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Form 8-K for STRUCTURED ASSET MORT INV II INC BEAR STEARNS ALT A TR 04 1

10-Mar-2004

Financial Statements and Exhibits

(c) Exhibits:

               1.   Pooling  and  Servicing  Agreement,  dated as of February 1,
                    2004 among Structured Asset Mortgage Investments II Inc., as
                    seller,  Wells Fargo Bank,  National  Association  as master
                    servicer   and   securities   administrator,   EMC  Mortgage
                    Corporation and JPMorgan Chase Bank, as trustee.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on behalf of the Registrant by the undersigned thereunto duly authorized.

                                          STRUCTURED ASSET MORTGAGE INVESTMENTS
                                           II INC.

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

Dated: March 10, 2004

                                 EXHIBIT INDEX

                 Item 601 (a) of        Sequentially
Exhibit          Regulation S-K         Numbered
Number           Exhibit No.            Description                         Page
------           -----------            -----------                         ----
   1                   4                Pooling and Servicing Agreement       5

                                    EXHIBIT 1

                                                                  EXECUTION COPY

                 STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
                                    DEPOSITOR

                              JPMORGAN CHASE BANK,
                                     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 February 1, 2004

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

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

                                  Series 2004-1

                                    ARTICLE I
                                   DEFINITIONS

                                   ARTICLE II
         CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES

                                   ARTICLE III
                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

                                   ARTICLE IV
                                    ACCOUNTS

                                      -i-

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

                                   ARTICLE VI
                         PAYMENTS TO CERTIFICATEHOLDERS

                                   ARTICLE VII
                               THE MASTER SERVICER

                                      -ii-

                                  ARTICLE VIII
                                     DEFAULT

                                   ARTICLE IX
             CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

                                    ARTICLE X
                                   TERMINATION

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

                                     -iii-

Section 11.06 Governing Law..................................................117 Section 11.07 Notices........................................................117 Section 11.08 Severability of Provisions.....................................118 Section 11.09 Successors and Assigns.........................................118 Section 11.10 Article and Section Headings...................................118 Section 11.11 Counterparts...................................................118 Section 11.12 Notice to Rating Agencies......................................118

                                    APPENDIX

                                    EXHIBITS

                                      -iv-

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

                              PRELIMINARY STATEMENT

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.

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.

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

The Class R Certificate will evidence ownership of the "residual interest" in each REMIC.

The Group I 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 $137,032,882.96. The Group II 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 $199,550,242.56. The Group III 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 $15,390,369.30. The Group IV 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 $96,721,125.09. The Group V 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 $167,444,472.84.

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:

                                    ARTICLE I
                                   Definitions

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 Servicing Agreement, to the extent applicable to any Servicer, but in no event below the standard set forth in clause (x).

Account: The Master Servicer Collection Account, the Distribution - Account and the Protected Account as the context may require.

Accrued Certificate Interest: For any Certificate (other than the Class R Certificates) for any Distribution Date, the interest accrued during the related Interest Accrual Period at the applicable Pass-Through Rate on the Current Principal Amount, or Notional Amount in the case of any Interest Only Certificate, of such Certificate immediately prior to such Distribution Date, on the basis of a 360-day year consisting of twelve 30-day months, less (i) in the case of a Senior Certificate, such Certificate's share of any Net Interest Shortfall from the related Mortgage Loans and, after the Cross-Over Date, the interest portion of any Realized Losses on the related Mortgage Loans, in each case 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, in each case 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.

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

Aggregate Subordinate Optimal Principal Amount: With respect to any - Distribution Date, the sum of the Subordinate Optimal Principal Amounts for all Loan Groups for such Distribution Date.

Allocable Share: With respect to any Class of Subordinate Certificates - and any Distribution Date, an amount equal to the product of (i) the Aggregate Subordinate Optimal Principal Amount and (ii) the fraction, 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; provided, however, that no Class of Subordinate Certificates (other Class M Certificates, or if the Class M Certificates are no longer outstanding, the class of Class B Certificates with the lowest numerical designation) shall be entitled on any Distribution Date to receive distributions pursuant to clauses (ii), (iii) and (v) of the definition of Subordinate Optimal Principal Amount unless the related Class Prepayment Distribution Trigger for such Distribution Date has been satisfied (any amount distributable pursuant to clauses (ii), (iii) and (v) of the definition of Subordinate Optimal Principal Amount shall be distributed among the Classes entitled thereto, pro rata based on their respective Current Principal Amounts); provided, further, that if on a Distribution Date, the Current Principal Amount of any Class of Subordinate Certificates for which the related Class Prepayment Distribution Trigger has been satisfied is reduced to zero, such Class's remaining Allocable Share shall be distributed to the remaining Classes of Subordinate Certificates which satisfy the related Class Prepayment Distribution Trigger and to the Class M Certificates (or if the Class M Certificates are no longer outstanding, the outstanding Class of Class B Certificates with the lowest numerical designation) in reduction of their respective Current Principal Amounts, first to the Class M Certificates and then to the Class B Certificates 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 (or with respect to investments in money market funds, a credit rating of "AAAm" or "AAAm-G" in the case of S&P and the highest rating given by Moody's for money market funds 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 Prime-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 Agreement: The agreement attached hereto as Exhibit I, - whereby the Servicing Agreement was assigned to the Trustee for the benefit of the Certificateholders.

