purchase of each such Mortgage Loan.

         The Trustee will make the monthly statements described above (and, at
its option, any additional files containing the same information in an
alternative format) available on each Distribution Date to Certificateholders,
and other parties to the Pooling and Servicing Agreement via the Trustee's
internet website and its fax-on-demand service. The Trustee's internet website
shall initially be located at "www.sf.citidirect.com". Assistance in using the
website can be obtained by calling the Trustee's customer service desk at (212)
657-2186. Parties that are unable to use the above distribution options are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Trustee shall have the right to
change the way monthly statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes.

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<PAGE>

         On each Distribution Date, the Trustee shall provide Bloomberg
Financial Markets, L.P. ("Bloomberg") CUSIP level information for each Class of
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Trustee and Bloomberg.

         In addition, the Trustee will make available, as a convenience for
interested parties (and not in furtherance of the distribution of any related
prospectus or prospectus supplement under the securities laws), this Agreement,
the related prospectus and prospectus supplement via the Trustee's internet
website.

         The Trustee will make no representations or warranties as to the
accuracy of completeness of such documents and will assume no responsibility
therefor.

         In connection with providing access to the Trustee's website, the
Trustee may require registration and the acceptance of a disclaimer. The Trustee
shall not be liable for the dissemination of information in accordance with this
Agreement which is not due to an error on the part of the Trustee with respect
to such information.

         In the case of information furnished pursuant to subclauses (i)-(iii)
above, the amounts shall also be expressed as a dollar amount per Single
Certificate.

         The Trustee shall provide to each Certificateholder any written reports
or other information required by the Code and regulations thereunder as from
time to time are in force. In addition, upon written request, within a
reasonable period of time after the end of each calendar year, the Trustee shall
prepare and forward, to each Person who at any time during the calendar year was
a Certificateholder, a statement containing the information set forth in
subclauses (i) - (iii) above, aggregated for such calendar year or applicable
portion thereof during which such person was a Certificateholder.

         Section 4.03 REMITTANCE REPORTS; ADVANCES BY THE MASTER SERVICER.

         (a) On the second Business Day following each Determination Date but in
no event less than five Business Days prior to the related Distribution Date,
the Master Servicer shall deliver to the Trustee by telecopy (or by such other
means as the Master Servicer and the Trustee may agree from time to time) a
Remittance Report, and other data mutually agreed upon, with respect to the
related Distribution Date. On the same date, the Master Servicer shall forward
to the Trustee by overnight mail a computer readable magnetic tape or diskette
or in such other medium as may be agreed between the Master Servicer and the
Trustee containing the information set forth in such Remittance Report with
respect to the related Distribution Date. The Master Servicer shall deliver or
cause to be delivered to the Trustee in addition to the information provided on
the Remittance Report, such other information reasonably available to it with
respect to the Mortgage Loans as the Trustee may reasonably require to perform
the calculations necessary to make the distributions contemplated by Section
4.01 and 4.06 and to prepare the statements to Certificateholders contemplated
by Section 4.02. The Master Servicer shall make a good faith effort to deliver
any such additional information to the Trustee within two Business Days of any
such request, provided that in no event shall the Master Servicer be required to
provide any such additional information to the Trustee to the extent the Trustee
makes such request prior to five Business Days prior to the Master

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Servicer Remittance Date. The Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer.

         (b) The amount of Advances to be made by the Master Servicer for any
Distribution Date shall equal the sum of (i) the aggregate amount of Monthly
Payments (net of the related Servicing Fee), due during the related Due Period
in respect of the Mortgage Loans, which Monthly Payments were delinquent on a
contractual basis as of the close of business on the related Determination Date
and (ii) with respect to each REO Property, which REO Property was acquired
during or prior to the related Due Period and as to which REO Property an REO
Disposition did not occur during the related Due Period, an amount equal to the
excess, if any, of the REO Imputed Interest on such REO Property for the most
recently ended calendar month, over the net income from such REO Property
transferred to the Distribution Account pursuant to Section 4.01 for
distribution on such Distribution Date, less amounts held for future
distributions.

         Before the close of business New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Master Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Master Servicer with respect to the Mortgage Loans and REO Properties.
Any amounts held for future distribution and so used shall be appropriately
reflected in the Master Servicer's records and replaced by the Master Servicer
by deposit in the Collection Account on or before any future Master Servicer
Remittance Date to the extent that the Available Distribution Amount for the
related Distribution Date (determined without regard to Advances to be made on
the Master Servicer Remittance Date) shall be less than the total amount that
would be distributed to the Classes of Certificateholders pursuant to Section
4.01 on such Distribution Date if such amounts held for future distributions had
not been so used to make Advances. The Trustee will provide notice to the Master
Servicer by telecopy on any Master Servicer Remittance Date or within one
Business Day in the event that the amount remitted by the Master Servicer to the
Trustee on such date is less than the Advances required to be made by the Master
Servicer for the related Distribution Date, less amounts held for future
distributions, as set forth in the related Remittance Report.

         (c) The obligation of the Master Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until the
Mortgage Loan is paid in full or until the recovery of all Liquidation Proceeds
thereon; provided, however, that such obligation will cease if title to the
Mortgaged Property is acquired by the Trust Fund in foreclosure or by deed in
lieu of foreclosure.

         (d) Notwithstanding anything herein to the contrary, no Advance shall
be required to be made hereunder by the Master Servicer if such Advance would,
if made, constitute a Nonrecoverable Advance. The determination by the Master
Servicer that it has made a Nonrecoverable Advance or that any proposed Advance,
if made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the Depositor and the
Trustee.

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         Section 4.04 ALLOCATION OF REALIZED LOSSES.

         Prior to each Distribution Date, the Master Servicer shall determine
the total amount of Realized Losses, if any, that resulted from any Cash
Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition that
occurred during the related Prepayment Period. The amount of each Realized Loss
shall be evidenced by an Officers' Certificate. All Realized Losses, other than
Excess Special Hazard Losses, Extraordinary Losses, Excess Bankruptcy Losses or
Excess Fraud Losses, shall be allocated as follows: first, to the Class B-6
Certificates until the Certificate Principal Balance thereof has been reduced to
zero; second, to the Class B-5 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class B-4 Certificates
until the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class B-3 Certificates until the Certificate Principal Balance
thereof has been reduced to zero; fifth, to the Class B-2 Certificates until the
Certificate Principal Balance thereof has been reduced to zero; sixth, to the
Class B-1 Certificates until the Certificate Principal Balance thereof has been
reduced to zero; and thereafter such Realized Losses will be allocated among all
the Senior Certificates on a pro rata basis, as described below. Any Excess
Special Hazard Losses, Excess Bankruptcy Losses, Excess Fraud Losses,
Extraordinary Losses on the Mortgage Loans will be allocated among the Senior
Certificates and Subordinate Certificates, on a pro rata basis, as described
below.

         As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date in the case of the principal portion of a Realized Loss or based on the
Monthly Interest Distributable Amount thereon payable on such Distribution Date
(without regard to any Compensating Interest for such Distribution Date) in the
case of an interest portion of a Realized Loss. Any allocation of the principal
portion of Realized Losses (other than Debt Service Reductions) to the Class B
Certificates then outstanding with the highest numerical designation shall be
made by operation of the definition of "Certificate Principal Balance" and by
operation of the provisions of Section 4.01. Allocations of the interest
portions of Realized Losses shall be made by operation of the definition of
"Monthly Interest Distributable Amount" and by operation of the provisions of
Section 4.01. Allocations of the principal portion of Debt Service Reductions
shall be made by operation of the provisions of Section 4.01. All Realized
Losses and all other losses allocated to a Class of Certificates hereunder will
be allocated among the Certificates of such Class in proportion to the
Percentage Interests evidenced thereby. Realized Losses allocated to the Regular
Certificates shall be deemed allocated to the REMIC I Regular Interests in the
amount and priority allocated to Corresponding Certificated Interests. For
federal income tax purposes, Realized Losses allocated to the Class A-7
Certificates in respect of principal shall be deemed allocated to the Class A-7A
Component, and Realized Losses allocated to the Class A-7 Certificates in
respect of interest on any Distribution Date shall be allocated between the
Class A-7A Component and the Class A-7B Component in proportion to each such
component's entitlement to interest on such Distribution Date.

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         Section 4.05 INFORMATION REPORTS TO BE FILED BY THE MASTER SERVICER.

         The Master Servicer or the Sub-Servicers shall file information reports
with respect to the receipt of mortgage interest received in a trade or
business, foreclosures and abandonments of any Mortgaged Property and the
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property required by Sections 6050H, 6050J and 6050P of the
Code, respectively, and deliver to the Trustee an Officers' Certificate stating
that such reports have been filed. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by such Sections 6050H,
6050J and 6050P of the Code.

         Section 4.06 COMPLIANCE WITH WITHHOLDING REQUIREMENTS.

         Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount on the Mortgage Loans,
that the Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for such withholding. In the event
the Trustee withholds any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall, together with its monthly report to
such Certificateholders pursuant to Section 4.03 hereof, indicate such amount
withheld.

         Section 4.07 [RESERVED].

         Section 4.08 LIMITED PURPOSE SURETY BOND.

         If a Required Surety Payment is payable pursuant to the Limited Purpose
Surety Bond with respect to any Additional Collateral Mortgage Loans, as
determined by the Master Servicer and the Additional Collateral Servicer, the
Master Servicer shall so notify the Trustee as soon as reasonably practicable
and the Trustee shall promptly complete the notice in the form of Attachment 1
to the Limited Purpose Surety Bond and shall promptly submit such notice to the
surety as a claim for a Required Surety Payment. The Master Servicer shall upon
request assist the Trustee in completing such notice and shall provide any
information requested by the Trustee in connection therewith.

         Upon receipt of a Required Surety Payment from the surety on behalf of
the Certificateholders, the Trustee shall deposit such Required Surety Payment
in the Distribution Account and shall distribute such Required Surety Payment,
or the proceeds thereof, in accordance with the provisions of Section 4.01.

         The Trustee shall (i) receive as attorney-in-fact of each Holder of a
Certificate any Required Surety Payment from the surety and (ii) disburse the
same to the Holders of such Certificates as set forth in Section 4.01.

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                                    ARTICLE V

                                THE CERTIFICATES

         Section 5.01 THE CERTIFICATES.

         Each of the Class A, Class B and Class R Certificates shall be
substantially in the forms annexed hereto as exhibits, and shall, on original
issue, be executed, authenticated and delivered by the Trustee to or upon the
receipt of a Written Order to Authenticate from the Depositor concurrently with
the sale and assignment to the Trustee of the Trust Fund. Each Class of the
Certificates (other than the Class R Certificates) shall be initially evidenced
by one or more Certificates representing a Percentage Interest with a minimum
dollar denomination of $25,000 and integral dollar multiples of $1 in excess
thereof. Each Class of Residual Certificates will be issued in registered,
certificated form in minimum denominations of a 20% Percentage Interest except
in the case of one of each of the Class R-I Certificates and Class R-II
Certificates. Provided however, that one Certificate of each such Class of
Certificates may be in a different denomination so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Certificate Principal Balance of such Class on the Closing Date.

         The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Certificates, other
than the Class R, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates, shall be Book-Entry Certificates.

         Section 5.02 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.

         (a) The Certificate Registrar shall cause to be kept at the Corporate
Trust Office a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Trustee shall initially serve as Certificate Registrar for
the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided.

         Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Class R Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same aggregate
Percentage Interest.

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         At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in authorized denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute on behalf of the Trust and authenticate and
deliver the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of transfer or exchange shall (if so required by the Trustee or the Certificate
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer satisfactory to the Trustee and the Certificate Registrar duly executed
by, the Holder thereof or his attorney duly authorized in writing.

         (b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of such Certificates may not
be transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Certificates; (iii) ownership
and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall for all
purposes deal with the Depository as representative of the Certificate Owners of
the Certificates for purposes of exercising the rights of Holders 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; (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Trustee and its
agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.

         All transfers by Certificate Owners of Book-Entry 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
that it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The parties hereto are
hereby authorized to execute a Letter of Representations with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement, the terms of this
Agreement shall control.

         (c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole option,
with the consent of the Depository Participants and the Trustee, elects to
terminate the book- entry system through the Depository (with respect to some or
all of the Book-Entry Certificates) or (iii) after the occurrence of a Master
Servicer Event of Termination, the Certificate Owners of each Class of
Book-Entry Certificates representing Percentage Interests of such Classes
aggregating not less than 51% advises the Trustee and the Depository
Participants in writing that the continuation

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of a book-entry system through the Depository to the exclusion of definitive,
fully registered certificates (the "Definitive Certificates") to Certificate
Owners is no longer in the best interests of the Certificate Owners. Upon
surrender to the Certificate Registrar of the Book-Entry Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall, at the Depositor's expense, in the case of (ii)
above, or the related Seller's expense, in the case of (i) and (iii) above,
execute on behalf of the Trust and authenticate the Definitive Certificates.

         In addition, if a Master Servicer Event of Termination has occurred and
is continuing, each Certificate Owner materially adversely affected thereby may
at its option request a Definitive Certificate evidencing such Certificate
Owner's Percentage Interest in the related Class of Certificates. In order to
make such request, such Certificate Owner shall, subject to the rules and
procedures of the Depository, provide the Depository or the related Depository
Participant with directions for the Trustee to exchange or cause the exchange of
the Certificate Owner's interest in such Class of Certificates for an equivalent
Percentage Interest in fully registered definitive form. Upon receipt by the
Trustee of instruction from the Depository directing the Trustee to effect such
exchange (such instructions to contain information regarding the Class of
Certificates and the Certificate Principal Balance being exchanged, the
Depository Participant account to be debited with the decrease, the registered
holder of and delivery instructions for the Definitive Certificates and any
other information reasonable required by the Trustee), (i) the Trustee shall
instruct the Depository to reduce the related Depository Participant's account
by the aggregate Certificate Principal Balance of the Definitive Certificates,
(ii) the Trustee shall execute, authenticate and deliver, in accordance with the
registration and delivery instructions provided by the Depository, a Definitive
Certificate evidencing such Certificate Owner's Percentage Interest in such
Class of Certificates and (iii) the Trustee shall execute and authenticate a new
Book-Entry Certificate reflecting the reduction in the aggregate Certificate
Principal Balance of such Class of Certificates by the amount of the Definitive
Certificates.

         Neither the Depositor nor the Trustee shall be liable for any delay in
delivery of any instruction required under this section and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Certificates, the Trustee, the Certificate Registrar, the
Master Servicer, any Paying Agent and the Depositor shall recognize the Holders
of the Definitive Certificates as Certificateholders hereunder.

         (d) No transfer, sale, pledge or other disposition of any Private
Certificate shall be made unless such disposition is exempt from the
registration requirements of the Securities Act of 1933, as amended (the "1933
Act"), and any applicable state securities laws or is made in accordance with
the 1933 Act and laws. In the event of any such transfer, (i) if such transfer
is made in reliance upon Rule 144A under the 1933 Act, the Trustee shall require
the transferee to execute an investment letter in substantially the form
attached hereto as Exhibit F-1, or (ii) (A) the Trustee shall require the
transferor to execute a transferor certificate (in substantially the form
attached hereto as Exhibit F-2) and the transferee to execute an investment
letter (in substantially the form attached hereto as Exhibit F-3) acceptable to
and in form and substance reasonably satisfactory to the Depositor and the
Trustee certifying to the Depositor and the Trustee the facts surrounding such
transfer, which investment letter shall not be an expense of the Trustee or the
Depositor and (B) the Trustee and the Depositor shall require a written Opinion
of Counsel (which may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory to the Trustee and the Depositor that such
transfer may

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be made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from the 1933 Act or is being made pursuant to the 1933 Act,
which Opinion of Counsel shall not be an expense of the Trustee or the
Depositor. The Holder of a Private Certificate desiring to effect such transfer
shall, and does hereby agree to, indemnify 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 federal and state laws.

