Document:

UNIT PURCHASE AGREEMENT

                                      among

                          PRIMESOURCE HEALTHCARE, INC.

                                       and

                       THE PURCHASERS NAMED IN SCHEDULE I

                            Dated as of June 28, 2001

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                               TABLE OF CONTENTS

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                                                                            ----

                              ARTICLE I- THE UNITS

SECTION 1.01     Issuance and Sale of the Units................................1
                 ------------------------------

SECTION 1.02     Closing and Delivery of the Units.............................1
                 ---------------------------------

SECTION 1.03     Additional Closings...........................................1
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                  ARTICLE II - REPRESENTATIONS AND WARRANTIES
                                 OF THE COMPANY

SECTION 2.01     Organization, Qualifications and Corporate Power..............2
                 ------------------------------------------------
SECTION 2.02     Authorization of Agreements, Etc..............................3
                 --------------------------------
SECTION 2.03     Validity......................................................3
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SECTION 2.04     Authorized Capital Stock......................................3
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SECTION 2.05     Third Party Approvals.........................................4
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SECTION 2.06     Litigation....................................................5
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SECTION 2.07     Financial Statements..........................................5
                 --------------------
SECTION 2.08     Absence of Certain Changes....................................6
                 --------------------------
SECTION 2.09     Proprietary Information of Third Parties......................7
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SECTION 2.10     Patents, Trademarks, Copyrights, Etc..........................7
                 ------------------------------------
SECTION 2.11     Compliance with Law...........................................8
                 -------------------
SECTION 2.12     Certain Other Agreements......................................9
                 ------------------------
SECTION 2.13     Offering of the Units.........................................9
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SECTION 2.14     Brokers.......................................................9
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SECTION 2.15     Employees.....................................................9
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SECTION 2.16     U.S. Real Property Holding Corporation.......................10
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SECTION 2.17     Taxes........................................................10
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SECTION 2.18     Environmental Matters........................................11
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SECTION 2.19     Affiliate Transactions.......................................12
                 ----------------------
SECTION 2.20     Certain Regulatory Matters...................................12
                 --------------------------
SECTION 2.21     Certain Additional Regulatory Matters........................12
                 -------------------------------------
SECTION 2.22     Medicare/Medicaid Participation..............................13
                 -------------------------------
SECTION 2.23     Compliance with Medicare/Medicaid
                 ---------------------------------
                 and Insurance Programs.......................................14
                 ----------------------

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SECTION 2.24     Insurance....................................................15
                 ---------
SECTION 2.25     Real Property and Leaseholds.................................15
                 ----------------------------
SECTION 2.26     Tangible Assets..............................................16
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SECTION 2.27     Customer and Vendor Relations................................16
                 -----------------------------
SECTION 2.28     Books and Records............................................16
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SECTION 2.29     Disclosure...................................................17
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            ARTICLE III - REPRESENTATIONS, WARRANTIES AND COVENANTS
                               OF THE PURCHASERS

SECTION 3.01     Representations..............................................17
                 ---------------

                   ARTICLE IV - CONDITIONS TO THE OBLIGATIONS
                               OF THE PURCHASERS

SECTION 4.01     Conditions...................................................18
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                      ARTICLE V - COVENANTS OF THE COMPANY

SECTION 5.01     Financial Statements, Reports, Etc...........................20
                 ----------------------------------
SECTION 5.02     Reserve for Conversion Shares
                 -----------------------------
                      and for Conversion of Series E Shares
SECTION 5.03     Corporate Existence..........................................22
                 -------------------
SECTION 5.04     Properties, Business, Insurance..............................22
                 -------------------------------
SECTION 5.05     Inspection, Consultation and Advice..........................23
                 -----------------------------------
SECTION 5.06     Restrictive Agreements Prohibited............................23
                 ---------------------------------
SECTION 5.07     Transactions with Affiliates.................................23
                 ----------------------------
SECTION 5.08     Use of Proceeds..............................................23
                 ---------------
SECTION 5.09     Activities of Subsidiaries...................................23
                 --------------------------
SECTION 5.10     Compliance with Laws.........................................24
                 --------------------
SECTION 5.11     Keeping of Records and Books of Account......................24
                 ---------------------------------------
SECTION 5.12     Certain Transactions.........................................24
                 --------------------
SECTION 5.13     Publication Matters..........................................26
                 -------------------
SECTION 5.14     Certain Insurance and Liability Matters......................27
                 ---------------------------------------
SECTION 5.15     Indemnification..............................................27
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SECTION 5.16     Key Man Insurance............................................28
                 -----------------
SECTION 5.17     Termination of Covenants.....................................29
                 ------------------------