Assumed Final Distribution Date: February 25, 2034, or if such day is not a Business Day, the next succeeding Business Day.

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

with respect to such Distribution Date, (c) any reimbursed amount in connection with losses on investments of deposits in an account and (d) any amount allocated from the Available Funds of another Loan Group in accordance with Section 6.01(a)(i)(F) under, 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 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) amounts applied to pay any fees with respect to any lender-paid primary mortgage insurance policy; and

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

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 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 are authorized or obligated by law or executive order to be closed.

Calendar Quarter: January 1 through March 31, April 1 through June 30, July 1 through September 30, or October 1 through 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, A-3 and A-4 with the blanks therein appropriately completed.

Certificate Group: With respect to Loan Group I, the Group I - Certificates, with respect to Loan Group II, the Group II Certificates, with respect to Loan Group III, the Group III Certificates, with respect to Loan Group IV, the Group IV Certificates, and, with respect to Loan Group V, the Group V Certificates.

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, any of Class I-A-1, Class - I-X-A-1, Class I-A-2, Class I-X-A-2, Class II-A-1, Class II-X-A-1, Class II-A-2, Class II-X-A-2, Class II-A-3, Class II-X-A-3, Class III-A-1, Class III-X-A-1, Class IV-A-1, Class IV-X-A-1, Class V-A-1, Class R, Class M, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates.

Class A Certificates: The Class I-A-1, Class I-X-A-1, Class I-A-2, - Class I-X-A-2, Class II-A-1, Class II-X-A-1, Class II-A-2, Class II-X-A-2, Class II-A-3, Class II-X-A-3, Class III-A-1, Class III-X-A-1, Class IV-A-1, Class IV-X-A-1 and Class V-A-1 Certificates.

Class M Certificates: The Class M Certificates.

Class Prepayment Distribution Trigger: For a Class of Subordinate Certificates for any Distribution Date, the Class Prepayment Distribution Trigger is satisfied if the fraction (expressed as a percentage), the numerator of which is the aggregate Current Principal Amount of such Class and each Class of Subordinate Certificates, respectively, 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 Certificate: Any one of the Class R Certificates substantially - in the form annexed hereto as Exhibit A-4 and evidencing ownership of interests designated as "residual interests" in

REMIC I, REMIC II and REMIC III for purposes of the REMIC Provisions. Component I of the Class R Certificates is designated as the sole class of "residual interest" in REMIC I, Component II of the Class R Certificates is designated as the sole class of "residual interest" in REMIC II and Component III of the Class R Certificates is designated as the sole class of "residual interest" in REMIC
III.

Class R Deposit: The $100 deposit into the Distribution Account by the - Depositor on the Closing Date to pay the Class R Certificates in accordance with Section 6.01(a) on the Distribution Date occurring in March 2004.

Class Y Principal Reduction Amounts: For any Distribution Date, the - amounts by which the Uncertificated Principal Balances of the Class Y Regular Interests will be reduced on such Distribution Date by the allocation of Realized Losses and the distribution of principal, determined as described in Appendix I

Class Y Regular Interests: The Class Y-1, Class Y-2, Class Y-3, Class Y-4 and Class Y-5 Regular Interests.

Class Y-1 Principal Distribution Amount: For any Distribution Date, the - excess, if any, of the Class Y-1 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Y-1 Regular Interest on such Distribution Date.

Class Y-1 Principal Reduction Amount: The Class Y Principal Reduction - Amount for the Class Y-1 Regular Interest as determined pursuant to the provisons of the Appendix 1.

Class Y-1 Regular Interest: The uncertificated undivided beneficial interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Y-2 Principal Distribution Amount: For any Distribution Date, the - excess, if any, of the Class Y-2 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Y-2 Regular Interest on such Distribution Date.

Class Y-2 Principal Reduction Amount: The Class Y Principal Reduction - Amount for the Class Y-2 Regular Interest as determined pursuant to the provisons of the Appendix 1.