         (e) No purchase or transfer of an ERISA-Restricted Certificate shall be
made unless the Trustee shall have received (i) a representation from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee and the Depositor, (such requirement is satisfied
only by the Trustee's receipt of a representation letter from the transferee (in
the case of a Class B-4, Class B-5 or Class B-6 Certificate) substantially in
the form of Exhibit G-1 hereto or receipt of a representation from the
transferee (in the case of a Class R Certificate) substantially in the form of
paragraph (xvii) of Exhibit F-4, as appropriate), to the effect that either (a)
such transferee is not an employee benefit plan or arrangement subject to
Section 406 of ERISA or a plan subject to Section 4975 of the Code, nor a person
acting on behalf of any such plan or arrangement nor using the assets of any
such plan or arrangement to effect such transfer (each, a "Plan Investor") or
(b) in the case of a Class B-4, Class B-5 or Class B-6 Certificate, the purchase
of such Certificate by or on behalf of such Plan is permissible under applicable
law, will not subject the Depositor, the Trustee or the Master Servicer to any
obligation in addition to those undertaken in the Agreement and the following
conditions are satisfied: (I) the transferee is an insurance company, (II) the
source of funds used to purchase such Certificates is an "insurance company
general account" (as such term is defined in Prohibited Transaction Class
Exemption ("PTCE") 95-60) and (III) the conditions set forth in Section III of
PTCE 95-60 and all other applicable conditions of PTCE 95-60 have been satisfied
and as a result the acquisition and holding of such Certificates will not
constitute or result in a non-exempt prohibited transaction under ERISA or
Section 4975 of the Code or (ii) in the case of any such ERISA-Restricted
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA or a plan or arrangement subject to Section 4975 of the Code
(or comparable provisions of any subsequent enactments), or a trustee of any
such plan or any other person acting on behalf of any such plan or arrangement
or using such plan's or arrangement's assets, an Opinion of Counsel addressed to
the Depositor, the Trustee and the Master Servicer, satisfactory to such
entities, which Opinion of Counsel shall not be an expense of such entities, to
the effect that the purchase or holding of such ERISA-Restricted Certificate is
permissible under applicable law, will not result in a non-exempt prohibited
transaction provisions of ERISA or Section 4975 of the Code and will not subject
the Trustee, the Master Servicer or the Depositor to any obligation or liability
in addition to those expressly undertaken in this Agreement. Notwithstanding
anything else to the contrary herein, any purported transfer of an
ERISA-Restricted Certificate to or on behalf of an employee benefit plan subject
to ERISA or to the Code without the delivery to the Trustee of either a
representation in the form of Exhibit G-1 (in the case of a Class B-4, Class B-5
or Class B-6 Certificate) or paragraph (xvii) of Exhibit F-4 (in the case of a
Class R Certificate) hereto or an Opinion of Counsel as described above shall be
void and of no effect.

         Any Holder of a Class B-2 Certificate or Class B-3 Certificate or any
interest therein shall represent in the form of Exhibit G-2 with respect to such
Certificates, that either (i) such Holder is not a Plan Investor or (ii) such
Holder is an "accredited investor" as defined in Rule 501(a)(1) of Regulation D
of the Securities and Exchange Commission under the Securities Act of 1933.

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         If any Book-Entry Certificate (or any interest therein) is acquired or
held in violation of the provisions of Section 5.02(e) above, then the last
preceding Transferee that either (i) is not a Plan Investor or (ii) is in
compliance with Section 5.02(e)(i)(b) shall be restored, to the extent permitted
by law, to all rights and obligations as Certificate Owner thereof retroactive
to the date of such Transfer of such Certificate. The Trustee shall be under no
liability to any Person for making any payments due on such Certificate to such
preceding Transferee.

         Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
restrictions in this Section 5.02(e) shall indemnify and hold harmless the
Depositor, the Trustee, the Master Servicer 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.

         (f) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Class R Certificate are expressly subject to the
following provisions:

                  (i) Each Person holding or acquiring any Ownership Interest in
         a Class R Certificate shall be a Permitted Transferee and shall
         promptly notify the Trustee of any change or impending change in its
         status as a Permitted Transferee.

                  (ii) No Person shall acquire an Ownership Interest in a Class
         R Certificate unless such Ownership Interest is a pro rata undivided
         interest.

                  (iii) In connection with any proposed transfer of any
         Ownership Interest in a Class R Certificate, the Trustee shall as a
         condition to registration of the transfer, require delivery to it, in
         form and substance satisfactory to it, of each of the following:

                           A. an affidavit in the form of Exhibit F-4 hereto
                  from the proposed transferee to the effect that such
                  transferee is a Permitted Transferee and that it is not
                  acquiring its Ownership Interest in the Class R Certificate
                  that is the subject of the proposed transfer as a nominee,
                  trustee or agent for any Person who is not a Permitted
                  Transferee; and

                           B. covenant of the proposed transferee to the effect
                  that the proposed transferee agrees to be bound by and to
                  abide by the transfer restrictions applicable to the Class R
                  Certificates.

                  (iv) Any attempted or purported transfer of any Ownership
         Interest in a Class R Certificate in violation of the provisions of
         this Section shall be absolutely null and void and shall vest no rights
         in the purported transferee. If any purported transferee shall, in
         violation of the provisions of this Section, become a Holder of a Class
         R Certificate, then the prior Holder of such Class R Certificate that
         is a Permitted Transferee shall, upon discovery that

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         the registration of transfer of such Class R Certificate was not in
         fact permitted by this Section, be restored to all rights as Holder
         thereof retroactive to the date of registration of transfer of such
         Class R Certificate. The Trustee shall be under no liability to any
         Person for any registration of transfer of a Class R Certificate that
         is in fact not permitted by this Section or for malting any
         distributions due on such Class R Certificate to the Holder thereof or
         tatting any other action with respect to such Holder under the
         provisions of this Agreement so long as the Trustee received the
         documents specified in clause (iii). The Trustee shall be entitled to
         recover from any Holder of a Class R Certificate that was in fact not a
         Permitted Transferee at the time such distributions were made all
         distributions made on such Class R Certificate. Any such distributions
         so recovered by the Trustee shall be distributed and delivered by the
         Trustee to the prior Holder of such Class R Certificate that is a
         Permitted Transferee.

                  (v) If any Person other than a Permitted Transferee acquires
         any Ownership Interest in a Class R Certificate in violation of the
         restrictions in this Section, then the Trustee shall have the right but
         not the obligation, without notice to the Holder of such Class R
         Certificate or any other Person having an Ownership Interest therein,
         to notify the Depositor to arrange for the sale of such Class R
         Certificate. The proceeds of such sale, net of commissions (which may
         include commissions payable to the Depositor or its affiliates in
         connection with such sale), expenses and taxes due, if any, will be
         remitted by the Trustee to the previous Holder of such Class R
         Certificate that is a Permitted Transferee, except that in the event
         that the Trustee determines that the Holder of such Class R Certificate
         may be liable for any amount due under this Section or any other
         provisions of this Agreement, the Trustee may withhold a corresponding
         amount from such remittance as security for such claim. The terms and
         conditions of any sale under this clause (v) shall be determined in the
         sole discretion of the Trustee and it shall not be liable to any Person
         having an Ownership Interest in a Class R Certificate as a result of
         its exercise of such discretion.

                  (vi) If any Person other than a Permitted Transferee acquires
         any Ownership Interest in a Class R Certificate in violation of the
         restrictions in this Section, then the Trustee upon receipt of
         reasonable compensation will provide to the Internal Revenue Service,
         and to the persons specified in Sections 860E(e)(3) and (6) of the
         Code, information needed to compute the tax imposed under Section
         860E(e)(5) of the Code on transfers of residual interests to
         disqualified organizations.

The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Trustee, in form and substance satisfactory to the Trustee, (i) written
notification from the Rating Agency that the removal of the restrictions on
Transfer set forth in this Section will not cause such Rating Agency to
downgrade its rating of the Certificates and (ii) an Opinion of Counsel to the
effect that such removal will not cause any REMIC hereunder to fail to qualify
as a REMIC.

         (g) No service charge shall be made for any registration of transfer or
exchange of Certificates of any Class, but the Certificate Registrar 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.

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         All Certificates surrendered for registration of transfer or exchange
shall be cancelled by the Certificate Registrar and disposed of pursuant to its
standard procedures.

         Section 5.03 MUTILATED. DESTROYED. LOST OR STOLEN CERTIFICATES.

         If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar 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 and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
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.

         The Master Servicer, the Depositor, the Trustee, the Certificate
Registrar, any Paying Agent and any agent of the Master Servicer, the Depositor,
the Certificate Registrar, any Paying Agent or the Trustee may treat the Person,
including a Depository, in whose name any Certificate is registered as the owner
of such Certificate for the purpose of receiving distributions pursuant to
Section 4.01 and for all other purposes whatsoever, and none of the Master
Servicer, the Trust, the Trustee nor any agent of any of them shall be affected
by notice to the contrary.

         To the extent the Trustee, Certificate Registrar or any Paying Agent is
required pursuant to this Agreement to determine the identity of the beneficial
owner of a Book-Entry Certificate, any costs assessed by the Depository in
making such determination shall be an expense of the party making such request,
but in no event shall such cost be an expense of the Trust Fund.

         Section 5.05 APPOINTMENT OF PAYING AGENT.

         (a) The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Section 4.01 and shall report the
amounts of such distributions to the Trustee. The duties of the Paying Agent may
include the obligation (i) to withdraw funds from the Distribution Account
pursuant to Sections 3.10 and 3.11 and for the purpose of making the
distributions referred to above and (ii) to distribute statements and provide
information to Certificateholders as required hereunder. The Paying Agent
hereunder shall at all times be an entity duly incorporated and validly existing
under the laws of the United States of America or any state thereof, authorized
under such laws to exercise corporate trust powers and subject to supervision or
examination by federal or state authorities. The Paying Agent shall initially be
the Trustee. The Trustee may appoint a successor to act as Paying Agent, which
appointment shall be reasonably satisfactory to the Depositor and the Rating
Agency.

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         (b) The Trustee shall cause the Paying Agent (if other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders and shall agree that it shall comply with all
requirements of the Code regarding the withholding of payments in respect of
Federal income taxes due from Certificate Owners and otherwise comply with the
provisions of this Agreement applicable to it.

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                                   ARTICLE VI

                      THE MASTER SERVICER AND THE DEPOSITOR

         Section 6.01 LIABILITY OF THE MASTER SERVICER AND THE DEPOSITOR.

         The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the Master
Servicer, as the case may be, herein. The Depositor shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Depositor.

         Section 6.02 MERGER OR CONSOLIDATION OF OR ASSUMPTION OF THE
                      OBLIGATIONS OF THE MASTER SERVICER OR THE DEPOSITOR.

         Any entity into which the Master Servicer or Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Master Servicer or the Depositor shall be a party, or
any corporation succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master Servicer or the Depositor, as
the case may be, 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; provided, however, that the successor master servicer
shall satisfy all the requirements of Section 7.02 with respect to the
qualifications of a successor master servicer.

         Section 6.03 LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS.

         Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master Servicer shall be under any liability to the
Trust or the Certificateholders for any action taken or for refraining from the
taking of any action by the Master Servicer 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 liability
which would otherwise be imposed by reason of its willful misfeasance, bad faith
or negligence in the performance of duties of the Master Servicer or by reason
of its reckless disregard of its obligations and duties of the Master Servicer
hereunder; provided, further, that this provision shall not be construed to
entitle the Master Servicer to indemnity in the event that amounts advanced by
the Master Servicer to retire any senior lien exceed Liquidation Proceeds (in
excess of related liquidation expenses) realized with respect to the related
Mortgage Loan. The Master Servicer and any director or officer or 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. The Master Servicer and any director or officer or employee
or agent of the Master Servicer shall be indemnified by the Trust and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of its willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Master Servicer may undertake any such
action which it may deem necessary or desirable in respect of this Agreement,
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder.

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In such event, the reasonable legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust and the Master Servicer shall be entitled to be reimbursed therefor only
pursuant to Section 3.11. The Master Servicer's right to indemnity or
reimbursement pursuant to this Section shall survive any resignation or
termination of the Master Servicer pursuant to Section 6.04 or 7.01 with respect
to any losses, expenses, costs or liabilities arising prior to such resignation
or termination (or arising from events that occurred prior to such resignation
or termination). This paragraph shall apply to the Master Servicer solely in its
capacity as Master Servicer hereunder and in no other capacities.

         Section 6.04 MASTER SERVICER NOT TO RESIGN.

         Subject to the provisions of Section 7.01 and Section 6.02, the Master
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
or its subsidiaries or Affiliates, the other activities of the Master Servicer
so causing such a conflict being of a type and nature carried on by the Master
Servicer or its subsidiaries or Affiliates at the date of this Agreement or (ii)
upon satisfaction of the following conditions: (a) the Master Servicer has
proposed a successor master servicer to the Trustee in writing and such proposed
successor master servicer is reasonably acceptable to the Trustee; and (b) the
Rating Agency shall have delivered a letter to the Trustee prior to the
appointment of the successor master servicer stating that the proposed
appointment of such successor master servicer as Master Servicer hereunder will
not result in the reduction or withdrawal of the then current rating of the
Regular Certificates or the ratings that are in effect; provided, however, that
no such resignation by the Master Servicer shall become effective until such
successor master servicer or, in the case of (i) above, the Trustee shall have
assumed the Master Servicer's responsibilities and obligations hereunder or the
Trustee shall have designated a successor master servicer in accordance with
Section 7.02. Any such resignation shall not relieve the Master Servicer of
responsibility for any of the obligations specified in Sections 7.01 and 7.02 as
obligations that survive the resignation or termination of the Master Servicer.
Any such determination permitting the resignation of the Master Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.

         Section 6.05 DELEGATION OF DUTIES.

         In the ordinary course of business, the Master Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01, including entering into Sub-
Servicing Agreements with Sub-Servicers, for the servicing and administration of
the Mortgage Loans, in accordance with the provisions of Section 3.02. Such
delegation shall not relieve the Master Servicer of its liabilities and
responsibilities with respect to such duties and shall not constitute a
resignation within the meaning of Section 6.04. The Master Servicer shall
provide the Trustee and the Rating Agency with 60 days prior written notice
prior to the delegation of any of its duties to any Person other than any of the
Master Servicer's Affiliates or their respective successors and assigns.

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                                   ARTICLE VII

                                     DEFAULT

         Section 7.01 MASTER SERVICER EVENTS OF TERMINATION.