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                           ARTICLE VI - MISCELLANEOUS

SECTION 6.01     Expenses.....................................................29
                 --------
SECTION 6.02     Survival of Agreements.......................................29
                 ----------------------
SECTION 6.03     Brokerage....................................................30
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SECTION 6.04     Parties in Interest..........................................30
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SECTION 6.05     Notices......................................................30
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SECTION 6.06     Governing Law; Jury Trial Waiver.............................30
                 --------------------------------
SECTION 6.07     Injunctive Relief............................................31
                 -----------------
SECTION 6.08     Assignment...................................................31
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SECTION 6.09     Limitation of Liability......................................31
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SECTION 6.10     Entire Agreement.............................................31
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SECTION 6.11     Counterparts.................................................32
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SECTION 6.12     Amendments...................................................32
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SECTION 6.13     Severability.................................................32
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SECTION 6.14     Titles and Subtitles.........................................32
                 --------------------
SECTION 6.15     Certain Defined Term.........................................32
                 ---------------------

<PAGE>

    THIS UNIT PURCHASE AGREEMENT (this "Agreement"),  dated as of June 28, 2001,
is made by and among PrimeSource Healthcare,  Inc., a Massachusetts  corporation
(the  "Company"),   and  the  purchasers  named  in  the  attached   Schedule  I
(individually, each a "Purchaser" and collectively, the "Purchasers").

    WHEREAS,  the Company wishes to issue and sell to the Purchasers  units (the
"Units"),  each  consisting  of a share  of  authorized  but  unissued  Series E
Convertible  Preferred  Stock,  no par  value,  of the  Company  (the  "Series E
Preferred Stock"), substantially in the form of Exhibit A attached hereto, and a
certain  number  of  warrants  (the  "Warrants"),  substantially  in the form of
Exhibit B attached hereto, exercisable for shares of the Common Stock, par value
$0.01,  of the Company  (the "Common  Stock").  The Units will have an aggregate
purchase price of up to $5,200,000; and

    WHEREAS, the Purchasers,  severally, wish to purchase the Units on the terms
and subject to the conditions set forth in this Agreement;

    NOW,  THEREFORE,  in  consideration of the premises and the mutual covenants
contained in this Agreement, and for other good and valuable consideration,  the
receipt and  adequacy  of which are hereby  acknowledged,  the parties  agree as
follows:

                                    ARTICLE I
                                    THE UNITS

    SECTION  1.01  Issuance  and Sale of the  Units.  Subject  to the  terms and
conditions  of this  Agreement,  the  Company  agrees  to issue and sell to each

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Purchaser,  and each Purchaser  hereby agrees to purchase from the Company,  the
amount and type of Units set forth opposite the name of such Purchaser under the
heading  "Amount  and Type of  Units  to be  Purchased"  on  Schedule  I, at the
purchase price set forth  opposite the name of such Purchaser  under the heading
"Purchase Price for Units" on Schedule I, and  aggregating the "Purchase  Price"
for the Units.

    SECTION 1.02 CLOSING AND DELIVERY OF THE UNITS. The first closing shall take
place at the offices of Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los
Angeles,  California  90071 at 10:00  a.m.  on June 29,  2001,  or at such other
location,  date and time as may be  agreed  upon  between  the  Purchasers  of a
majority  of the Units and the Company  (such  closing  being  called the "FIRST
CLOSING" and such date and time being called the "CLOSING  DATE").  At the First
Closing,  the Company  shall issue and deliver to each  Purchaser  certificates,
registered in the name of such Purchaser, representing each of (i) the shares of
Series E  Preferred  Stock and (ii) the  Warrants,  comprising  the Units  being
purchased by it at the Closing. At the First Closing,  the Purchasers shall wire
transfer  in  immediately  available  funds  their  respective  portions  of the
Purchase Price, as set forth in Schedule I hereto.