Class Y-2 Regular Interest: The uncertificated undivided beneficial interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Y-3 Principal Distribution Amount: For any Distribution Date, the - excess, if any, of the Class Y-3 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Y-3 Regular Interest on such Distribution Date.

Class Y-3 Principal Reduction Amount: The Class Y Principal Reduction - Amount for the Class Y-3 Regular Interest as determined pursuant to the provisons of the Appendix 1.

Class Y-3 Regular Interest: The uncertificated undivided beneficial interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Y-4 Principal Distribution Amount: For any Distribution Date, the - excess, if any, of the Class Y-4 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Y-4 Regular Interest on such Distribution Date.

Class Y-4 Principal Reduction Amount: The Class Y Principal Reduction - Amount for the Class Y-4 Regular Interest as determined pursuant to the provisons of the Appendix 1.

Class Y-4 Regular Interest: The uncertificated undivided beneficial interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Y-5 Principal Distribution Amount: For any Distribution Date, the - excess, if any, of the Class Y-5 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Y-5 Regular Interest on such Distribution Date.

Class Y-5 Principal Reduction Amount: The Class Y Principal Reduction - Amount for the Class Y-5 Regular Interest as determined pursuant to the provisons of the Appendix 1.

Class Y-5 Regular Interest: The uncertificated undivided beneficial interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Z Principal Reduction Amounts: For any Distribution Date, the - amounts by which the Uncertificated Principal Balances of the Class Z Regular Interests will be reduced on such Distribution Date by the allocation of Realized Losses and the distribution of principal, which shall be in each case the excess of (A) the sum of (x) the excess of the REMIC I Available Distribution Amount for the related Group (i.e. the "related Group" for the Class Z-1 Regular Interest is the Group I Loans, the "related Group" for the Class Z-2 Regular Interest is the Group II Loans, the "related Group" for the Class Z-3 Regular Interest is the Group III Loans, the "related Group" for the Class Z-4 Regular Interest is the Group IV Loans and the "related Group" for the Class Z-5 Regular Interest is the Group V Loans) over the sum of the amounts thereof distributable (i) in respect of interest on such Class Z Regular Interest and the related Class Y Regular Interest, (ii) to such Class Z Regular Interest and the related Class Y Regular Interest pursuant to clause (c)(ii) of the definition of "REMIC I Distribution Amount" and (iii) in the case of the Group I Loans, to the Class R Residual Interest and (y) the amount of Realized Losses allocable to principal for the related Group over (B) the Class Y Principal Reduction Amount for the related Group.

Class Z Regular Interests: The Class Z-1, Class Z-2, Class Z-3, Class Z-4 and Class Z-5 Regular Interests.

Class Z-1 Principal Distribution Amount: For any Distribution Date, the - excess, if any, of the Class Z-1 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Z-1 Regular Interest on such Distribution Date.

Class Z-1 Principal Reduction Amount: The Class Z Principal Reduction - Amount for the Class Z-1 Regular Interest as determined pursuant to the provisons of the Appendix 1.

Class Z-1 Regular Interest: The uncertificated undivided beneficial interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Z-2 Principal Distribution Amount: For any Distribution Date, the - excess, if any, of the Class Z-2 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Z-2 Regular Interest on such Distribution Date.

Class Z-2 Principal Reduction Amount: The Class Z Principal Reduction - Amount for the Class Z-2 Regular Interest as determined pursuant to the provisons of the Appendix 1.

Class Z-2 Regular Interest: The uncertificated undivided beneficial interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Z-3 Principal Distribution Amount: For any Distribution Date, the - excess, if any, of the Class Z-3 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Z-3 Regular Interest on such Distribution Date .

Class Z-3 Principal Reduction Amount: The Class Z Principal Reduction - Amount for the Class Z-3 Regular Interest as determined pursuant to the provisons of the Appendix 1.

Class Z-3 Regular Interest: The uncertificated undivided beneficial interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Z-4 Principal Distribution Amount: For any Distribution Date, the - sum of (A) the excess, if any, of the Class Z-4 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Z-4 Regular Interest on such Distribution Date.

Class Z-4 Principal Reduction Amount: The Class Z Principal Reduction - Amount for the Class Z-4 Regular Interest as determined pursuant to the provisons of the Appendix 1.

Class Z-4 Regular Interest: The uncertificated undivided beneficial interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Z-5 Principal Distribution Amount: For any Distribution Date, the - excess, if any, of the Class Z-5 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Z-5 Regular Interest on such Distribution Date.

Class Z-5 Principal Reduction Amount: The Class Z Principal Reduction - Amount for the Class Z-5 Regular Interest as determined pursuant to the provisons of the Appendix 1.

Class Z-5 Regular Interest: The uncertificated undivided beneficial interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Closing Date: February 27, 2004.