         (a) If any one of the following events ("Master Servicer Events of
Termination' ) shall occur and be continuing:

                  (i) (A) The failure by the Master Servicer to make any Advance
         (other than a Nonrecoverable Advance); or (B) any other failure by the
         Master Servicer to deposit in the Collection Account or Distribution
         Account any deposit required to be made under the terms of this
         Agreement which continues unremedied for a period of (i) one Business
         Day in the case of any such Advance that was required to be remitted to
         the Trustee or (ii) five Business Days in the case of any such deposit
         that was required to be remitted to the Trustee, provided, that, if the
         Master Servicer cures such failure within the applicable grace period,
         the amounts remitted shall include interest calculated at the
         applicable federal funds rate; or

                  (ii) The failure by the Master Servicer duly to observe or
         perform, in any material respect, any other covenants, obligations or
         agreements of the Master Servicer as set forth in this Agreement, which
         failure continues unremedied for a period of 30 days, after the date
         (A) on which written notice of such failure, requiring the same to be
         remedied, shall have been given to the Master Servicer by the Trustee
         or by any Holder of a Regular Certificate evidencing at least 25% of
         the Voting Rights or (B) actual knowledge of such failure by a
         Servicing Officer of the Master Servicer; or

                  (iii) The entry against the Master Servicer of a decree or
         order by a court or agency or supervisory authority having jurisdiction
         in the premises for the appointment of a trustee, conservator, receiver
         or liquidator in any insolvency, conservatorship, receivership,
         readjustment of debt, marshalling 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 unstayed and in effect for
         a period of 60 days; or

                  (iv) The Master Servicer shall voluntarily go into
         liquidation, consent to the appointment of a conservator or receiver or
         liquidator or similar person in any insolvency, readjustment of debt,
         marshalling of assets and liabilities or similar proceedings of or
         relating to the Master Servicer or of or relating to all or
         substantially all of its property; or a decree or order of a court or
         agency or supervisory authority having jurisdiction in the premises for
         the appointment of a conservator, receiver, liquidator or similar
         person in any insolvency, readjustment of debt, marshalling of assets
         and liabilities or similar proceedings, or for the winding-up or
         liquidation of its affairs, shall have been entered against the Master
         Servicer and such decree or order shall have remained in force
         undischarged, unbonded or unstayed for a period of 60 days; or the
         Master Servicer shall admit in writing its inability to pay its debts
         generally as they become due, file a petition to take advantage of any
         applicable insolvency or reorganization statute, make an assignment for
         the benefit of its creditors or voluntarily suspend payment of its
         obligations;

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         (b) then, and in each and every such case, so long as a Master Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 11:00 A.M., New York time, on the Business Day immediately following the
Master Servicer Remittance Date (provided the Trustee shall give the Master
Servicer, and the Master Servicer shall have received, notice of such failure to
above by 5:00 P.M. New York time on the Master Servicer Remittance Date), the
Trustee shall terminate all of the rights and obligations of the Master Servicer
under this Agreement and the Trustee, or a successor master servicer appointed
in accordance with Section 7.02, shall immediately make such Advance and assume,
pursuant to the terms of Section 7.02, the duties of a successor master servicer
and (y) in the case of (i)(B), (ii), (iii) and (iv) above, the Trustee shall, at
the direction of the Holders of each Class of Regular Certificates evidencing
Percentage Interests aggregating not less than 51%, by notice then given in
writing to the Master Servicer (and to the Trustee if given by Holders of
Certificates), terminate all of the rights and obligations of the Master
Servicer as servicer under this Agreement, to the extent permitted by law, and
in and to the Mortgage Loans and the proceeds thereof. Any such notice to the
Master Servicer shall also be given to the Rating Agency and the Depositor. On
or after the receipt by the Master Servicer (and by the Trustee if such notice
is given by the Holders) of such written notice, all authority and power of the
Master Servicer under this Agreement, whether with respect to the Certificates
or the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee
or duly appointed successor master servicer pursuant to and under this Section;
and, without limitation, the Trustee or duly appointed successor master servicer
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 of each Mortgage Loan and Related
Documents or otherwise. The Master Servicer agrees to cooperate with the Trustee
(or the applicable successor master servicer) in effecting the termination of
the responsibilities and rights of the Master Servicer hereunder, including,
without limitation, the delivery to the Trustee of all documents and records
requested by it to enable it to assume the Master Servicer's functions under
this Agreement within ten Business Days subsequent to such notice, the transfer
within one Business Day subsequent to such notice to the Trustee (or the
applicable successor master servicer) for the administration by it of all cash
amounts that shall at the time be held by the Master Servicer and to be
deposited by it in the Collection Account, the Distribution Account, any REO
Account or any Servicing Account or that have been deposited by the Master
Servicer in such accounts or thereafter received by the Master Servicer with
respect to the Mortgage Loans or any REO Property received by the Master
Servicer. All Transition Costs incurred in connection with transferring the
Mortgage Files to the successor master servicer and amending this Agreement to
reflect such succession as Master Servicer pursuant to this Section shall be
paid by the predecessor Master Servicer (or if the predecessor Master Servicer
is the Trustee, the initial Master Servicer) or by the Trust pursuant to Section
3.11(b)(iv) herein if the Master Servicer does not fulfill its obligations
hereunder within 45 days of presentation of reasonable documentation of such
costs and expenses. For purposes of this Section 7.01, the Trustee shall not be
deemed to have knowledge of a Master Servicer Event of Termination unless a
Responsible Officer of the Trustee assigned to and working in the Trustee's
Corporate Trust Office has actual knowledge thereof or unless written notice of
any event which is in fact such a Master Servicer Event of Termination is
received by the Trustee and such notice references the Certificates, the Trust
Fund or this Agreement.

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         Section 7.02 TRUSTEE TO ACT: APPOINTMENT OF SUCCESSOR.

         (a) Within 90 days of the time the Master Servicer (and the Trustee, if
notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Trustee (or such other successor master servicer as is
approved in accordance with this Agreement) shall be the successor in all
respects to the Master Servicer in its capacity as servicer under this Agreement
and the transactions set forth or provided for herein and shall be subject to
all the responsibilities, duties and liabilities relating thereto placed on the
Master Servicer by the terms and provisions hereof arising on and after its
succession; provided, however, that if the Trustee is prohibited by law or
regulation from obligating itself to make advances regarding delinquent mortgage
loans, then the Trustee shall not be obligated to make Advances pursuant to
Section 4.06; and provided further, it is understood and acknowledged that by
the parties hereto that there will be a period of transition (not to exceed 90
days) before the transfer of servicing obligations is fully effected and that
the Trustee (i) shall be under no obligation to purchase any Mortgage Loan, and
(ii) shall have no obligation whatsoever with respect to any liability (other
than advances deemed recoverable and not previously made) incurred by the Master
Servicer at or prior to the time of termination As compensation therefor, the
Trustee (or such other successor master servicer) shall be entitled to such
compensation as the Master Servicer would have been entitled to hereunder if no
such notice of termination had been given. Notwithstanding the above, (i) if the
Trustee is unwilling to act as successor master servicer or (ii) if the Trustee
is legally unable so to act, or if the Holders of Certificates entitled to at
least 51% of the Voting Rights so request in writing to the Trustee, the Trustee
shall appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan or
home equity loan servicer having a net worth of not less than $50,000,000 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 appointment of any such successor master servicer will not
result in the qualification, reduction or withdrawal of the ratings assigned to
the Certificates or the ratings that are in effect by the Rating Agency as
evidenced by a letter to such effect from the Rating Agency. Pending appointment
of a successor to the Master Servicer hereunder, unless the Trustee is
prohibited by law from so acting, the Trustee shall act in such capacity as
herein above provided. In connection with such appointment and assumption, the
successor shall be entitled to receive compensation out of payments on Mortgage
Loans in an amount equal to the compensation which the Master Servicer would
otherwise have received pursuant to Section 3.18 (or such other compensation as
the Trustee and such successor shall agree, not to exceed the Servicing Fee).
The appointment of a successor master servicer shall not affect any liability of
the predecessor Master Servicer which may have arisen under this Agreement prior
to its termination as Master Servicer to pay any deductible under an insurance
policy pursuant to Section 3.13 or to indemnify the Trustee pursuant to Section
8.05, nor shall any successor master servicer be liable for any acts or
omissions of the predecessor Master Servicer or for any breach by such Master
Servicer of any of its representations or warranties contained herein or in any
related document or agreement. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.

         (b) Any successor, including the Trustee, to the Master Servicer as
servicer shall during the term of its service as master servicer continue to
master service and administer the Mortgage Loans for the benefit of
Certificateholders, and maintain in force a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Master
Servicer hereunder and

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a Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Master Servicer is so required pursuant to Section 3.14.

         (c) In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, in which case the predecessor Master Servicer shall cooperate with the
successor Master Servicer in causing MERS to revise its records to reflect the
transfer of servicing to the successor Master Servicer as necessary under MERS'
rules and regulations, or (ii) the predecessor Master Servicer shall cooperate
with the successor Master Servicer in causing MERS to execute and deliver an
assignment of Mortgage in recordable form to transfer the Mortgage from MERS to
the Trustee and to execute and deliver such other notices, documents and other
instruments as may be necessary or desirable to effect a transfer of such
Mortgage Loan or servicing of such Mortgage Loan on the MERS(R) System to the
successor Master Servicer. The predecessor Master Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Master Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any
assignments of Mortgage that may be required under this subsection (c). The
successor Master Servicer shall cause such assignment to be delivered to the
Trustee promptly upon receipt of the original with evidence of recording thereon
or a copy certified by the public recording office in which such assignment was
recorded.

         Section 7.03 WAIVER OF MASTER SERVICER EVENTS OF TERMINATION.

         The Majority Certificateholders may, on behalf of all
Certificateholders, waive any events permuting removal of the Master Servicer as
servicer pursuant to this Article VII, provided, however, that the Majority
Certificateholders may not waive such events or a Master Servicer Event of
Termination in making a required distribution on a Certificate without the
consent of the Holder of such Certificate. Upon any waiver of a past default,
such default shall cease to exist and any Master Servicer Event of Termination
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto except to the extent expressly so waived.
Notice of any such waiver shall be given by the Trustee to the Rating Agency.

         Section 7.04 NOTIFICATION TO CERTIFICATEHOLDERS.

         (a) Upon any termination or appointment of a successor the Master
Servicer pursuant to this Article VII or Section 6.04, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register and the Rating Agency.

         (b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Master Servicer Event of Termination the Trustee shall be deemed to have actual
knowledge of such Master Servicer Event of Termination five Business Days after
a Responsible Officer of the Trustee becomes aware of the occurrence of such an
event and the Trustee shall transmit by mail to all Certificateholders notice of
such occurrence

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unless such default or Master Servicer Event of Termination shall have been
waived or cured. Such notice shall be given to the Rating Agency promptly after
any such occurrence.

         Section 7.05 SURVIVABILITY OF MASTER SERVICER LIABILITIES.

         Notwithstanding anything herein to the contrary, upon termination of
the Master Servicer hereunder, any liabilities of the Master Servicer which
accrued prior to such termination shall survive such termination.

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                                  ARTICLE VIII

                                   THE TRUSTEE

         Section 8.01 DUTIES OF TRUSTEE.

         The Trustee, prior to the occurrence of a Master Servicer Event of
Termination of which a Responsible Officer of the Trustee shall have actual
knowledge and after the curing of all Master Servicer Events of Termination
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. If a Master Servicer Event of
Termination has occurred (which has not been cured) of which a Responsible
Officer has actual knowledge, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.

         As provided in Section 4.02 hereof, on each Distribution Date, the
Trustee shall provide Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP
level information for each Class of Certificates as of such Distribution Date,
using a format and media mutually acceptable to the Trustee and Bloomberg.

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Master Servicer, the Additional Collateral Servicer or the
Depositor hereunder. If any such instrument is found not to conform in any
material respect to the requirements of this Agreement, the Trustee shall notify
the Certificateholders of such instrument in the event that the Trustee, after
so requesting, does not receive a satisfactorily corrected instrument.

         The Trustee shall prepare and file or cause to be filed on behalf of
the Trust Fund any tax return that is required with respect to the Trust Fund
pursuant to applicable federal, state or local tax laws.

         The Trustee covenants and agrees that it shall perform its obligations
hereunder in a manner so as to maintain the status of the Trust Fund as two
REMICs under the REMIC Provisions and to prevent the imposition of any federal,
state or local income, prohibited transaction, contribution or other tax on the
Trust Fund to the extent that maintaining such status and avoiding such taxes
are within the control of the Trustee and are within the commercially reasonable
scope of specific responsibilities under this Agreement.

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

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

                  (ii) the Trustee shall not be personally liable for an error
         of judgment made in good faith by a Responsible Officer of the Trustee,
         unless it shall be proved by a court of competent jurisdiction that the
         Trustee was negligent in ascertaining or investigating the facts
         related thereto;

                  (iii) the Trustee shall not be personally liable with respect
         to any action taken, suffered or omitted to be taken by it in good
         faith in accordance with the direction of the Majority
         Certificateholders relating to the time, method and place of conducting
         any proceeding for any remedy available to the Trustee, or exercising
         or omitting to exercise any trust or power conferred upon the Trustee,
         under this Agreement; and

                  (iv) the Trustee shall not be charged with knowledge of any
         failure by the Master Servicer to comply with the obligations of the
         Master Servicer referred to in clauses (i) and (ii) of Section 7.01 or
         any Master Servicer Event of Termination unless a Responsible Officer
         of the Trustee at the Corporate Trust Office obtains actual knowledge
         of such failure or the Trustee receives written notice of such failure
         from the Master Servicer or the Majority Certificateholders. In the
         absence of such receipt of such notice, the Trustee may conclusively
         assume that there is no Master Servicer Event of Termination.

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

         The Trustee shall not complete foreclosure proceedings, or accept a
deed in lieu of foreclosure, with respect to any Mortgage Loan, unless the
Trustee has been supplied with an Opinion of Counsel to the effect that if the
related Mortgaged Property is acquired by the Trust, such Mortgaged Property
from such Mortgage will qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code. In the event that the Trustee acquires
possession of any Mortgaged Property in spite of the foregoing, the Trustee
shall dispose of the acquired Mortgaged Property as expeditiously as possible.

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         The Trustee shall have no duty (A) to see any recording, filing, or
depositing of this Agreement or any agreement referred to herein or any
financing statement or continuation statement evidencing a security interest, or
to see to the maintenance of any such recording or filing or depositing or to
any rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance or (C) to see to the payment or discharge of any tax, assessment, or
other governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Trust Fund other than
from funds available in the Distribution Account to confirm or verify the
contents of any reports or certificates of the Master Servicer or the Additional
Collateral Servicer delivered to the Trustee pursuant to this Agreement believed
by the Trustee to be genuine and to have been signed or presented by the proper
party or parties.

         Section 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.

         (a) Except as otherwise provided in Section 8.01:

                  (i) the Trustee may request and conclusively rely upon, and
         shall be fully protected in acting or refraining from acting upon, any
         resolution, Officer's Certificate, certificate of auditors or any other
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, appraisal, bond or other paper or document reasonably
         believed by it to be genuine and to have been signed or presented by
         the proper party or parties;

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

                  (iii) the Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Agreement, or to
         institute, conduct or defend any litigation hereunder or in relation
         hereto, at the request, order or direction 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; the right of the Trustee to perform
         any discretionary act enumerated in this Agreement shall not be
         construed as a duty, and the Trustee shall not be answerable for other
         than its negligence or willful misconduct in the performance of any
         such act;

                  (iv) the Trustee shall not be personally 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) prior to the occurrence of a Master Servicer Event of
         Termination and after the curing of all Master Servicer Events of
         Termination which may have occurred, the Trustee shall not be bound to
         make any investigation into the facts or matters stated in any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, consent, order, approval, bond or other paper or
         documents, unless requested in writing to do so by the Majority
         Certificateholder; provided, however, that if the payment within a
         reasonable time to the Trustee of the costs, expenses or liabilities
         likely to be incurred by it in the making of

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         such investigation is, in the opinion of the Trustee, not reasonably
         assured to the Trustee by the security afforded to it by the terms of
         this Agreement, the Trustee may require reasonable indemnity against
         such cost, expense or liability as a condition to such proceeding. The
         reasonable expense of every such examination shall be paid by the
         Master Servicer or, if paid by the Trustee, shall be reimbursed by the
         Master Servicer upon demand. Nothing in this clause (v) shall derogate
         from the obligation of the Master Servicer to observe any applicable
         law prohibiting disclosure of information regarding the Mortgagors;

                  (vi) the Trustee shall not be accountable, shall have no
         liability and makes no representation as to any acts or omissions
         hereunder of the Master Servicer until such time as the Trustee may be
         required to act as Master Servicer pursuant to Section 7.02;

                  (vii) the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys or a custodian and the Trustee shall not be
         responsible for any misconduct or negligence on the part of any such
         agent, attorney or custodian appointed by the Trustee with due care;
         and

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

         Section 8.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.