    SECTION 1.03  ADDITIONAL  CLOSINGS.  At any time and from time to time until
ninety  (90) days  after the First  Closing,  the  Company  may,  at one or more
additional  closings  (each,  an "ADDITIONAL  CLOSING"),  without  obtaining the
signature,  consent or permission of any of the  Purchasers,  offer and sell any
remaining  unsold Units  authorized  under  Section 1.01,  above.  The shares of
Series  E  Preferred  Stock  comprising  part  of any  Unit to be  issued  in an
Additional  Closing shall be sold pursuant to, and subject to the provisions of,
this Agreement,  as modified solely to add an additional signature hereto and an
additional  name to  SCHEDULE  I  hereto.  Upon  execution  of  such  additional
signature  page,  each such  additional  purchaser shall be deemed a "Purchaser"
under this  Agreement  to the same extent as if they had been a Purchaser at the
First  Closing.  Notwithstanding  anything  to the  contrary  above,  additional
authorized  Units not sold at the First Closing or in an Additional  Closing may
be sold at any time in transactions with lenders, customers, vendors, lessors or
other commercial or strategic  partners that are  substantially not equity based
and that are approved by the Board in accordance with the Company's  Articles of
Organization.  The terms  "Closing"  and "Closing  Date" as used herein shall be
used to refer to the "First  Closing"  and/or each  "Additional  Closing" as the
context requires.

                                   ARTICLE II
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

    As of the Closing Date the Company  hereby  represents  and warrants to each
Purchaser  that,  except  as set forth in the  Disclosure  Letter  (which  makes
explicit  reference  to the  particular  representation  or warranty as to which
exception is taken, which in each case shall constitute the sole  representation
and warranty as to which such exception shall apply):

         SECTION 2.01      Organization, Qualifications and Corporate Power.
                           ------------------------------------------------

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    (a)  Each  of  the  Company  and  its  Subsidiaries  is a  corporation  duly
organized,  validly existing and in good standing under the laws of its state of
incorporation  and has all  requisite  corporate  power and authority to own and
operate its  properties  and assets,  and to carry on its  business as currently
conducted  and as proposed  to be  conducted.  The  Company is duly  licensed or
qualified to transact business as a foreign  corporation and is in good standing
in each jurisdiction in which the nature of the business transacted by it or the
character of the  properties  owned or leased by it requires  such  licensing or
qualification.  Each of the Company and its Subsidiaries has the corporate power
and authority to own and hold its properties and to carry on its business as now
conducted  and as proposed to be  conducted.  The Company (i) has the  corporate
power and authority to execute,  deliver and perform its obligations  under this
Agreement, the Warrants, the Amended and Restated Co-Sale Agreement, dated as of
June 28, 2001, among the Company,  the Purchasers and certain other stockholders
of the Company (the "AMENDED AND RESTATED  CO-SALE  AGREEMENT")  and the Amended
and Restated Registration Rights Agreement, dated as of June 28, 2001, among the
Company,  the  Purchasers  and certain  other  stockholders  of the Company (the
"Amended and Restated  Registration  Rights  Agreement,'  and together with this
Agreement,  the  Warrants  and the Amended and Restate  Co-Sale  Agreement,  the
"TRANSACTION  DOCUMENTS"),  in the forms attached hereto as EXHIBIT B, EXHIBIT C
AND EXHIBIT D,  respectively;  (ii) to issue,  sell and  deliver the Units;  and
(iii) to issue and deliver the shares of Common Stock  issuable upon exercise of
the Warrants (the "CONVERSION SHARES").

    (b) Neither the  Company,  other than with  respect to a  Subsidiary  of the
Company,  nor any of its  Subsidiaries  (i)  owns  of  record  or  beneficially,
directly or indirectly (A) any shares of capital stock or securities convertible
into capital stock of any other  corporation or (B) any participating or limited
liability company interest in any partnership,  joint venture, limited liability
company or other non-corporate business enterprise or (ii) controls, directly or
indirectly, any other entity.

    SECTION 2.02 Authorization of Agreements, Etc.
                 --------------------------------

    (a) The execution and delivery by the Company of the Transaction  Documents,
the  performance  by  the  Company  of its  obligations  under  the  Transaction
Documents,  and the  issuance,  sale and  delivery  of the Units  have been duly
authorized by all requisite  corporate action and will not violate any provision
of law,  any order of any court or other agency of  government,  the Articles of
Organization of the Company, as amended through the date hereof, a copy of which
is attached as EXHIBIT E (the  "ARTICLES OF  ORGANIZATION"),  the By-Laws of the
Company,  a copy of which are  attached  as EXHIBIT F, or any  provision  of any
indenture,  agreement  or other  instrument  to which  the  Company,  any of its
Subsidiaries,  or any of their  respective  properties  or assets  is bound,  or
conflict with,  result in a breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other instrument,
or result in the creation or imposition of any lien, charge, restriction,  claim
or encumbrance of any nature  whatsoever upon any of the properties or assets of
the Company or any of its Subsidiaries.