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

Compensating Interest Payment: As defined in Section 6.06. -

Corporate Trust Office: The designated office of the Trustee where at any particular time its corporate trust business with respect to this Agreement shall be administered, which office at the date of the execution of this Agreement is located at 4 New York Plaza, 6th Floor, New York, New York 10004, Attention: Institutional Trust Services/Global Debt, Bear Stearns ALT-A Trust 2004-1. For the purpose of registration and transfer and exchange only, the Corporate Trust Office shall be located at 2001 Bryan Street, 8th Floor, Dallas, Texas, 75201, Attn: ITS Transfer Department.

Cross-Over Date: The first Distribution Date on which the aggregate Current Principal Amount of the Subordinate Certificates has been reduced to zero.

Current Principal Amount: With respect to any Certificate (other than an Interest Only Certificate) as of any Distribution Date, the initial principal amount of such Certificate plus any Subsequent Recoveries added to the Current Principal Amount of such Certificate pursuant to Section 6.02(h) hereof, 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 (other than Realized Losses resulting from Debt Service Reductions) allocated prior to such Distribution Date to such Certificate, taking account of the Loss Allocation Limitation and (iii) in the case of a Subordinate Certificate, such Certificate's pro rata share, if any, of the applicable Subordinate Certificate Writedown Amount for previous Distribution Dates. With respect to any Class of Certificates (other than an Interest Only Certificate), the Current Principal Amount thereof will equal the sum of the Current Principal Amounts of all Certificates in such Class. The initial Current Principal Amount for each Class of Certificates is set forth in Section 5.01(c)(iv). Notwithstanding the foregoing, solely for purposes of giving consents, directions, waivers, approvals, requests and notices, the Class R Certificates after the Distribution Date on which the principal thereof has been paid in full shall be deemed to have a Current Principal Amount equal to the Current Principal Amount thereof 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: February 1, 2004.

Cut-off Date Balance: $616,139,092.75.

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

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

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

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

Depository Agreement: The meaning specified in Section 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 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 2004-1 REMIC contained in the Trust or any Person having an ownership interest in the Residual Certificate (other than such Person) to incur a liability for any federal tax imposed under the Code that would not otherwise be imposed but for the transfer of an ownership interest in a Residual Certificate to such Person. The terms "United States," "State" and "international organization" shall have the meanings set forth in Section 7701 of the Code or successor provisions.

Distribution Account: The trust account or accounts created and - maintained pursuant to Section 4.04, which shall be denominated "JPMorgan Chase Bank, as Trustee f/b/o holders of Structured Asset Mortgage Investments II Inc., Bear Stearns ALT-A Trust, Mortgage Pass-Through Certificates, Series 2004-1 - Distribution Account." The Distribution Account shall be an Eligible Account.

Distribution Account Deposit Date: The Business Day prior to each Distribution Date.

Distribution Date: The 25th day of any month, beginning in 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: JPMorgan Chase Bank, 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 Servicing Agreement.

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

Eligible Account: Any of (i) a segregated account maintained with a - federal or state chartered depository institution (A) the short-term obligations of which are rated A-1 or better by Standard & Poor's 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.

EMC: EMC Mortgage Corporation, and any successor thereto. -

Event of Default: As defined in Section 8.01.

EverHome: EverHome Mortgage Company (formerly known as Alliance Mortgage Corporation), and any successor thereto.

EverHome Servicing Agreement: The Subservicing Agreement, dated as of January 1, 2002, as amended, between EverHome (as successor to Alliance Mortgage Company) and EMC attached hereto as Exhibit H-1.

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 and any successor thereto.

FDIC: Federal Deposit Insurance Corporation and 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, or Notional Amount in the case of the Interest Only Certificates, of such Certificate and the denominator of which is the Current Principal Amount, or Notional Amount in the case of the Interest Only Certificates, of such Class. With respect to the Certificates in the aggregate, the fractional undivided interest evidenced by (i) a Residual Certificate will be deemed to equal 1.0%, (ii) each Interest Only Certificate will be deemed to equal 1.0% multiplied by a fraction, the numerator of which is the Notional Amount of such Certificate and the denominator of which is the aggregate Notional Amount of such respective Class and (iii) a Certificate of any other Class will be deemed to equal 92.00% multiplied by a fraction, the numerator of which is the Current Principal Amount of such Certificate and the denominator of which is the aggregate Current Principal Amount of all the Certificates; provided, however, the percentage in clause (iii) above shall be increased by 1.0% upon the retirement of each Class of Interest Only Certificates.

Freddie Mac: Freddie Mac, formerly the Federal Home Loan Mortgage Corporation, and 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).

GreenPoint: GreenPoint Mortgage Funding, Inc., and any successor thereto.