         The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Master Servicer, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or Related Document, or of MERS or the MERS(R) System. The Trustee
shall not be accountable for the use or application by the Master Servicer, or
for the use or application of any funds paid to the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Master Servicer. The Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Mortgage or any Mortgage Loan, or the perfection and priority of any
Mortgage or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Trust or its ability to generate the payments
to be distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than if
the Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02); the validity of the assignment of any Mortgage Loan to the Trustee or of
any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 7.02); the
compliance by the Depositor or the Master Servicer with any warranty or
representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation prior to the Trustee's receipt
of notice or other discovery of any noncompliance therewith or any breach
thereof, any investment of monies by or at the direction of the Master Servicer
or any loss resulting therefrom, it being understood that the Trustee shall
remain responsible for any Trust property that it may hold in its individual
capacity; the acts or omissions

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of any of the Master Servicer (other than if the Trustee shall assume the duties
of the Master Servicer pursuant to Section 7.02), any Sub-Servicer or any
Mortgagor, any action of the Master Servicer (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 7.02), or any
Sub-Servicer taken in the name of the Trustee; the failure of the Master
Servicer or any Sub- Servicer to act or perform any duties required of it as
agent of the Trustee hereunder; or any action by the Trustee taken at the
instruction of the Master Servicer (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 7.02); provided, however, that
the foregoing shall not relieve the Trustee of its obligation to perform its
duties under this Agreement. The Trustee shall have no responsibility for filing
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
master servicer).

         Section 8.04 TRUSTEE MAY OWN CERTIFICATES.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the Master
Servicer, the Depositor or their Affiliates.

         Section 8.05 MASTER SERVICER TO PAY TRUSTEE EXPENSES; TRUSTEE FEES.

         On each Distribution Date, the Trustee shall be entitled to withdraw
from the Distribution Account as compensation hereunder the Trustee Fees. The
Master Servicer will pay or reimburse the Trustee (or, if the Master Servicer
does not fulfill its obligations hereunder, the Trust Fund will reimburse
pursuant to Section 3.11(b)(ii) herein) within 30 days upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
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 which is the
responsibility of the Trustee hereunder. In addition, the Master Servicer
covenants and agrees to indemnify the Trustee (or, if the Master Servicer does
not fulfill its obligations hereunder within 30 days upon the Trustee's request,
the Trust Fund will indemnify pursuant to Section 3.11(b)(ii) herein) and its
officers, directors, employees and agents from, and hold it harmless against,
any and all losses, liabilities, damages, claims or expenses incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence of the Trustee in the performance of its
duties hereunder or by reason of the Trustee's reckless disregard of obligations
and duties hereunder. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee be liable for special, indirect
or consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Trustee has been advised of the likelihood
of such loss or damage and regardless of the form of action. The Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified, by the
Trust Fund and held harmless against any loss, liability or expense (not
including expenses, disbursements and advances incurred or made by the Trustee,
including the compensation and the expenses and disbursements of its agents and
its counsel, in the ordinary course of the Trustee's performance of its regular
duties in accordance with the provisions of this Agreement) incurred by the
Trustee or such party arising out of or in connection with the acceptance or
administration of its duties under this Agreement, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance by the Trustee of its

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duties under this Agreement or by reason of the reckless disregard of the
Trustee's obligations and duties under this Agreement. This section shall
survive termination of this Agreement or the resignation or removal of any
Trustee hereunder.

         Section 8.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.

         The Trustee hereunder shall be a corporation or a national banking
association, and duly organized and validly existing under the laws of the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and a minimum long-term debt rating of Baa3 by Moody's
Investors Service, Inc. and a short-term rating of at least A-1 by S&P and A by
Fitch, and subject to supervision or examination by federal or state authority.
If such entity 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 8.06, the combined capital and surplus of such
entity shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. The principal office of the
Trustee (other than the initial Trustee) shall be in a state with respect to
which an Opinion of Counsel has been delivered to such Trustee at the time such
Trustee is appointed Trustee to the effect that the Trust will not be a taxable
entity under the laws of such state. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 8.06, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07.

         Section 8.07 RESIGNATION OR REMOVAL OF TRUSTEE.

         The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Master
Servicer and the Rating Agency. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor Trustee. If no successor Trustee shall
have been so appointed and having accepted appointment within 60 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.

         If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee. If the Depositor or the Master Servicer
removes the Trustee under the authority of the immediately preceding sentence,
the Depositor shall promptly appoint a successor Trustee by written instrument,
in duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor Trustee.

         The Majority Certificateholders may at any time remove the Trustee by
written instrument or instruments delivered to the Master Servicer, the
Depositor and the Trustee; the Depositor shall thereupon use its best efforts to
appoint a successor Trustee in accordance with this Section.

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         Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.08.

         Section 8.08 SUCCESSOR TRUSTEE.

         Any successor Trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor, the Rating Agency, the Master
Servicer and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective, and such successor Trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee. The Depositor, the Master Servicer and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties and
obligations.

         No successor Trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor Trustee shall not result in a downgrading of the Regular Certificates
by either Rating Agency, as evidenced by a letter from the Rating Agency.

         Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment of
a successor Trustee hereunder to all Holders of Certificates at their addresses
as shown in the Certificate Register and to the Rating Agency.

         Section 8.09 MERGER OR CONSOLIDATION OF TRUSTEE.

         Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, 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 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

         Notwithstanding any other provisions of this Agreement, at anytime, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust or any Mortgaged Property 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 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 and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Master Servicer and the Trustee may consider necessary
or desirable. Any such co-trustee or separate trustee shall be subject to the
written approval of the Master Servicer. If the Master Servicer shall not have

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joined in such appointment within 15 days after the receipt by it of a request
so to do, or in the case a Master Servicer Event of Termination shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 8.06, and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08. The Master Servicer shall be
responsible for the fees of any co-trustee or separate trustee appointed
hereunder.

         Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

                  (i) all rights, powers, duties and obligations conferred or
         imposed upon the Trustee shall be conferred or imposed upon and
         exercised or performed by the Trustee and such separate trustee or
         co-trustee jointly (it being understood that such separate trustee or
         co-trustee is not authorized to act separately without the Trustee
         joining in such act), 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
         singly by such separate trustee or co-trustee, but solely at the
         direction of the Trustee;

                  (ii) no trustee hereunder shall be held personally liable by
         reason of any act or omission of any other trustee hereunder; and

                  (iii) the Master Servicer and the Trustee, acting jointly may
         at any time accept the resignation of or remove any separate trustee or
         co-trustee except that following the occurrence of a Master Servicer
         Event of Termination, the Trustee acting alone may accept the
         resignation or remove any separate trustee or co-trustee.

         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 VIII. 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 and a copy thereof given to the
Depositor, the Rating Agency and the Master Servicer.

         Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of 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.

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         Section 8.11 LIMITATION OF LIABILITY.

         The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by the Trust Agreement. Each of the
undertakings and agreements made on the part of the Trustee in the Certificates
is made and intended not as a personal undertaking or agreement by the Trustee
but is made and intended for the purpose of binding only the Trust.

         Section 8.12 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
                      CERTIFICATES.

         (a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.

         (b) The Trustee shall afford the Depositor, the Master Servicer and
each Certificateholder upon reasonable notice during normal business hours,
access to all records maintained by the Trustee in respect of its duties
hereunder and access to officers of the Trustee responsible for performing such
duties. The Trustee shall cooperate fully with the Master Servicer, the
Depositor and such Certificateholder and shall make available to the Master
Servicer, the Depositor and such Certificateholder for review and copying at the
expense of the party requesting such copies, such books, documents or records as
may be requested with respect to the Trustee's duties hereunder. The Depositor,
the Master Servicer and the Certificateholders shall not have any responsibility
or liability for any action or failure to act by the Trustee and are not
obligated to supervise the performance of the Trustee under this Agreement or
otherwise.

         Section 8.13 SUITS FOR ENFORCEMENT.

         In case a Master Servicer Event of Termination or other default by the
Master Servicer or the Depositor hereunder shall occur and be continuing, the
Trustee may proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.

         Section 8.14 WAIVER OF BOND REQUIREMENT.

         The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.

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         Section 8.15 WAIVER OF INVENTORY. ACCOUNTING AND APPRAISAL REQUIREMENT.

         The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.

         Section 8.16 RIGHT OF TRUSTEE IN CAPACITY OF CERTIFICATE REGISTRAR OR
                      PAYING AGENT.

         In the event that the Trustee is also acting in the capacity of Paying
Agent or Certificate Registrar hereunder, the rights, protections, indemnities
and immunities afforded to the Trustee pursuant to this Article VIII shall also
be afforded to the Trustee in its capacity as Paying Agent or Certificate
Registrar.

         Section 8.17 PERIODIC FILINGS.

                  The Trustee shall, on behalf of the Trust Fund, prepare, sign
(as trustee for the Trust Fund) and cause to be filed with the Commission on a
timely basis any periodic reports required to be filed under the provisions of
the Exchange Act, and the rules and regulations of the Commission thereunder;
provided, however, that any annual report of the Depositor on Form 10-K shall be
signed by the Chief Executive Officer of the Master Servicer on behalf of the
Depositor and in respect of the Trust Fund. The Trustee shall provide copies of
all such reports to the Depositor for approval prior to filing. In connection
with the preparation and filing of such periodic reports, the Depositor and the
Master Servicer shall timely provide to the Trustee all material information
available to them which is required to be included in such reports. Prior to
January 30 of the first year in which the Trustee is able to do so under
applicable law, the Trustee shall file a Form 15 Suspension Notification with
respect to the Trust Fund. Any Form 10-K filed with the Commission in connection
with this Section 8.17 shall include a certification, signed by the Chief
Executive Officer of the Master Servicer, in the form attached as Exhibit M
hereto or such other form as may be required or permitted by the Commission (the
"Form 10-K Certification"), in compliance with Rule 13a-14 and 15d-14 under the
Exchange Act and any additional directives of the Commission. In connection with
the Form 10-K Certification, the Trustee shall provide the Master Servicer with
a back-up certification substantially in the form attached hereto as Exhibit N.

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                                   ARTICLE IX

                              REMIC ADMINISTRATION

         Section 9.01 REMIC ADMINISTRATION.

         (a) The Trustee shall make elections to treat the Trust Fund as two
REMICs under the Code and, if necessary, under applicable state law. Each such
election will be made on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued. For
the purposes of the REMIC elections in respect of the Trust Fund, the REMIC I
Regular Interests shall be designated as the "regular interests" in REMIC I, the
Class R-I Certificates shall be designated as the sole class of "residual
interest" in REMIC I, the Regular Certificates (other than the Class A-7
Certificates), the Class A-7A Component and the Class A-7B Component shall be
designated as the "regular interests" in REMIC II, and the Class R-II
Certificates shall be designated as the sole class of "residual interest" in
REMIC II. The Class A-7 Certificates shall represent ownership of the Class A-7A
Component and the Class A-7B Component. The Master Servicer and the Trustee
shall not permit the creation of any "interests" (within the meaning of Section
860G of the Code) in any REMIC other than the Regular Certificates (other than
the Class A-7 Certificates), the Class A-7A Component, the Class A-7B Component,
and the Class R Certificates. Within 30 days after the Closing Date, the Trustee
shall prepare and file with the Internal Revenue Service Form 8811, "Information
Return for Real Estate Mortgage Investment Conduits (REMIC) and Issuers of
Collateralized Debt Obligations" for each REMIC.

         The Trustee will apply for an Employee Identification Number from the
IRS via form SS-4 or any other acceptable method for all tax entities.

         (b) The Closing Date is hereby designated as the "Startup Day" of the
Trust Fund within the meaning of Section 860G(a)(9) of the Code.

         (c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of the Trust Fund
other than the expense of obtaining any tax related Opinion of Counsel except as
specified herein and except that the Trustee shall be entitled to be reimbursed
from the Collection Account for any professional fees and expenses related to
any non-routine audits or any administrative or judicial proceedings that do not
result from any breach of its tax duties under this Section 9.01. The Trustee,
as agent for the Trust Fund's Tax Matters Person, shall (i) act on behalf of the
Trust Fund in relation to any tax matter or controversy involving the Trust Fund
and (ii) represent the Trust Fund in any administrative or judicial proceeding
relating to an examination or audit by any governmental taxing authority with
respect thereto. By their acceptance thereof, the holder of the largest
Percentage Interest of the Residual Certificates of each REMIC shall be
designated as the Tax Matters Person (as defined in the REMIC Provisions) hereby
agrees to irrevocably appoint the Trustee or an Affiliate as its agent to
perform all of the duties of the Tax Matters Person for each REMIC.

         (d) The Trustee shall prepare, sign and file all of the Tax Returns in
respect of each REMIC created hereunder. The expenses of preparing and filing
such returns shall be borne by the Trustee without any right of reimbursement
therefor. The Master Servicer shall provide on a timely

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basis to the Trustee or its designee such information with respect to the assets
of the Trust Fund as is in its possession and reasonably required by the Trustee
to enable it to perform its obligations under this Article IX.

         (e) The Trustee shall perform on behalf of the Trust Fund all reporting
and other tax compliance duties that are the responsibility of the Trust Fund
under the Code, the REMIC Provisions or other compliance guidance issued by the
Internal Revenue Service or any state or local taxing authority. Among its other
duties, as required by the Code, the REMIC Provisions or other such compliance
guidance, the Trustee shall provide (i) to any Transferor of a Residual
Certificate, at such Transferor's expense, such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any Person who is not a Permitted Transferee, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium and (iii) to the Internal Revenue Service the name, title,
address and telephone number of the person who will serve as the representative
of the Trust Fund. The Master Servicer shall provide on a timely basis to the
Trustee such information with respect to the assets of the Trust Fund,
including, without limitation, the Mortgage Loans, as is in its possession and
reasonably required by the Trustee to enable it to perform its obligations under
this subsection. In addition, the Depositor shall provide or cause to be
provided to the Trustee, within ten (10) days after the Closing Date, all
information or data that the Trustee reasonably determines to be relevant for
tax purposes as to the valuations and issue prices of the Certificates,
including, without limitation, the price, yield, prepayment assumption and
projected cash flow of the Certificates.

         (f) To the extent that the affairs of the Trust Fund are within its
control and the scope of its specific responsibilities under this Agreement, the
Trustee shall take such action and shall cause the Trust Fund created hereunder
to take such action as shall be necessary to create or maintain the status
thereof as two REMICs under the REMIC Provisions (and the Master Servicer shall
assist it, to the extent reasonably requested by it). The Trustee shall not
knowingly take any action, cause the Trust Fund to take any action or fail to
take (or fail to cause to be taken) any action that, under the REMIC Provisions,
if taken or not taken, as the case may be, could (i) endanger the status of the
Trust Fund as two REMICs or (ii) result in the imposition of a tax upon the
Trust Fund (including but not limited to the tax on prohibited transactions as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code) (either such event, an "Adverse
REMIC Event") unless the Trustee has received an Opinion of Counsel, addressed
to the Trustee (at the expense of the party seeking to take such action but in
no event at the expense of the Trustee) to the effect that the contemplated
action will not, with respect to the Trust Fund created hereunder, endanger such
status or result in the imposition of such a tax, nor shall the Master Servicer
take or fail to take any action (whether or not authorized hereunder) as to
which the Trustee has advised it in writing that it has received an Opinion of
Counsel to the effect that an Adverse REMIC Event could occur with respect to
such action. In addition, prior to taking any action with respect to the Trust
Fund or the assets of the Trust Fund, or causing the Trust Fund to take any
action, which is not contemplated under the terms of this Agreement, the Master
Servicer will consult with counsel with respect to whether such action could
cause an Adverse REMIC Event to occur with respect to the Trust Fund, and the
Master Servicer shall not take any such action or cause the Trust Fund to take
any such action as to which counsel has advised it in writing that an Adverse
REMIC Event could occur. The Trustee may consult with counsel to make such
written advice, and

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the cost of same shall be borne by the party seeking to take the action not
permitted by this Agreement, but in no event shall such cost be an expense of
the Trustee.