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    (b) The Units  consist of shares of Series E Preferred  Stock (the "SERIES E
SHARES") and the Warrants, and each has been duly authorized, and in the case of
the Series E Shares,  when issued in  accordance  with this  Agreement,  will be
validly issued,  fully paid and nonassessable shares of Series E Preferred Stock
with no personal  liability  attaching to the ownership thereof and will be free
and clear of all liens, charges,  restrictions,  claims and encumbrances imposed
by or through the Company except as set forth in the Transaction Documents.  The
Conversion Shares, when issued, will be duly authorized,  validly issued,  fully
paid and  nonassessable  shares  of  Common  Stock  with no  personal  liability
attaching  to the  ownership  thereof  and will be free and clear of all  liens,
charges, restrictions, claims and encumbrances imposed by or through the Company
except as set forth in this Agreement. Neither the issuance, sale or delivery of
the Units nor the  issuance or delivery of the  Conversion  Shares is subject to
any  preemptive  right of  stockholders  of the Company or to any right of first
refusal  or other  right in favor of any  Person  that has not been  effectively
waived or exercised pursuant to this Agreement.

    SECTION 2.03 VALIDITY. The Transaction Documents have been duly executed and
delivered by the Company and constitute legal, valid and binding  obligations of
the Company, enforceable in accordance with their terms (subject in each case as
to the  enforcement  of  remedies,  to  applicable  bankruptcy,  reorganization,
insolvency,  moratorium  and  similar  laws  affecting  the rights of  creditors
generally).

    SECTION 2.04 AUTHORIZED  CAPITAL STOCK. The authorized  capital stock of the
Company consists of (i) 50,000,000  shares of Common Stock,  (ii) 500,000 shares
of preferred stock, par value $1.00 per share, of which 344,864 shares have been
designated  Series C  Convertible  Preferred  Stock and 20,000  shares have been
designated Series D Exchangeable  Preferred Stock and (iii) 10,000,000 shares of
preferred stock, no par value per share. Immediately prior to the First Closing,
7,818,729  shares  of Common  Stock,  344,863  shares  of  Series C  Convertible
Preferred Stock and 14,008 shares of Series D Exchangeable  Preferred Stock will
be validly  issued,  fully paid and  nonassessable  with no  personal  liability
attaching to the ownership  thereof,  and no shares of Series E Preferred  Stock
shall have been  issued.  The  stockholders  of record and holders by name or by
category of subscriptions,  warrants, options, convertible securities, and other
rights  (contingent  or  other)  to  purchase  or  otherwise  acquire  Series  C
Convertible  Preferred  Stock and Series D Exchangeable  Preferred  Stock of the
Company,  and the  number  of  shares  of such  stock  and  the  number  of such
subscriptions,  warrants, options, convertible securities, and other such rights
held by each, as of immediately prior to the First Closing and as of immediately
after  the  Closing  are  as  set  forth  in  the  attached   SCHEDULE  II.  The
designations,  powers,  preferences,  rights,  qualifications,  limitations  and
restrictions in respect of each class and series of authorized  capital stock of
the Company are as set forth in the Articles of Organization and the Certificate
of Vote of Directors  Establishing  the Class of Series E Convertible  Preferred
Stock (the "SERIES E CERTIFICATE OF VOTE"),  a copy of which is attached  hereto
as  EXHIBIT  G,  and  all  such  designations,   powers,  preferences,   rights,
qualifications,  limitations and restrictions are valid, binding and enforceable
and in accordance with all applicable laws, and, (i) no Person owns of record or
is known to the Company to own beneficially  any share of Common Stock,  (ii) no
subscription,  warrant, option, convertible security, or other right (contingent
or other) to purchase or otherwise  acquire equity  securities of the Company is
authorized  or  outstanding  and (iii) there is no  commitment by the Company to

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issue  shares,  subscriptions,  warrants,  options,  convertible  equity or debt
securities,  or other  such  rights or to  distribute  to  holders of any of its
equity or debt  securities  any  evidence of  indebtedness  or asset.  Except as
provided for in the Articles of  Organization  and the Series E  Certificate  of
Vote, the Company has no obligation (contingent or other) to purchase, redeem or
otherwise  acquire any of its  securities or any interest  therein or to pay any
dividend or make any other distribution in respect thereof.  Except as set forth
in the Amended and Restated  Registration  Rights  Agreement and the Articles of
Organization and the Series E Certificate of Vote, there are no voting trusts or
agreements,  stockholders' agreements,  pledge agreements,  buy-sell agreements,
rights of first refusal, preemptive rights or proxies relating to any securities
of the  Company  whether  or not  the  Company  is a party  thereto.  All of the
outstanding  securities  of the  Company  were  issued  in  compliance  with all
applicable federal and state securities laws.