GreenPoint Servicing Agreement: The Purchase, Warranties and Servicing Agreement, dated as of September 1, 2003, between GreenPoint and EMC attached hereto as Exhibit H-2.

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 Certificates: The Class I-A-1, Class I-X-A-1, Class I-A-2 and Class I-X-A-2 Certificates.

Group I Loans: The Mortgage Loans identified as such on the Mortgage - Loan Schedule.

Group II Certificates: The Class II-A-1, Class II-X-A-1, Class II-A-2, - Class II-X-A-2, Class II-A-3 and Class II-X-A-3 Certificates.

Group II Loans: The Mortgage Loans identified as such on the Mortgage Loan Schedule.

Group III Certificates: The Class III-A-1 Certificates and Class III-X-A-1 Certificates.

Group III Loans: The Mortgage Loans identified as such on the Mortgage - Loan Schedule.

Group IV Certificates: The Class IV-A-1 Certificates and the Class IV-X-A-1 Certificates.

Group IV Loans: The Mortgage Loans identified as such on the Mortgage Loan Schedule.

Group V Certificates: The Class V-A-1 Certificates.

Group V Loans: The Mortgage Loans identified as such on the Mortgage - Loan Schedule.

Holder: The Person in whose name a Certificate is registered in the Certificate Register, except that, subject to Sections 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 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 Only Certificates: The Class I-X-A-1, Class I-X-A-2, Class - II-X-A-1, Class II-X-A-2, Class II-X-A-3, Class III-X-A-1 and Class IV-X-A-1 Certificates.

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

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

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

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

prepaid) at the annual interest 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.

Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the - 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 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 Servicer in connection with the liquidation of such Mortgage Loan and the related Mortgage Property, such expenses including (a) property protection expenses, (b) property sales expenses, (c) foreclosure and sale costs, including court costs and reasonable attorneys' fees, and (d) similar expenses reasonably paid or incurred in connection with liquidation.

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

Loan Group: Loan Group I, Loan Group II, Loan Group III, Loan Group IV and Loan Group V, as applicable.

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

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

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

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

Loan Group V: The group of Mortgage Loans designated as belonging to Loan Group V 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 that meet the qualifications of the Servicing Agreements and this Agreement.

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

Master Servicer Collection Account: The trust account or accounts - created and maintained pursuant to Section 4.02, which shall be denominated "JPMorgan Chase Bank, as Trustee f/b/o holders of Structured Asset Mortgage Investments II Inc., Bear Stearns ALT-A Trust, Mortgage Pass-Through Certificates, Series 2004-1, 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 Mortgage Loans - 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.

Monthly Advance: An advance of principal or interest required to be made by the Servicer pursuant to the 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, with respect to each Mortgage 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 February 27, 2004, between EMC, 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.

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

Notional Amount: The Notional Amount of the Class I-X-A-1 Certificates, - as of any date of determination, is equal to the Current Principal Amount of the Class I-A-1 Certificates. The Notional Amount of the Class I-X-A-2 Certificates, as of any date of determination, is equal to the Current Principal Amount of the Class I-A-2 Certificates. The Notional Amount of the Class II-X-A-1 Certificates, as of any date of determination, is equal to the Current Principal Amount of the Class II-A-1 Certificates. The Notional Amount of the Class II-X-A-2 Certificates, as of any date of determination, is equal to the Current Principal Amount of the Class II-A-2 Certificates. The Notional Amount of the Class II-X-A-3 Certificates, as of any date of determination, is equal to the Current Principal Amount of the Class II-A-3 Certificates. The Notional Amount of the Class III-X-A-1 Certificates, as of any date of determination, is equal to the Current Principal Amount of the Class III-A-1 Certificates. The Notional Amount of the Class IV-X-A-1 Certificates, as of any date of determination, is equal to the Current Principal Amount of the Class IV-A-1 Certificates.

Offered Certificates: The Class I-A-1, Class I-X-A-1, Class I-A-2, - Class I-X-A-2, Class II-A-1, Class II-X-A-1, Class II-A-2, Class II-X-A-2, Class II-A-3, Class II-X-A-3, Class III-A-1, Class III-X-A-1, Class IV-A-1, Class IV-X-A-1, Class V-A-1, Class R, Class M, Class B-1, Class B-2 and Class B-3 Certificates.

Offered Subordinate Certificates: The Class B-l, Class B-2 and Class B-3 Certificates.

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

Opinion of Counsel: A written opinion of counsel who is or are acceptable to the Trustee 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.

Optional Termination Date: The Distribution Date on which the aggregate - Scheduled Principal Balance of the Mortgage Loans is less than 10% of the Cut-off Date Balance.