         (g) In the event that any tax is imposed on "prohibited transactions"
of the Trust Fund created hereunder as defined in Section 860F(a)(2) of the
Code, on the "net income from foreclosure property" of either REMIC as defined
in Section 860G(c) of the Code, on any contributions to the Trust Fund after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 9.03 hereof, if
such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article IX, (ii) to the Master Servicer pursuant to
Section 9.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article IX,
or otherwise, (iii) to the Master Servicer as provided in Section 3.05 and (iv)
against amounts on deposit in the Distribution Account and shall be paid by
withdrawal therefrom to the extent not required to be paid by the Master
Servicer or the Trustee pursuant to another provision of this Agreement.

         (h) On or before April 15 of each calendar year, commencing April 15,
2005, the Trustee shall deliver to the Master Servicer and the Rating Agency a
Certificate from a Responsible Officer of the Trustee stating (without regard to
any action taken by any party other than the Trustee) the Trustee's compliance
with this Article IX.

         (i) The Trustee shall, for federal income tax purposes, maintain books
and records with respect to the Trust Fund on a calendar year and on an accrual
basis.

         (j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to the Trust Fund other than in connection with any
Eligible Substitute Mortgage Loan delivered in accordance with Section 2.03
unless it shall have received an Opinion of Counsel (which shall be at the
expense of the party requesting to make such contribution and not at the expense
of the Trustee) to the effect that the inclusion of such assets in the Trust
Fund will not cause the Trust Fund to fail to qualify as two REMICs at any time
that any Certificates are outstanding or subject the Trust Fund to any tax under
the REMIC Provisions or other applicable provisions of federal, state and local
law or ordinances.

         (k) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which the Trust Fund will receive a fee or other compensation for
services nor knowingly permit the Trust Fund to receive any income from assets
other than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code.

         Section 9.02 PROHIBITED TRANSACTIONS AND ACTIVITIES.

         None of the Depositor, the Master Servicer or the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of the
Trust Fund pursuant to Article X of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), nor acquire any assets for the Trust Fund
(other than REO Property acquired in respect of a defaulted Mortgage Loan), nor

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sell or dispose of any investments in the Custodial Account or the Distribution
Account for gain, nor accept any contributions to the Trust Fund after the
Closing Date (other than an Eligible Substitute Mortgage Loan delivered in
accordance with Section 2.03), unless it has received an Opinion of Counsel,
addressed to the Trustee (at the expense of the party seeking to cause such
sale, disposition, substitution, acquisition or contribution but in no event at
the expense of the Trustee) that such sale, disposition, substitution,
acquisition or contribution will not (a) affect adversely the status of the
Trust Fund as two REMICs or (b) cause the Trust Fund to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.

         Section 9.03 MASTER SERVICER AND TRUSTEE INDEMNIFICATION.

         (a) The Trustee agrees to indemnify the Trust Fund, the Depositor, and
the Master Servicer for any taxes and costs including, without limitation, any
reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Depositor or the Master Servicer, as a result of a breach of the Trustee's
covenants set forth in this Article IX, subject, however, to the provision of
Sections 8.01 and 8.02 of this Agreement.

         (b) The Master Servicer agrees to indemnify the Trust Fund, the
Depositor and the Trustee for any taxes and costs including, without limitation,
any reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor or the Trustee, as a result of a breach of the Master Servicer's
covenants set forth in Article III or this Article IX.

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<PAGE>

                                    ARTICLE X

                                   TERMINATION

         Section 10.01 TERMINATION.

         (a) The respective obligations and responsibilities of the Master
Servicer, the Depositor and the Trustee created hereby (other than the
obligation of the Trustee to make certain payments to Certificateholders after
the final Distribution Date and the obligation of the Master Servicer to send
certain notices as hereinafter set forth) shall terminate upon notice to the
Trustee upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balance of each Class of Certificates has been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust,
and (iii) the optional purchase by the Master Servicer of the Mortgage Loans as
described below. Notwithstanding the foregoing, in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of
the United States to the Court of St. James's, living on the date hereof.

         The Master Servicer may, at its option, terminate this Agreement on any
date on which the Loan Balance is less than 5% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date or by purchasing, on the
next succeeding Distribution Date, all of the outstanding Mortgage Loans and REO
Properties at a price equal to the sum of the outstanding Stated Principal
Balance of the Mortgage Loans (or the fair market value of the related
underlying Mortgaged Property with respect to any REO Properties, if such fair
market value is less than such outstanding Stated Principal Balance) and accrued
and unpaid interest thereon at the weighted average of the Loan Rates through
the end of the Due Period preceding the final Distribution Date plus
unreimbursed Servicing Advances, Advances and any unpaid Servicing Fees
allocable to such Mortgage Loans and REO Properties (the "Termination Price").
The Termination Price paid by the Master Servicer shall also include any amounts
owed by Cendant Mortgage pursuant to the last paragraph of Section 3.2(a) of the
Mortgage Loan Purchase Agreement in respect of any liability, penalty or expense
that resulted from a breach of the representation and warranty set forth in
clause (xlvi) of such Section, that remain unpaid on the date of such purchase.

         In connection with any such purchase pursuant to the preceding
paragraph, the Master Servicer shall deposit in the Distribution Account all
amounts then on deposit in the Collection Account (less amounts permitted to be
withdrawn by the Master Servicer pursuant to Section 3.10), which deposit shall
be deemed to have occurred immediately preceding such purchase.

         Any such purchase shall be accomplished by deposit into the
Distribution Account on the Determination Date before such Distribution Date of
the Termination Price and the delivery of an opinion of counsel that such
termination is a "qualified liquidation" under Section 860F of the Code.

         (b) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee upon the Trustee receiving notice of such date from the Master Servicer,
by letter to the Certificateholders mailed not earlier than the 15th day and not
later than the 25th day of

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<PAGE>

the month next preceding the month of such final distribution specifying (1) the
Distribution Date upon which final distribution of the Certificates will be made
upon presentation and surrender of such Certificates at the office or agency of
the Trustee therein designated, (2) the amount of any such final distribution
and (3) that the Record Date otherwise applicable to such Distribution Date is
not applicable, distributions being made only upon presentation and surrender of
the Certificates at the office or agency of the Trustee therein specified.

         (c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holder of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Section 4.01 for such
Distribution Date.

         (d) In the event that all Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate servicing account for
the benefit of such Certificateholders, and the Master Servicer (if the Master
Servicer has exercised its right to purchase the Mortgage Loans) or the Trustee
(in any other case) shall give a second written notice to the remaining
Certificateholders, to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within nine months after the
second notice all the Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets which remain subject hereto, and the Trustee upon
transfer of such funds shall be discharged of any responsibility for such funds,
and the Certificateholders shall look to the Class R Certificateholders for
payment.

         Section 10.02 ADDITIONAL TERMINATION REQUIREMENTS.

         (a) In the event that the Master Servicer exercises its purchase option
as provided in Section 10.01, the Trust Fund shall be terminated in accordance
with the following additional requirements, unless the Trustee shall have been
furnished with an Opinion of Counsel to the effect that the failure of the Trust
to comply with the requirements of this Section will not (i) result in the
imposition of taxes on "prohibited transactions" of the Trust as defined in
Section 860F of the Code or (ii) cause the Trust Fund constituting part of the
Trust Fund to fail to qualify as two REMICs at any time that any Certificates
are outstanding:

                  (i) Within 90 days prior to the final Distribution Date, the
         Trustee shall adopt and sign a plan of complete liquidation of the
         Trust Fund meeting the requirements of a "qualified liquidation" under
         Section 860F of the Code and any regulations thereunder;

                  (ii) At or after the time of adoption of such a plan of
         complete liquidation and at or prior to the final Distribution Date,
         the Trustee shall sell all of the assets of the Trust to the Master
         Servicer for cash pursuant to the terms of the plan of complete
         liquidation; and

                  (iii) At the time of the making of the final payment on the
         Certificates, the Trustee shall distribute or credit, or cause to be
         distributed or credited (A) to the Holders of each of

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<PAGE>

         the Class A Certificates and Class B Certificates, an amount equal to
         the sum of the related Certificate Principal Balance and one month's
         interest thereon at the applicable Pass- Through Rate, and (B) to the
         Class R Certificateholders, all cash on hand after such payment to the
         Class A Certificateholders and Class B Certificateholders (other than
         cash retained to meet claims) and the Trust shall terminate at such
         time.

         (b) By their acceptance of Certificates, the Holder thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) adopt such a plan
of complete liquidation (and the Certificateholders hereby appoint the Trustee
as their attorney in fact to sign such plan) as appropriate and (ii) to take
such other action in connection therewith as may be reasonably required to carry
out such plan of complete liquidation all in accordance with the terms hereof.

                                       123

<PAGE>

                                   ARTICLE XI

                                   [RESERVED]

                                       124

<PAGE>

                                   ARTICLE XII

                            MISCELLANEOUS PROVISIONS

         Section 12.01 AMENDMENT.

         This Agreement may be amended from time to time by the Depositor, the
Master Servicer and the Trustee; and without the consent of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein or (iii) 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 any such action listed
in clause (i) through (iii) above shall not adversely affect in any respect the
interests of any Certificateholder, as evidenced by (i) notice in writing to the
Depositor, the Master Servicer and the Trustee from the Rating Agency that such
action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency,
or (ii) an Opinion of Counsel delivered to the Master Servicer and the Trustee.

         In addition, this Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Majority
Certificateholders 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 Holders of Certificates; provided,
however, that no such amendment or waiver shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates which are
required to be made on any Certificate without the consent of the Holder of such
Certificate, (y) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (x) above, without the consent of the Holders of Certificates of such
Class evidencing at least a 66% Percentage Interest in such Class, or (z) reduce
the percentage of Voting Rights required by clause (y) above without the consent
of the Holders of all Certificates of such Class then outstanding. Upon approval
of an amendment, a copy of such amendment shall be sent to the Rating Agency.
Prior to the execution of any amendment to this Agreement, the Trustee shall be
entitled to receive and rely upon an Opinion of Counsel (at the expense of the
Person seeking such amendment) stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement.

         Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense of)
the Person seeking such Amendment, to the effect that such amendment will not
result in the imposition of a federal tax on the Trust Fund pursuant to the
REMIC Provisions or cause the Trust Fund constituting part of the Trust to fail
to qualify as two REMICs at any time that any Certificates are outstanding and
that the amendment is being made in accordance with the terms hereof.

         Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Master Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and

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<PAGE>

the Opinion of Counsel referred to in the immediately preceding paragraph to the
Master Servicer and the Rating Agency.

         It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment;
instead it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.

         The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this 11.01 Section that affects its rights, duties and
immunities under this Agreement or otherwise.

         Section 12.02 RECORDATION OF AGREEMENT: COUNTERPARTS.

         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
Master Servicer at the expense of the Trust, but only upon direction of
Certificateholders, accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects 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 together constitute but
one and the same instrument.

         Section 12.03 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.

         The death or incapacity of any Certificateholder shall not (i) operate
to terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or hens to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

         Except as expressly provided for herein, no Certificateholder 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 constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder 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.

         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 or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights 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

                                       126

<PAGE>

to the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee for
15 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. It
is understood and intended, and expressly covenanted by each Certificateholder
with every other Certificateholder and the Trustee, that no one or more Holders
of Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, 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 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

         Section 12.04 GOVERNING LAW: JURISDICTION.

         This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the light to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.

         Section 12.05 NOTICES.

         All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, or by express delivery service, to (a) in the
case of the Sellers: (i) Cendant Mortgage Corporation, 3000 Leadenhall Road, Mt.
Laurel, New Jersey 08054 or (ii) Bishop's Gate Residential Mortgage Trust, c/o
Cendant Mortgage Corporation, 3000 Leadenhall Road, Mt. Laurel, New Jersey
08054, or such other address or telecopy number as may be furnished to the
Master Servicer and the Trustee in writing by either Seller; (b) in the case of
the Trustee: Citibank, N.A., 111 Wall Street, 14th Floor, New York, New York
10005, Attention: CDMC Series 2004-3, or such other address as may hereafter be
furnished to the Depositor, the Sellers and the Master Servicer in writing by
the Trustee; (c) in the case of the Depositor: Cendant Mortgage Capital LLC,
3000 Leadenhall Road, Mail Stop LGL, Mt. Laurel, New Jersey 08054, Attention:
General Counsel, or such other address or telecopy number as may be furnished to
the Sellers, the Master Servicer and the Trustee in writing by the Depositor;
(d) in the case of the Master Servicer: Cendant Mortgage Corporation, 3000
Leadenhall Road, Mail Stop LGL, Mt. Laurel, New Jersey 08054, or such other
address as maybe furnished to the Sellers, the Depositor and the Trustee in
writing by the Master Servicer; and (e) in the case of Fitch, Fitch Ratings, One
State Street Plaza, New York, New York 10004. Any notice required or permitted
to be mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register.
Notice of any Master Servicer

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<PAGE>

Default shall be given by telecopy and by certified mail. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have duly been given when mailed, whether or not the Certificateholder receives
such notice. A copy of any notice required to be telecopied hereunder shall also
be mailed to the appropriate party in the manner set forth above.

         Section 12.06 SEVERABILITY OF PROVISIONS.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall for any reason whatsoever be 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.

         Section 12.07 ARTICLE AND SECTION REFERENCES.

         All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.

         Section 12.08 NOTICE TO THE RATING AGENCY.

         (a) Each of the Trustee and the Master Servicer shall be obligated to
use its best reasonable efforts promptly to provide notice to the Rating Agency
with respect to each of the following of which a Responsible Officer of the
Trustee or Master Servicer, as the case may be, has actual knowledge:

                  (i) any material change or amendment to this Agreement;

                  (ii) the occurrence of any Master Servicer Event of
         Termination that has not been cured or waived;

                  (iii) the resignation or termination of the Master Servicer or
         the Trustee;

                  (iv) the final payment to Holders of the Certificates of any
         Class;

                  (v) any change in the location of any Account; and

                  (vi) if the Trustee is acting as successor master servicer
         pursuant to Section 7.02 hereof, any event that would result in the
         inability of the Trustee to make Advances.

         (b) In addition, (i) the Trustee shall promptly furnish to the Rating
Agency copies of each Statement to Certificateholders described in Section 4.06
hereof; and

                  (i) the Master Servicer shall promptly furnish to the Rating
         Agency copies of the following:

                                    (A) each annual statement as to compliance
                           described in Section 3.19 hereof;

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<PAGE>

                                    (B) each annual independent public
                           accountants' servicing report described in Section
                           3.20 hereof; and

                                    (C) each notice delivered pursuant to
                           Section 7.01 (a) hereof which relates to the fact
                           that the Master Servicer has not made an Advance.

         Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to Fitch
Ratings, One State Street Plaza, New York, New York 10004.

         Section 12.09 FURTHER ASSURANCES.

         Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.

         Section 12.10 BENEFITS OF AGREEMENT.

         Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Certificateholders and the parties
hereto and their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Agreement.

         Section 12.11 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 the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Master
Servicer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "act" of the
Certificateholders signing such instrument or instruments. 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 Trust, if made in the manner provided in this Section 12.11.

         (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 the 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. Whenever
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 authority.

         (c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every

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<PAGE>

Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Trustee or the Trust in reliance thereon, whether or not notation
of such action is made upon such Certificate.

                                       130

<PAGE>

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

                                        CENDANT MORTGAGE CAPITAL LLC, as
                                        Depositor

                                        By: /s/ Joseph Suter
                                            ------------------------------------
                                        Name:   Joseph Suter
                                        Title:  Senior Vice President

                                        CENDANT MORTGAGE CORPORATION,
                                        as Master Servicer

                                        By: /s/ Richard Bradfield
                                            ------------------------------------
                                        Name:   Richard Bradfield
                                        Title:  Vice President

                                        CITIBANK, N.A., as Trustee

                                        By: /s/ Kristen Driscoll
                                            ------------------------------------
                                        Name:   Kristen Driscoll
                                        Title:  Vice President

                                       131

<PAGE>

STATE OF NEW JERSEY     )
                        ) ss.:
COUNTY OF BURLINGTON    )

         On the 27th day of May, 2004 before me, a notary public in and for said
State, personally appeared Joseph Suter known to me to be a Senior Vice
President of Cendant Mortgage Capital LLC, a Delaware limited liability company
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said limited liability company, and acknowledged to me
that such limited liability company 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

                                                _________________________

                                       132

<PAGE>

STATE OF NEW JERSEY     )
                        )ss.:
COUNTY OF BURLINGTON    )

         On the 27th day of May, 2004 before me, a notary public in and for said
State, personally appeared Richard Bradfield known to me to be a Vice President
of Cendant Mortgage Corporation, a New Jersey corporation, that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said limited liability company, and acknowledged to me that such
limited liability company 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

                                                _________________________

                                       133

<PAGE>

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

         On the 27th day of May, 2004 before me, a notary public in and for said
State, personally appeared Kristen Driscoll known to me to be a Vice President
of Citibank, N.A., a corporation that executed the within instrument, and also
known to me to be the person who executed it on behalf of said limited liability
company, and acknowledged to me that such limited liability company 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

                                                _________________________

                                       134

<PAGE>

                                    EXHIBIT A

                           FORM OF CLASS A CERTIFICATE

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

         [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.]

                                       A-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
CDMC Mortgage Pass-Through Certificates,                   Aggregate [Certificate Principal
Series 2004-3, Class [A-_]                                 Balance] of [Class A-_] Certificates as of the
                                                           Issue Date: $______________

Pass-Through Rate:
Variable
                                                           [Denomination]:
Date of Agreement and Cut-off Date:                        $______________
May 1, 2004
                                                           Master Servicer:
                                                           Cendant Mortgage Corporation
First Distribution Date: June 25, 2034                     Trustee: Citibank, N.A.

                                                           Issue Date: May 27, 2004

No. _                                                      CUSIP: ___________
</TABLE>

         [DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
         THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY,
         THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.]

                        MORTGAGE PASS-THROUGH CERTIFICATE

         evidencing a beneficial ownership interest in a Trust Fund (the "Trust
         Fund") consisting primarily of a pool of conventional, one- to
         four-family, fixed-rate, first lien mortgage loans (the "Mortgage
         Loans") formed and sold by

                          CENDANT MORTGAGE CAPITAL LLC

             CDMC MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-3

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         CENDANT MORTGAGE CAPITAL LLC, THE MASTER SERVICER, THE TRUSTEE OR ANY
         OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that __________ is the registered owner of a
Percentage Interest (obtained by dividing the [denomination] of this Certificate
by the aggregate [Certificate Principal Balance] of the [Class A-_] Certificates
as of the Issue Date) in that certain beneficial ownership

                                       A-2

<PAGE>

interest evidenced by all the [Class A-_] Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Cendant Mortgage Capital LLC (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, 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.

         Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the 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 [Class A-_] Certificates on such
Distribution Date pursuant to the Agreement.

         All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of [Class A-_] Certificates, the
aggregate initial [Certificate Principal Balance] of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial
[Certificate Principal Balance] of the [Class A-_] Certificates, or otherwise by
check mailed by first class mail 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 the presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose as provided in the Agreement.

         This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass- Through Certificates of the Series specified on the
face hereof (hereinafter called the "Certificates") and representing a
Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
[Certificate Principal Balance] of the Class of Certificates specified on the
face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the related Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions and conditions provided
therein, 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 Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of

                                       A-3

<PAGE>

Certificates entitled to at least 66%, in some cases 100%, of the Voting Rights.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor 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 set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

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

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar 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, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar 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, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from the Trust Fund of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans remaining therein. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from the
Trust Fund all the related Mortgage Loans and all property acquired in respect
of any related Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Loan
Balance of the related

                                       A-4

<PAGE>

Mortgage Loans at the time of purchase being less than 5% of the aggregate
principal balance of the related Mortgage Loans as of the Cut-off Date.

         The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

         Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                       A-5

<PAGE>

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

Dated: May 27, 2004

                                                CITIBANK, N.A.
                                                as Trustee

                                                By:_____________________________
                                                       Authorized Officer

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

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

                                                CITIBANK, N.A.
                                                as Certificate Registrar

                                                By:_____________________________
                                                       Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

         The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                  <C>
TEN COM - as tenants in common                       UNIF GIFT MIN ACT -         CUSTODIAN
TEN ENT - as tenants by the entireties                                           (Cust)   (Minor)
                                                                         under Uniform Gifts
JT TEN  - as joint tenants with right                                            to Minors Act
          of survivorship and not as                                     _________________
          tenants in common                                                   (State)
</TABLE>

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

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

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer 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 Percentage Interest 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

<PAGE>

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

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ____________, or,
if mailed by check, to ________________________________________________________.
Applicable statements should be mailed to ______________________________.

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

<PAGE>

                                    EXHIBIT B

                                   (RESERVED)

                                       B-1

<PAGE>

                                   EXHIBIT C-1

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.

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

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
         AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
         CODE WILL BE REGISTERED EXCEPT IN ACCORDANCE WITH SECTION 5.02(E) OF
         THE AGREEMENT.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
         TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
         POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
         FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
         INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER
         THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT 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, (3) ANY
         ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH
         PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
         HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN
         AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
         TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
         SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
         FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
         REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
         DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN
         AGENT OF A DISQUALIFIED ORGANIZATION,

                                      C-1-1

<PAGE>

         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 HEREOF SHALL BE DEEMED TO HAVE CONSENTED
         TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION
         5.02(F) OF THE AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
         DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
         OWNERSHIP OF THIS CERTIFICATE.

                                      C-1-2

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Certificate No. ___

CDMC Mortgage Pass-Through Certificates,                   Percentage Interest: [___]%
Series 2004-3, Class [R-_]

Pass-Through Rate: Variable                                Master Servicer:
                                                           Cendant Mortgage Corporation
Date of Agreement and Cut-off Date:
May 1, 2004                                                Trustee: Citibank, N.A.

First Distribution Date: June 25, 2034                     Issue Date: May 27, 2004

No. _                                                      CUSIP: ______________
</TABLE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

         evidencing a beneficial ownership interest in a Trust Fund (the "Trust
         Fund") consisting primarily of a pool of conventional, one- to
         four-family, fixed-rate, first lien mortgage loans (the "Mortgage
         Loans") formed and sold by

                          CENDANT MORTGAGE CAPITAL LLC

             CDMC MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-3

                  THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
                  INTEREST IN CENDANT MORTGAGE CAPITAL LLC, THE MASTER SERVICER,
                  THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
                  THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
                  GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
                  STATES.

                  This certifies that ___________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the [Class R-_]
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the [Class R-_] Certificates in The Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Cendant Mortgage Capital LLC (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, 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.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following

                                      C-1-3

<PAGE>

(a "Distribution Date"), commencing on the First Distribution Date specified
above, to the Person in whose name this Certificate is registered on the 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
[Class R-_] Certificates on such Distribution Date pursuant to the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions and conditions
provided therein, 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 Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor 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 set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

                                      C-1-4

<PAGE>

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

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the [Class R-_] Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the [Class R-_] Certificates. Notwithstanding the
registration in the Certificate Register of any transfer, sale or other
disposition of this Certificate to a Disqualified Organization or an agent
(including a broker, nominee or middleman) 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,
including, but not limited to, the receipt of distributions in respect of this
Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar 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, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar 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, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in The Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from The Trust Fund of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans remaining therein. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from the
Trust Fund all the related Mortgage Loans and all

                                      C-1-5

<PAGE>

property acquired in respect of any related Mortgage Loan remaining therein at a
price determined as provided in the Agreement. The exercise of such right will
effect early retirement of the Certificates; however, such right to purchase is
subject to the aggregate Loan Balance of the related Mortgage Loans at the time
of purchase being less than 5% of the aggregate principal balance of the related
Mortgage Loans as of the Cut-off Date.

         The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

         Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      C-1-6

<PAGE>

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

Dated: May 27, 2004

                                                CITIBANK, N.A.
                                                as Trustee

                                                By:_____________________________
                                                       Authorized Officer

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

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

                                                CITIBANK, N.A.
                                                as Certificate Registrar

                                                By:_____________________________
                                                       Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

         The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                  <C>
TEN COM - as tenants in common                       UNIF GIFT MIN ACT -         CUSTODIAN
TEN ENT - as tenants by the entireties                                           (Cust)   (Minor)
                                                                         under Uniform Gifts
JT TEN  - as joint tenants with right                                            to Minors Act
          of survivorship and not as                                     _________________
          tenants in common                                                   (State)
</TABLE>

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

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

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer 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 Percentage Interest 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

<PAGE>

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

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ____________, or,
if mailed by check, to ________________________________________________________.
Applicable statements should be mailed to ______________________________.

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

<PAGE>

                                  EXHIBIT C-2

                         FORM OF CLASS B-1 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").

         THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES AND THE
         CLASS R CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED
         TO HEREIN.

         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.

                                      C-2-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
CDMC Mortgage Pass-Through Certificates,                   Aggregate Certificate Principal
Series 2004-3, Class B-__                                  Balance of Class B-__
                                                           Certificates as of the Issue Date:
                                                           $__________

Pass-Through Rate: Variable                                Denomination: $__________

Date of Agreement and Cut-off Date:                        Master Servicer:
May 1, 2004                                                Cendant Mortgage Corporation

First Distribution Date: June 25, 2034
                                                           Trustee: Citibank, N.A.

No. 1                                                      Issue Date: May 27, 2004
                                                           CUSIP: ____________
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

                          CENDANT MORTGAGE CAPITAL LLC

             CDMC MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-3

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         CENDANT MORTGAGE CAPITAL LLC, THE MASTER SERVICER, THE TRUSTEE OR ANY
         OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-__ Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-__ Certificates in the Trust Fund created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Cendant Mortgage Capital LLC (hereinafter called the "Depositor," which term
includes any successor entity under the

                                      C-2-2

<PAGE>

Agreement), the Master Servicer and the Trustee, 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.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the 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 Class B-__ Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B-__ Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class B-__ Certificates, or otherwise by check mailed
by first class mail 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 the presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions and conditions
provided therein, 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 Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange

                                      C-2-3

<PAGE>

herefor 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 set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar 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, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar 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, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in The Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from The Trust Fund of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans remaining therein. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from the
Trust Fund all the related Mortgage Loans and all property acquired in respect
of any related Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Loan
Balance of the related Mortgage Loans at the time of purchase being less than 5%
of the aggregate principal balance of the related Mortgage Loans as of the
Cut-off Date.

                                      C-2-4

<PAGE>

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      C-2-5

<PAGE>

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

Dated: May 27, 2004

                                                CITIBANK, N.A.
                                                as Trustee

                                                By:_____________________________
                                                       Authorized Officer

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

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

                                                CITIBANK, N.A.
                                                as Certificate Registrar

                                                By:_____________________________
                                                       Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

         The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                  <C>
TEN COM - as tenants in common                       UNIF GIFT MIN ACT -         CUSTODIAN
TEN ENT - as tenants by the entireties                                           (Cust)   (Minor)
                                                                         under Uniform Gifts
JT TEN  - as joint tenants with right                                            to Minors Act
          of survivorship and not as                                     _________________
          tenants in common                                                   (State)
</TABLE>

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

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

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer 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 Percentage Interest 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

<PAGE>

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

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ____________, or,
if mailed by check, to ________________________________________________________.
Applicable statements should be mailed to ______________________________.

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

<PAGE>

                                   EXHIBIT C-3

        FORM OF CLASS B-2, CLASS B-3, CLASS B-4, CLASS B-5 AND CLASS B-6
                                   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").

         THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE
         RESIDUAL CERTIFICATES, [THE CLASS B-1 CERTIFICATES] [THE CLASS B-2
         CERTIFICATES] [THE CLASS B-3 CERTIFICATES] [THE CLASS B-4 CERTIFICATES]
         [AND THE CLASS B-5 CERTIFICATES] TO THE EXTENT DESCRIBED IN THE
         AGREEMENT REFERRED TO HEREIN.

         [NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
         RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
         CODE WILL BE REGISTERED EXCEPT IN ACCORDANCE WITH SECTION 5.02(E) OF
         THE AGREEMENT.]

         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 SECTION 5.02(D)
         OF THE AGREEMENT.

                                      C-3-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
CDMC Mortgage Pass-Through Certificates,                   Aggregate Certificate Principal
Series 2004-3, Class B-__                                  Balance of Class B-__
                                                           Certificates as of the Issue Date:
                                                           $__________

Pass-Through Rate: Variable                                Denomination: $__________

Date of Agreement and Cut-off Date:                        Master Servicer:
May 1, 2004                                                Cendant Mortgage Corporation

First Distribution Date: June 25, 2034
                                                           Trustee: Citibank, N.A.

No. 1                                                      Issue Date: May 27, 2004

                                                           CUSIP: ____________
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by

                          CENDANT MORTGAGE CAPITAL LLC

             CDMC MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-3

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         CENDANT MORTGAGE CAPITAL LLC, THE MASTER SERVICER, THE TRUSTEE OR ANY
         OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE
         UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
         INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that _______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-__ Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-__ Certificates in the Trust Fund created pursuant to a Pooling

                                      C-3-2

<PAGE>

and Servicing Agreement, dated as specified above (the "Agreement"), among
Cendant Mortgage Capital LLC (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, 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.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the 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 Class B-__ Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B-__ Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class B-__ Certificates, or otherwise by check mailed
by first class mail 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 the presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions and conditions
provided therein, 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 Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent

                                      C-3-3

<PAGE>

by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor 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 set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

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

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, (i) if such transfer is made in reliance upon
Rule 144A under the 1933 Act, the Trustee shall require the transferee to
execute an investment letter in substantially the form attached to the Agreement
as Exhibit F-1 or (ii) (A) the Trustee shall require the transferor to execute a
transferor certificate (in substantially the form attached to the Agreement as
Exhibit F-2) and the transferee to execute an investment letter (in
substantially the form attached to the Agreement as Exhibit F-3) acceptable to
and in form and substance reasonably satisfactory to the Depositor and the
Trustee certifying to the Depositor and the Trustee the facts surrounding such
transfer, which investment letter shall not be an expense of the Trustee or the
Depositor and (B) the Trustee and the Depositor shall require a written Opinion
of Counsel (which may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory to the Trustee and the Depositor that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Trustee or
the Depositor. None of the Depositor, the Certificate Registrar or the Trustee
is obligated to register or qualify the Class of Certificates specified on the
face hereof under the 1933 Act or any other securities law or to take any action
not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor, the Certificate Registrar and the Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

                                      C-3-4

<PAGE>

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

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar 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, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar 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, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in The Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from The Trust Fund of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans remaining therein. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from the
Trust Fund all the related Mortgage Loans and all property acquired in respect
of any related Mortgage Loan remaining therein at a price determined as provided
in the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Loan
Balance of the related Mortgage Loans at the time of purchase being less than 5%
of the aggregate principal balance of the related Mortgage Loans as of the
Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      C-3-5

<PAGE>

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

Dated: May 27, 2004

                                                CITIBANK, N.A.
                                                as Trustee

                                                By:_____________________________
                                                       Authorized Officer

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

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

                                                CITIBANK, N.A.
                                                as Certificate Registrar

                                                By:_____________________________
                                                       Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

         The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                  <C>
TEN COM - as tenants in common                       UNIF GIFT MIN ACT -         CUSTODIAN
TEN ENT - as tenants by the entireties                                           (Cust)   (Minor)
                                                                         under Uniform Gifts
JT TEN  - as joint tenants with right                                            to Minors Act
          of survivorship and not as                                     _________________
          tenants in common                                                   (State)
</TABLE>

         Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

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

the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer 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 Percentage Interest 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

<PAGE>

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

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
for the account of ___________________________, account number ____________, or,
if mailed by check, to ________________________________________________________.
Applicable statements should be mailed to ______________________________.