Original Subordinate Principal Balance: The sum of the aggregate - Current Principal Amounts of each Class of Subordinate Certificates as of the Closing Date.

Original Value: The lesser of (i) the Appraised Value or (ii) the sales price of a Mortgaged Property at the time of origination of a Mortgage Loan, except in instances where either clauses (i) or (ii) is unavailable, the other may be used to determine the Original Value, or if both clauses (i) and (ii) are unavailable, Original Value may be determined from other sources reasonably acceptable to the Depositor. Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage Loan which, prior to such Due Date, was not the subject of a Principal Prepayment in full, did not become a Liquidated Mortgage Loan and was not purchased or replaced.

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

Pass-Through Rate: As to each Class of Certificates, the REMIC I Regular Interests, REMIC II Regular Interests and REMIC III 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;

(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 the Master Servicer or any affiliate of the Trustee or the Master Servicer acts as a manager or an advisor; provided, however, that no instrument or security shall be a Permitted Investment if such instrument or security evidences a right to receive only interest payments with respect to the obligations underlying such instrument or if such security provides for payment of both principal

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

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

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

Physical Certificates: The Residual Certificates and the Private Certificates.

Plan: The meaning specified in Section 5.07(a).

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 or Class B-6 Certificate.

Protected Account: An account established and maintained for the benefit of Certificateholders by the Servicer with respect to the related Mortgage Loans and with respect to REO Property pursuant to the Servicing Agreement.

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

Qualified Insurer: Any insurance company duly qualified as such under the laws of the state or states in which the related Mortgaged Property or Mortgaged Properties is or are located, duly authorized and licensed in such state or states to transact the type of insurance business in which it is engaged and approved as an insurer by the Master Servicer, so long as the claims

paying ability of which is acceptable to the Rating Agencies for pass-through certificates having the same rating as the Certificates rated by the Rating Agencies as of the Closing Date.

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

Realized Losses on the Mortgage Loans shall be allocated to the REMIC I Regular Interests as follows: (1) The interest portion of Realized Losses and Net Interest Shortfalls on the Group I Loans, if any, shall be allocated between the Class Y-1 and Class Z-1 Regular Interests pro rata according to the amount of interest accrued but unpaid thereon, in reduction thereof; (2) the interest portion of Realized Losses and Net Interest Shortfalls on the Group II Loans, if any, shall be allocated between the Class Y-2 and Class Z-2 Regular Interests pro rata according to the amount of interest accrued but unpaid thereon, in reduction thereof; (3) the interest portion of Realized Losses and Net Interest Shortfalls on the Group III Loans, if any, shall be allocated between the Class Y-3 and Class Z-3 Regular Interests pro rata according to the amount of interest accrued but unpaid thereon, in reduction thereof; (4) the interest portion of Realized Losses and Net Interest Shortfalls on the Group IV Loans, if any, shall be allocated between the Class Y-4 and Class Z-4 Regular Interests pro rata according to the amount of interest accrued but unpaid thereon, in reduction thereof; and (5) the interest portion of Realized Losses and Net Interest Shortfalls on the Group V Loans, if any, shall be allocated between the Class Y-5 and Class Z-5 Regular Interests pro rata according to the amount of interest accrued but unpaid thereon, in reduction thereof. Any interest portion of such Realized Losses in excess of the amount allocated pursuant to the preceding sentence shall be treated as a principal portion of Realized Losses not attributable to any specific Mortgage Loan in such Group and allocated pursuant to the succeeding sentences. The principal portion of Realized Losses with respect to the Mortgage Loans shall be allocated to the REMIC I Regular Interests as follows: (1) the principal portion of Realized Losses on the Group I Loans shall be allocated, first, to the Class Y-1 Regular Interest to the extent of the Class Y-1 Principal Reduction Amount in reduction of the Uncertificated Principal Balance of such Regular Interest and, second, the remainder, if any, of such principal portion of such Realized Losses shall be allocated to the Class Z-1 Regular Interest in reduction of the Uncertificated Principal Balance thereof; (2) the principal portion of Realized Losses on the Group II Loans shall be allocated, first, to the Class Y-2 Regular Interest to the extent of the Class Y-2 Principal Reduction Amount in reduction of the Uncertificated Principal Balance of such Regular Interest and, second, the remainder, if any, of such principal portion of such Realized Losses shall be allocated to the Class Z-2 Regular Interest in reduction of the Uncertificated Principal Balance thereof; (3) the principal portion of Realized Losses on the Group III Loans shall be allocated, first, to the Class Y-3 Regular Interest to the extent of the Class Y-3 Principal Reduction Amount in reduction of the Uncertificated Principal Balance of such Regular Interest and, second, the remainder, if any, of such principal portion of such