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

<PAGE>

                                    EXHIBIT D

                             MORTGAGE LOAN SCHEDULE

                                (Filed Manually)

                                       D-1

<PAGE>

                                    EXHIBIT E

                        REQUEST FOR RELEASE OF DOCUMENTS

To:     Citibank, N.A.
Attn:   Inventory Control

         Re:      Pooling and Servicing Agreement dated as of May 1, 2004, among
                  Cendant Mortgage Capital LLC, as Depositor, Cendant Mortgage
                  Corporation, as Master Servicer and Citibank, N.A., as Trustee
                  --------------------------------------------------------------

         In connection with the administration of the Mortgage Loans held by you
as Trustee for the Owner pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Trustee's 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

______    2.    Foreclosure

______    3.    Substitution

______    4.    Other Liquidation (Repurchases, etc.)

______    5.    Nonliquidation    Reason: ________________________

Address to which Trustee should
Deliver the Trustee's Mortgage File: ________________________
                                                     ________________________
                                                     ________________________

                                            By:________________________
                                                     (authorized signer)
                                            Issuer: _________________________
                                            Address:________________________
                                                    ________________________

                                            Date:   ________________________

                                       E-1

<PAGE>

                                   EXHIBIT F-1

                     FORM OF RULE 144A REPRESENTATION LETTER

                                                          ______ __, 2004

Citibank, N.A.
111 Wall Street, 14th Floor / Zone 3
New York, New York 10005

[Certificate Registrar]
________________________
________________________

         Re:      Cendant Mortgage Capital LLC CDMC Mortgage Pass-Through
                  Certificates, Series 2004-3, Class ___, Representing a ___%
                  Class ___ Percentage Interest
                  -----------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the purchase from ______________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:

                  1. The Transferee is a "qualified institutional buyer" as that
         term is defined in Rule 144A ("Rule 144A") under the Securities Act of
         1933 (the "1933 Act") and has completed either of the forms of
         certification to that effect attached hereto as Annex 1 or Annex 2. The
         Transferee is aware that the sale to it is being made in reliance on
         Rule 144A. The Transferee is acquiring the Certificates for its own
         account or for the account of a qualified institutional buyer, and
         understands that such Certificate may be resold, pledged or transferred
         only (i) to 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 on Rule 144A,
         or (ii) pursuant to another exemption from registration under the 1933
         Act.

                  2. The Transferee has been furnished with all information
         regarding (a) the Certificates and distributions thereon, (b) the
         nature, performance and servicing of the Mortgage Loans, (c) the
         Pooling and Servicing Agreement referred to below, and (d) any credit
         enhancement mechanism associated with the Certificates, that it has
         requested.

                                      F-1-1

<PAGE>

                  All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of May 1, 2004, among Cendant Mortgage Capital LLC as
Depositor, Cendant Mortgage Corporation as Master Servicer and Citibank, N.A. as
Trustee, pursuant to which the Certificates were issued.

                                               [TRANSFEREE]

                                               By:________________________
                                               Name:______________________
                                               Title:_____________________

                                      F-1-2

<PAGE>

                                                          ANNEX 1 TO EXHIBIT F-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Citibank, N.A., as Trustee and Certificate
Registrar, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $______________________1 in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.

         ___      CORPORATION, ETC. The Transferee is a corporation (other than
                  a bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or any
                  organization described in Section 501(c)(3) of the Internal
                  Revenue Code of 1986.

         ___      BANK. The Transferee (a) is a national bank or banking
                  institution organized under the laws of any State, territory
                  or the District of Columbia, the business of which is
                  substantially confined to banking and is supervised by the
                  State or territorial banking commission or similar official or
                  is a foreign bank or equivalent institution, and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, A COPY OF WHICH IS
                  ATTACHED HERETO.

         ___      SAVINGS AND LOAN. The Transferee (a) is a savings and loan
                  association, building and loan association, cooperative bank,
                  homestead association or similar

------------------------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.

                                      F-1-3

<PAGE>

                  institution, which is supervised and examined by a State or
                  Federal authority having supervision over any such
                  institutions or is a foreign savings and loan association or
                  equivalent institution and (b) has an audited net worth of at
                  least $25,000,000 as demonstrated in its latest annual
                  financial statements, A COPY OF WHICH IS ATTACHED HERETO.

         ___      BROKER-DEALER. The Transferee is a dealer registered pursuant
                  to Section 15 of the Securities Exchange Act of 1934.

         ___      INSURANCE COMPANY. The Transferee is an insurance company
                  whose primary and predominant business activity is the writing
                  of insurance or the reinsuring of risks underwritten by
                  insurance companies and which is subject to supervision by the
                  insurance commissioner or a similar official or agency of a
                  State, territory or the District of Columbia.

         ___      STATE OR LOCAL PLAN. The Transferee is a plan established and
                  maintained by a State, its political subdivisions, or any
                  agency or instrumentality of the State or its political
                  subdivisions, for the benefit of its employees.

         ___      ERISA PLAN. The Transferee is an employee benefit plan within
                  the meaning of Title I of the Employee Retirement Income
                  Security Act of 1974.

         ___      INVESTMENT ADVISOR. The Transferee is an investment advisor
                  registered under the Investment Advisers Act of 1940.

                  3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.

                                      F-1-4

<PAGE>

                  5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.

         ___      ___      Will the Transferee be purchasing the Certificates
         Yes      No       only for the Transferee's own account?

                  6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.

                  7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.

Dated:

                                               ___________________________
                                               Print Name of Transferee

                                               By:________________________
                                               Name:______________________
                                               Title:_____________________

                                      F-1-5

<PAGE>

                                                          ANNEX 2 TO EXHIBIT F-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That Are Registered Investment Companies]
           ----------------------------------------------------------

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Citibank, N.A., as Trustee and Certificate
Registrar, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.

____              The Transferee owned $___________________ in securities (other
                  than the excluded securities referred to below) as of the end
                  of the Transferee's most recent fiscal year (such amount being
                  calculated in accordance with Rule 144A).

____              The Transferee is part of a Family of Investment Companies
                  which owned in the aggregate $______________ in securities
                  (other than the excluded securities referred to below) as of
                  the end of the Transferee's most recent fiscal year (such
                  amount being calculated in accordance with Rule 144A).

                  3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                                      F-1-6

<PAGE>

                  4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.

                  5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.

                  6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated:

                                           ____________________________________
                                           Print Name of Transferee or Advisor

                                           By:__________________________
                                           Name:________________________
                                           Title:______________________________

                                           IF AN ADVISER:

                                           ____________________________________
                                           Print Name of Transferee

                                      F-1-7

<PAGE>

                  The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:

         1. I am an executive officer of the Purchaser.

         2. The Purchaser is a "qualified institutional buyer", as defined in
Rule 144A, ("Rule 144A") under the Securities Act of 1933, as amended.

         3. As of the date specified below (which is not earlier than the last
day of the Purchaser's most recent fiscal year), the amount of "securities",
computed for purposes of Rule 144A, owned and invested on a discretionary basis
by the Purchaser was in excess of $100,000,000.

Name of Purchaser  ___________________________________________________________

By:      (Signature)__________________________________________________________

Name of Signatory ____________________________________________________________

Title ________________________________________________________________________

Date of this certificate _____________________________________________________

Date of information provided in paragraph 3 __________________________________

                                      F-1-8

<PAGE>

                                   EXHIBIT F-2

                         FORM OF TRANSFEROR CERTIFICATE

                                                          _____ __, 2004

Citibank, N.A.
111 Wall Street, 14th Floor / Zone 3
New York, New York 10005

[Certificate Registrar]
________________________
________________________

         Re:      Cendant Mortgage Capital LLC,
                  CDMC Mortgage Pass-Through Certificates, Series 2004-3,
                  Class ___, Representing a ___% Class ___ Percentage Interest
                  ------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferor hereby certifies
as follows:

                  Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of May
1, 2004, among Cendant Mortgage Capital LLC as Depositor, Cendant Mortgage
Corporation as Master Servicer and Citibank, N.A. as Trustee (the "Pooling and
Servicing Agreement"), pursuant to which Pooling and Servicing Agreement the
Certificates were issued.

         Capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.

                                      F-2-1

<PAGE>

                                                     Very truly yours,

                                                     [Transferor]

                                                     By:________________________
                                                     Name:______________________
                                                     Title:_____________________

                                      F-2-2

<PAGE>

                                   EXHIBIT F-3

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                        ______ __, 2004

Citibank, N.A.
111 Wall Street, 14th Floor / Zone 3
New York, New York 10005

[Certificate Registrar]
________________________
________________________

         Re:      Cendant Mortgage Capital LLC,
                  CDMC Mortgage Pass-Through Certificates, Series 2004-3,
                  Class ___, Representing a ___% Class ___ Percentage Interest
                  ------------------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferee hereby certifies
as follows:

         1. The Transferee understands that (a) the Certificates have not been
and will not be registered or qualified under the Securities Act of 1933 (the
"1933 Act") or any state securities law, (b) the Depositor is not required to so
register or qualify the Certificates, (c) the Certificates may be resold only if
registered and qualified pursuant to the provisions of the Act or any state
securities law, or if an exemption from such registration and qualification is
available, (d) the Pooling and Servicing Agreement contains restrictions
regarding the transfer of the Certificates and (e) the Certificates will bear a
legend to the foregoing effect.

         2. The Transferee is acquiring the Certificates for its own account for
investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the 1933 Act or any
applicable state securities laws.

         3. The Transferee is (a) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) able to bear the economic risks of such an
investment and (c) an "accredited investor" within the meaning of Rule 501(a)
promulgated pursuant to the 1933 Act.

         4. The Transferee has been furnished with all information regarding (a)
the Certificates and distributions thereon, (b) the nature, performance and
servicing of the Mortgage Loans, (c) the

                                      F-3-1

<PAGE>

Pooling and Servicing Agreement referred to below, and (d) any credit
enhancement mechanism associated with the Certificates, that it has requested.

         5. The Transferee has not and will not nor has it authorized or will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicit any offer to buy or to accept
a pledge, disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner, (e) take any other action, that (in the case of each of subclauses (a)
through (e) above) would constitute a distribution of the Certificates under the
1933 Act, or would render the disposition of any Certificate a violation of
Section 5 of the 1933 Act or any state securities law or would require
registration or qualification pursuant thereto. The Transferee will not sell or
otherwise transfer any of the Certificates, except in compliance with the
provisions of that certain Pooling and Servicing Agreement, dated as of May 1,
2004, among Cendant Mortgage Capital LLC as Depositor, Cendant Mortgage
Corporation as Master Servicer and Citibank, N.A. as Trustee (the "Pooling and
Servicing Agreement"), pursuant to which Pooling and Servicing Agreement the
Certificates were issued.

         Capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.

                                                     Very truly yours,

                                                     [Transferee]

                                                     By:________________________
                                                     Name:______________________
                                                     Title:_____________________

                                      F-3-2

<PAGE>

                                   EXHIBIT F-4

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF ________                   )
                                    : ss.:
COUNTY OF ________                  )

                  ________________________ , being duly sworn, deposes,
represents and warrants as follows:

         (i) I am a ______________________ of ____________________________ (the
"Owner") a corporation duly organized and existing under the laws of
______________, the record owner of or ______% Percentage Interest in the
Cendant Mortgage Capital LLC, CDMC Mortgage Pass- Through Certificates, Series
2004-3, Class R-I Certificates and Class R-II Certificates (together, the "Class
R Certificates"), on behalf of whom I make this affidavit and agreement.
Capitalized terms used but not defined herein have the respective meanings
assigned thereto in the Pooling and Servicing Agreement pursuant to which the
Class R Certificates were issued.

         (ii) The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 200___ and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.

         (iii) The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after May 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that thetransferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or collection of tax.

                                      F-4-1

<PAGE>

         (iv) The Owner is aware of the tax imposed on a "pass-through entity"
holding the Class R Certificates if, at any time during the taxable year of the
pass-through entity, a non-Permitted Transferee is the record holder of an
interest in such entity. (For this purpose, a "pass-through entity"includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

         (v) The Owner is aware that the Trustee will not register the transfer
of any Class R Certificate unless the transferee, or the transferee's agent,
delivers to the Trustee, among other things, an affidavit in substantially the
same form as this affidavit. The Owner expressly agrees that it will not
consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.

         (vi) The Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or indirectly, by an Owner that is a Permitted Transferee.

         (vii) The Owner's taxpayer identification number is _________________.

         (viii) The Owner has reviewed the restrictions set forth on the face of
the Class R Certificates and the provisions of Section 5.02(f) of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (in
particular, clauses (iii)(A) and (iii)(B) of Section 5.02(f) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(f)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.

         (ix) The Owner is not acquiring and will not transfer the Class R
Certificates in order to impede the assessment or collection of any tax.

         (x) The Owner anticipates that it will, so long as it holds the Class R
Certificates, have sufficient assets to pay any taxes owed by the holder of such
Class R Certificates, and hereby represents to and for the benefit of the person
from whom it acquired the Class R Certificates that the Owner intends to pay
taxes associated with holding such Class R Certificates as they become due,
fully understanding that it may incur tax liabilities in excess of any cash
flows generated by the Class R Certificates.

         (xi) The Owner has no present knowledge that it may become insolvent or
subject to a bankruptcy proceeding for so long as it holds the Class R
Certificates.

         (xii) The Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.

         (xiii) The Owner is not acquiring the Class R Certificates with the
intent to transfer the Class R Certificates to any person or entity that will
not have sufficient assets to pay any taxes owed by the holder of such Class R
Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.

                                      F-4-2

<PAGE>

         (xiv) The Owner will, in connection with any transfer that it makes of
the Class R Certificates, obtain from its transferee the representations
required by Section 5.02(f) of the Pooling and Servicing Agreement under which
the Class R Certificates were issued and will not consummate any such transfer
if it knows, or knows facts that should lead it to believe, that any such
representations are false.

         (xv) The Owner will, in connection with any transfer that it makes of
the Class R Certificates, deliver to the Trustee an affidavit, which represents
and warrants that it is not transferring the Class R Certificates to impede the
assessment or collection of any tax and that it has no actual knowledge that the
proposed transferee: (i) has insufficient assets to pay any taxes owed by such
transferee as holder of the Class R Certificates; (ii) may become insolvent or
subject to a bankruptcy proceeding for so long as the Class R Certificates
remains outstanding; and (iii) is not a "Permitted Transferee".

         (xvi) The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States may be included in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.

         (xvii) (a) The Owner is not an employee benefit plan or other plan
subject to the prohibited transaction provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or an investment
manager, named fiduciary or a trustee of any such plan, or any other Person
acting, directly or indirectly, on behalf of or purchasing any Certificate with
"plan assets" of any such plan; or

                  (b) The Owner will provide the Trustee, the Company and the
Master Servicer with an opinion of counsel acceptable to and in form and
substance satisfactory to such entities to the effect that the purchase of
Certificates is permissible under applicable law, will not constitute or result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the Code
and will not subject the Trustee, the Depositor or the Master Servicer to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the Pooling and
Servicing Agreement.

         In addition, the Owner hereby certifies, represents and warrants to,
and covenants with, the Depositor, the Trustee and the Master Servicer that the
Owner will not transfer such Certificates to any Plan or person unless either
such Plan or person meets the requirements set forth in either (a) or (b) above.

                                      F-4-3

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 200___.

                                                     [OWNER]

                                                     By:________________________
                                                     Name:______________________
                                                     Title:   [Vice] President

ATTEST:

By:__________________________
Name:________________________
Title: [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of __________,
200___.

                                                     ___________________________
                                                            Notary Public

                                                     County of _________________
                                                     State of __________________

                                                     My Commission expires:

                                      F-4-4

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

STATE OF ________           )
                            : ss. :
COUNTY OF ________          )

                  ________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ____________________ of ____________________________
(the "Owner"), a corporation duly organized and existing under the laws of
______________, on behalf of whom I make this affidavit.

                  2. The Owner is not transferring the Class R Certificates (the
"Residual Certificates") to impede the assessment or collection of any tax.

                  3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

                  4. The Owner understands that the Purchaser has delivered to
the Trustee a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit F-4. The Owner does not know or
believe that any representation contained therein is false.

                  5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E- 1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.

                  6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement

                                      F-4-5

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 200___.

                                                [OWNER]

                                                By: ___________________________
                                                Name:__________________________
                                                Title:     [Vice] President

ATTEST:

By:__________________________
Name:________________________
Title: [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of __________,
200___.

                                                ________________________________
                                                         Notary Public

                                                County of ______________________
                                                State of _______________________

                                                My Commission expires:

                                      F-4-6

<PAGE>

                                   EXHIBIT G-1

                       FORM OF ERISA REPRESENTATION LETTER
                      (CLASS B-4, CLASS B-5 AND CLASS B-6)

                                                      ______ __, 2004

Cendant Mortgage Capital LLC
3000 Leadenhall Road
Mount Laurel, New Jersey 08054

Citibank, N.A.
111 Wall Street, 14th Floor / Zone 3
New York, New York 10005

Cendant Mortgage Corporation
3000 Leadenhall Road
Mount Laurel, New Jersey 08054

         Re:      Cendant Mortgage Capital LLC CDMC Mortgage Pass-Through
                  Certificates, Series 2004-3, Class [B-4][B-5][B-6]
                  -------------------------------------------------------

Ladies and Gentlemen:

                  __________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Cendant Mortgage Capital LLC, CDMC Mortgage
Pass-Through Certificates, Series 2004-3, Class ___ (the "Certificates"), issued
pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of May 1, 2004 among Cendant Mortgage Capital LLC as
depositor (the "Depositor"), Cendant Mortgage Corporation as master servicer
(the "Master Servicer") and Citibank, N.A. as trustee (the "Trustee").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Pooling and Servicing Agreement. The Transferee hereby
certifies, represents and warrants to, and covenants with the Depositor, the
Trustee and the Master Servicer that the following statements in either (1), (2)
or (3) below are accurate (please mark the applicable statement with a check
(X)):

_____ (1) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101,
and (iii) will not

                                      G-1-1

<PAGE>

be transferred to any entity that is deemed to be investing in plan assets
within the meaning of the DOL regulation at 29 C.F.R.ss.2510.3-101; or

_____ (2) The purchase of Certificates is permissible under applicable law, will
not subject the Depositor, the Trustee or the Master Servicer to any obligation
in addition to those undertaken in the Pooling and Servicing Agreement and (i)
the Transferee is an insurance company, (ii) the source of funds used to
purchase such Certificates is an "insurance company general account" (as such
term is defined in Prohibited Transaction Class Exemption ("PTCE") 95-60) and
(iii) the conditions set forth in Section III of PTCE 95-60 and all other
applicable conditions of PTCE 95-60 have been satisfied and as a result, the
acquisition and holding of the Certificates will not constitute or result in any
prohibited transaction under ERISA or Section 4975 of the Code; or

_____ (3) The Transferee has provided the Trustee and the Master Servicer with
an Opinion of Counsel, subject to the satisfaction of the Depositor in form and
substance, that purchase of the Certificates (i) is permissible under applicable
law, (ii) will not constitute or result in a non-exempt prohibited transaction
under ERISA or Section 4975 of the Code, and (iii) will not subject the
Depositor, the Trustee or the Master Servicer to any obligation or liability
(including obligations or liabilities arising under ERISA or Section 4975 of the
Code) in addition to those undertaken in the Pooling and Servicing Agreement.

                                                     Very truly yours,

                                                     ___________________________

                                                     By: _______________________
                                                     Name:
                                                     Title:

                                      G-1-2

<PAGE>

                                   EXHIBIT G-2

                       FORM OF ERISA REPRESENTATION LETTER
                            (CLASS B-2 AND CLASS B-3)

                                                       ______ __, 2004

Cendant Mortgage Capital LLC
3000 Leadenhall Road
Mount Laurel, New Jersey 08054

Citibank, N.A.
111 Wall Street, 14th Floor / Zone 3
New York, New York 10005

Cendant Mortgage Corporation
3000 Leadenhall Road
Mount Laurel, New Jersey 08054

         Re:      Cendant Mortgage Capital LLC CDMC Mortgage Pass-Through
                  Certificates, Series 2004-3, Class [B-2][B-3]
                  -------------------------------------------------------

Ladies and Gentlemen:

                  __________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Cendant Mortgage Capital LLC, CDMC Mortgage
Pass-Through Certificates, Series 2004-3, Class ____ (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of May 1, 2004 among Cendant Mortgage Capital LLC as
depositor (the "Depositor"), Cendant Mortgage Corporation as master servicer
(the "Master Servicer") and Citibank, N.A. as trustee (the "Trustee").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.

         The Transferee hereby certifies, represents and warrants to, and
covenants with the Depositor, the Trustee and the Master Servicer that the
following statements in either (1) or (2) below are accurate (please mark the
applicable statement with a check (X)):

_____ (1) The Certificates (1) are not being acquired by, and will not be
transferred to, any employee benefit plan with the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101,
and (iii) will not

                                      G-2-1

<PAGE>

be transferred to any entity that is deemed to be investing in plan assets
within the meaning of the DOL regulation at 29 C.F.R. ss. 2510.3-101; or

_____ (2) The Transferee is an "accredited investor" as defined in Rule
501(a)(1) of Regulation D of the Securities and Exchange Commission under the
Securities Act of 1933 (the "Securities Act") and, so long as the Transferee (or
any transferee of the Transferee's Certificates) is required to obtain from its
transferee a representation regarding compliance with the Securities Act, the
Transferee will require its transferee to make such representation in writing.

                                                     Very truly yours,

                                                     ___________________________

                                                     By: _______________________
                                                     Name:
                                                     Title:

                                      G-2-2

<PAGE>

                                    EXHIBIT H

                           FORM OF LOST NOTE AFFIDAVIT

                  [Name of Seller], a ______________ corporation (the "Mortgage
Loan Seller"), by its undersigned authorized representative, hereby certifies:

                  Pursuant to the Mortgage Loan Purchase Agreement, dated
_______________, between the Seller [Cendant Mortgage Corporation] [Bishop's
Gate Residential Mortgage Trust] and Cendant Mortgage Capital LLC (the
"Depositor"), the Seller is granting all of its right, title and interest in and
to the Mortgage Loan identified below to the Depositor. Terms used but not
defined herein have the respective meanings assigned to them in the Mortgage
Loan Purchase Agreement.

Mortgage Loan Number:
Maker:
Original Principal Amount:
Original Mortgage Note Date:
Maturity Date:

                  The Seller is the current owner and holder of the indebtedness
evidenced by the original Mortgage Note.

                  After diligent search, the Seller has been unable to locate
the original Mortgage Note and believes it to be lost or misplaced.

                  A true, complete and correct photocopy of the original
Mortgage Note is attached hereto.

                  If at any time the Seller locates the original Mortgage Note,
the Mortgage Loan Seller shall endorse such original Mortgage Note in the
following form: "Pay to the order of [Name of Trustee], as Trustee for the
registered holders of Cendant Mortgage Capital LLC, Mortgage Pass- Through
Certificates, CDMC Series 2004-3, without recourse," and shall promptly deliver
to the Trustee the original Mortgage Note so endorsed, with all prior and
intervening endorsements showing a complete chain of endorsement from the
originator to the Seller.

                  The Seller hereby indemnifies the Depositor, the Trustee and
the Certificateholders from and against any and all losses, liabilities,
damages, claims or expenses of whatever kind (including without limitation
attorneys' fees and disbursements) arising from or in connection with the
Seller's failure to have delivered the original Mortgage Note (as required under
the Mortgage Loan Purchase Agreement) to the Trustee as designee of the
Depositor, including without limitation any such losses, liabilities, damages,
claims or expenses arising from or in connection with any claim by any third
party who is the holder of such indebtedness by virtue of its possession of such
original Mortgage Note.

                                       H-1

<PAGE>

                  This Lost Note Affidavit shall inure to the benefit of the
Depositor, the Trustee and the Certificateholders and their respective
successors and permitted assigns.

Dated:

                                                     [Seller]

                                                     By:________________________
                                                     Name:______________________
                                                     Title:_____________________

                                       H-2

<PAGE>

                                   EXHIBIT I-1

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                    _________ __, 2004

Cendant Mortgage Capital LLC
3000 Leadenhall Road
Mount Laurel, New Jersey 08054

Cendant Mortgage Corporation
3000 Leadenhall Road
Mount Laurel, New Jersey 08054

         Re:      Pooling and Servicing Agreement, dated as of May 1, 2004,
                  among Cendant Mortgage Capital LLC, as depositor, Cendant
                  Mortgage Corporation as master servicer and Citibank, N.A., as
                  Trustee, CDMC Mortgage Pass-Through Certificates, Series
                  2004-3
                  --------------------------------------------------------------

Ladies and Gentlemen:

                  Attached is the Trustee's preliminary exception report
delivered in accordance with Section 2.02 of the referenced Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"). Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement.

                  The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trustee makes no
representations as to (i) the validity, legality, sufficiency, enforceability or
genuineness of any of the documents contained in the Mortgage File pertaining to
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Mortgage File included any of the documents specified
in Section 2.01 of the Pooling and Servicing Agreement.

                                                     CITIBANK,N.A.

                                                     By:________________________
                                                     Name:
                                                     Title:

                                       I-1

<PAGE>

                                   EXHIBIT I-2

                       FORM OF TRUSTEE FINAL CERTIFICATION

                                                     _________________, 2004

Cendant Mortgage Capital LLC
3000 Leadenhall Road
Mount. Laurel, New Jersey 08054

Cendant Mortgage Corporation
3000 Leadenhall Road
Mount Laurel, New Jersey 08054

         Re:      Pooling and Servicing Agreement, dated as of May 1, 2004,
                  among Cendant Mortgage Capital LLC, as depositor, Cendant
                  Mortgage Corporation, as master servicer and Citibank, N.A.,
                  as Trustee, CDMC Mortgage Pass-Through Certificates, Series
                  2004-3
                  ------------------------------------------------------------

Ladies and Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as noted on
the Schedule of Exceptions attached hereto, for each Mortgage Loan listed on the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attachment hereto), it has received a complete Mortgage File which includes
the documents required to be included in the Mortgage File as set forth in the
Pooling and Servicing Agreement.

         The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation as to: (i) the validity, legality, sufficiency, enforceability or
genuineness of any documents contained in any Mortgage File for any of the
Mortgage Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing
Agreement, (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan or (iii) whether any Mortgage File should include any
flood insurance policy, any rider, addenda, surety or guaranty agreement, power
of attorney, buy down agreement, assumption agreement, modification agreement,
written assurance or substitution agreement.

                                      I-2-1

<PAGE>

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

                                                     CITIBANK, N.A., as Trustee

                                                     By:________________________
                                                     Name:
                                                     Title:

                                      I-2-2

<PAGE>

                                    EXHIBIT J

                        MORTGAGE LOAN PURCHASE AGREEMENT

                            (Available upon request)

                                       J-1

<PAGE>

                                    EXHIBIT K

                ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
                   (Additional Collateral Servicing Agreement)

                            (Available Upon Request)

                                       K-1

<PAGE>

                                    EXHIBIT L

                                   [Reserved]

                                       L-1

<PAGE>

                                    EXHIBIT M

                          FORM OF FORM 10-K CERTIFICATE

         I, [identify the certifying individual], certify that:

         1. I have reviewed this annual report on Form 10-K, and all reports on
Form 8-K containing distribution or servicing reports filed in respect of
periods included in the year covered by this annual report, of the trust (the
"Trust") created pursuant to the Pooling and Servicing Agreement dated May 1,
2004 (the "Agreement") among Cendant Mortgage Capital LLC (the "Depositor"),
Cendant Mortgage Corporation (the "Master Servicer") and Citibank, N.A. (the
"Trustee");

         2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;

         3. Based on my knowledge, the servicing information required to be
provided to the Trustee by the Master Servicer under the Agreement for inclusion
in these reports is included in these reports;

         4. I am responsible for reviewing the activities performed by the
Master Servicer under the Agreement and based upon my knowledge and the annual
compliance review required under the Agreement, and except as disclosed in the
reports, the Master Servicer has fulfilled its obligations under the Agreement;
and

         5. The reports disclose all significant deficiencies relating to the
Master Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a review
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
as set forth in the Agreement, that is included in these reports.

                  In giving the certifications above, I have reasonably relied
on the information provided to me by the following unaffiliated parties: the
Trustee.

Date:____________

_________________________________*
[Signature]
Name:
Title:

* - to be signed by the Chief Executive Officer of the Master Servicer

                                       M-1

<PAGE>

                                    EXHIBIT N

             FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE

Cendant Mortgage Corporation
3000 Leadenhall Road
Mt. Laurel, New Jersey 08054

Re:           CDMC Mortgage Pass-Through Certificates, Series 2004-3

              Reference is made to the Pooling and Servicing Agreement, dated as
of May 1, 2004 (the "Trust Agreement"), by and among Citibank, N.A. (the
"Trustee"), Cendant Mortgage Corporation, as master servicer (the "Master
Servicer"), and Cendant Mortgage Capital LLC, as depositor (the "Depositor").
The Trustee, hereby certifies to the Master Servicer, and its officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:

              (i)     The Trustee has reviewed the annual report on Form 10-K
                      for the fiscal year _____, and all reports on Form 8-K
                      containing distribution reports filed in respect of
                      periods included in the year covered by that annual
                      report, relating to the above-referenced trust;

              (ii)    Based on my knowledge, the information set forth in the
                      reports on Form 10-K and Form 8-K referenced in (i) above
                      (including the distribution reports) does not contain any
                      untrue statement of material fact subject to the accuracy
                      of the information provided to us by the Master Servicer
                      and includes all information required to be stated
                      therein; and

              (iii)   Based on my knowledge, all distribution information
                      required to be provided by the Trustee under the Pooling
                      and Servicing Agreement is included in these reports.

Date:

                                                     Citibank, N.A., as Trustee

                                                     By:     ___________________
                                                     Name:   ___________________
                                                     Title:  ___________________

                                       N-1

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