Realized Losses shall be allocated to the Class Z-3 Regular Interest in reduction of the Uncertificated Principal Balance thereof; (4) the principal portion of Realized Losses on the Group IV Loans shall be allocated, first, to the Class Y-4 Regular Interest to the extent of the Class Y-4 Principal Reduction Amount in reduction of the Uncertificated Principal Balance of such Regular Interest and, second, the remainder, if any, of such principal portion of such Realized Losses shall be allocated to the Class Z-4 Regular Interest in reduction of the Uncertificated Principal Balance thereof; and (5) the principal portion of Realized Losses on the Group V Loans shall be allocated, first, to the Class Y-5 Regular Interest to the extent of the Class Y-5 Principal Reduction Amount in reduction of the Uncertificated Principal Balance of such Regular Interest and, second, the remainder, if any, of such principal portion of such Realized Losses shall be allocated to the Class Z-5 Regular Interest in reduction of the Uncertificated Principal Balance thereof. For any Distribution Date, reductions in the Uncertificated Principal Balances of the Class Y and Class Z Regular Interest pursuant to this definition of Realized Loss shall be determined, and shall be deemed to occur, prior to any reductions of such Uncertificated Principal Balances by distributions on such Distribution Date.

Record Date: For each Class of Certificates, 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).

Related Class: (a) The Classes of Certificates and REMIC II Regular Interests shall be treated as "Related Classes" as set forth in the following chart.

REMIC II Regular

         Interest                  Related Certificates
         -----------------         --------------------
         A-I-1-M                   I-A-1, I-X-A-1
         A-I-2-M                   I-A-2, I-X-A-2
         A-II-1-M                  II-A-1, II-X-A-1
         A-II-2-M                  II-A-2, II-X-A-2
         A-II-3-M                  II-A-3, II-X-A-3
         A-III-1-M                 III-A-1, III-X-A-1
         A-IV-1-M                  IV-A-1, IV-X-A-1
         A-V-M                     V-A-1
         M-M                       M
         B-1-M                     B-1
         B-2-M                     B-2
         B-3-M                     B-3
         B-4-M                     B-4
         B-5-M                     B-5
         B-6-M                     B-6

(b) The Class of Certificates and REMIC III Regular Interests of the same designation shall be treated as Related Classes.

Relief Act: The Servicemembers Civil Relief Act, as amended, or similar state law.

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

REMIC: A "real estate mortgage investment conduit" within the meaning - of Section 860D of the Code.

REMIC Administrator: The Trustee; provided that if the REMIC - Administrator is found by a court of competent jurisdiction to no longer be able to fulfill its obligations as REMIC Administrator under this Agreement the Servicer or Trustee acting as Servicer shall appoint a successor REMIC Administrator, subject to assumption of the REMIC Administrator obligations under this Agreement.

REMIC Interest: Any of REMIC I Interests, REMIC II Interests and REMIC III Interests.

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 2004-1 REMIC to fail to qualify as a REMIC while any regular interest in such 2004-1 REMIC is outstanding, (ii) result in a tax on prohibited transactions with respect to any 2004-1 REMIC or (iii) constitute a taxable contribution to any 2004-1 REMIC after the Startup Day.

REMIC Provisions: The provisions of the federal income tax law relating to REMICs, 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.

REMIC Regular Interest: Any of REMIC I Regular Interests, REMIC II Regular Interests and REMIC III Regular Interests.

REMIC I: The segregated pool of assets, with respect to which a REMIC - election is made pursuant to this Agreement, consisting of:

(a) the Mortgage Loans and the related Mortgage Files and collateral securing such Mortgage Loans,

(b) all payments on and collections in respect of the Mortgage Loans due after the Cut-off Date as shall be on deposit in the Master Servicer Collection Account or in the Distribution Account and identified as belonging to the Trust Fund,

(c) property that secured a Mortgage Loan and that has been acquired for the benefit of the Certificateholders by foreclosure or deed in lieu of foreclosure,

(d) the hazard insurance policies and Primary Mortgage Insurance Policy, if any, and

(e) all proceeds of clauses (a) through (d) above.

REMIC I Available Distribution Amount: For each Loan Group for any Distribution Date, the Available Funds for such Loan Group.

REMIC I Distribution Amount: For any Distribution Date, the REMIC I Available Distribution Amount shall be distributed to the REMIC I Regular Interests and the Class R Residual Interest in the following amounts and priority:

(a) To the extent of the REMIC I Available Distribution Amount for Loan Group I:

                  (i) first,  to Class Y-1 and Class Z-1 Regular  Interests  and
         Component   I  of  the   Class  R   Certificates,   concurrently,   the
         Uncertificated Interest for such Classes remaining unpaid from previous
         Distribution  Dates, pro rata according to their  respective  shares of
         such unpaid amounts;

                  (ii) second,  to the Class Y-1 and Class Z-1 Regular Interests
         and  Component  I  of  the  Class  R  Certificates,  concurrently,  the
         Uncertificated  Interest for such Classes for the current  Distribution
         Date, pro rata according to their respective Uncertificated Interest;

                  (iii) third, to Component I of the Class R Certificates, until
         the Uncertificated  Principal Balance thereof has been reduced to zero;
         and

                  (iv) fourth, to the Class Y-1 and Class Z-1 Regular Interests,
         the Class Y-1 Principal Distribution Amount and the Class Z-1 Principal
         Distribution Amount, respectively.

                  (i) first,  to the Class Y-2 and Class Z-2 Regular  Interests,
         concurrently,  the  Uncertificated  Interest for such Classes remaining
         unpaid from previous  Distribution  Dates,  pro rata according to their
         respective shares of such unpaid amounts;

                  (ii) second, to the Class Y-2 and Class Z-2 Regular Interests,
         concurrently,  the  Uncertificated  Interest  for such  Classes for the
         current  Distribution  Date,  pro rata  according  to their  respective
         Uncertificated Interest; and

                  (iii) third, to the Class Y-2 and Class Z-2 Regular Interests,
         the Class Y-2 Principal Distribution Amount and the Class Z-2 Principal
         Distribution Amount, respectively.

                  (i) first,  to the Class Y-3 and Class Z-3 Regular  Interests,
         concurrently,  the  Uncertificated  Interest for such Classes remaining
         unpaid from previous  Distribution  Dates,  pro rata according to their
         respective shares of such unpaid amounts;

                  (ii) second, to the Class Y-3 and Class Z-3 Regular Interests,
         concurrently,  the  Uncertificated  Interest  for such  Classes for the
         current  Distribution  Date,  pro rata  according  to their  respective
         Uncertificated Interest; and

                  (iii) third, to the Class Y-3 and Class Z-3 Regular Interests,
         the Class Y-3 Principal Distribution Amount and the Class Z-3 Principal
         Distribution Amount, respectively.

                  (i) first,  to the Class Y-4 and Class Z-4 Regular  Interests,
         concurrently,  the  Uncertificated  Interest for such Classes remaining
         unpaid from previous  Distribution  Dates,  pro rata according to their
         respective shares of such unpaid amounts;

                  (ii) second, to the Class Y-4 and Class Z-4 Regular Interests,
         concurrently,  the  Uncertificated  Interest  for such  Classes for the
         current  Distribution  Date,  pro rata  according  to their  respective
         Uncertificated Interest; and

                  (iii) third, to the Class Y-4 and Class Z-4 Regular Interests,
         the Class Y-4 Principal Distribution Amount and the Class Z-4 Principal
         Distribution Amount, respectively.

                  (i) first,  to the Class Y-5 and Class Z-5 Regular  Interests,
         concurrently,  the  Uncertificated  Interest for such Classes remaining
         unpaid from previous  Distribution  Dates,  pro rata according to their
         respective shares of such unpaid amounts;

                  (ii) second, to the Class Y-5 and Class Z-5 Regular Interests,
         concurrently,  the  Uncertificated  Interest  for such  Classes for the
         current  Distribution  Date,  pro rata  according  to their  respective
         Uncertificated Interest; and

                  (iii) third, to the Class Y-5 and Class Z-5 Regular Interests,
         the Class Y-5 Principal Distribution Amount and the Class Z-5 Principal
         Distribution Amount, respectively.

                  (i)  first,  to each  Class  of  Class Y and  Class Z  Regular
         Interests,  pro rata according to the amount of  unreimbursed  Realized
         Losses allocable to principal  previously allocated to each such Class;
         provided,  however,  that  any  amounts  distributed  pursuant  to this
         paragraph  (e)(i) of this  definition of "REMIC I Distribution  Amount"
         shall not cause a reduction in the Uncertificated Principal Balances of
         any of the Class Y and Class Z Regular Interests; and

                  (ii) second,  to the Component I of the Class R  Certificates,
         the  Residual  Distribution  Amount  for  Component  I of the  Class  R
         Certificates for such Distribution Date.

REMIC I Regular Interest: Any of the eight separate non-certificated - beneficial ownership interests in REMIC I set forth in Section 5.01(c) and issued hereunder and designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest shall accrue interest at the Uncertificated Pass-Through Rate specified for such REMIC I Interest in Section 5.01(c), and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in Section 5.01(c). The designations for the respective REMIC I Regular Interests are set forth in Section 5.01(c).

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

REMIC II Interests: The REMIC II Regular Interests.

REMIC III Regular Interests: As defined in Section 5.01(c). -

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

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