    SECTION 2.05 THIRD PARTY APPROVALS. Other than the consent of the holders of
a majority of the Company's outstanding Series C Convertible Preferred Stock, no
registration  or filing  with,  or consent or approval of or other action by any
third  party,  is or will be  necessary  for the valid  execution,  delivery and
performance by the Company of this Agreement, the issuance, sale and delivery of
the Units upon the Closing Date, or, upon exercise of the Warrants, the issuance
and delivery of the Conversion Shares,  other than filings pursuant to state and
federal  securities  laws (all of which  filings  have been made by the Company,
other than those which are  required to be made after the Closing and which will
be duly made on a timely basis) in connection with the sale of the Units.

    SECTION 2.06  LITIGATION.  As of the date hereof  there is no action,  suit,
claim,  proceeding  or  investigation  pending or, to the best of the  Company's
knowledge,  threatened against or affecting the Company or its Subsidiaries that
could  have  a  Material   Adverse  Effect  and  neither  the  Company  nor  its
Subsidiaries is subject to any order, writ,  injunction or decree entered in any
lawsuit or proceeding and the Company knows of no basis for any of the foregoing
that could have a Material Adverse Effect.

                                       8
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    SECTION 2.07 Financial Statements.
                 --------------------

    (a) The Company's audited balance sheets and audited statements of income as
of October 31, 2000,  PrimeSource  Surgical,  Inc.'s audited  balance sheets and
audited  statements  of income as of June 30, 2000 and the  Company's  unaudited
balance  sheets and  unaudited  statements of income for the  nine-month  period
ended March 31, 2001 (collectively, the "FINANCIAL STATEMENTS") are set forth on
SCHEDULE II. The Financial Statements have been prepared in accordance with GAAP
applied on a consistent  basis  throughout  the periods  indicated and with each
other  (except  that the  Financial  Statements  may not contain  all  footnotes
required by GAAP) and fairly present the financial  condition of the Company and
its  Subsidiaries  and the results of  operations  as of such dates and for such
periods indicated. Except as reflected in the Financial Statements,  neither the
Company  nor  any  of its  Subsidiaries  is a  guarantor  or  indemnitor  of any
indebtedness or Liability (as defined  herein) of any other Person.  The Company
and its  Subsidiaries  maintain a standard system of accounting  established and
administered in accordance with GAAP. The general ledger,  accounts  receivable,
accounts payable,  bank  reconciliations  and payroll records of the Company and
its Subsidiaries  have been maintained in all material  respects in the ordinary
course and  contain a  materially  correct  and  complete  record of the matters
typically contained in records of such nature.

    (b)  Neither  the  Company  nor any of its  Subsidiaries  has  received  any
management  letters or other  letters from the  Company's  or its  Subsidiaries'
independent  auditing firm(s)  relating to the results of operations,  financial
statements or internal  controls of the Company or its  Subsidiaries  insofar as
the  same  may  pertain  to  the  business  or  assets  of  the  Company  or its
Subsidiaries.

    SECTION 2.08 Absence of Certain Changes.
                 --------------------------

    (a) Since  October 31, 2000,  there has not been any change to the financial
condition of the Company or its Subsidiaries  that would have a Material Adverse
Effect on the Company or any of its  Subsidiaries or any Material Adverse Change
in the business or prospects of the Company or its Subsidiaries,  and, except as
reflected  in the  Financial  Statements,  neither  the  Company  nor any of its
Subsidiaries  has (i) declared or paid any dividends,  or authorized or made any
distribution  upon or with respect to any class or series of its capital  stock;
(ii) made capital expenditures or commitments therefore, other than such capital
expenditures  or commitments  made in the ordinary  course  consistent with past
practice;  (iii)  made any loans or  advances  to any Person  exceeding  $15,000
individually  or $30,000 in the  aggregate  (other than advances for business or
travel  expenses)  or  guaranteed  the  obligations  of any  Person;  (iv) sold,
exchanged or otherwise disposed of any of its assets or rights exceeding $15,000
individually or $30,000 in the aggregate, other than the sale, exchange or other
disposition  of its  equipment  and services in the ordinary  course of business
consistent  with past practice;  (v) incurred any material change in the assets,
liabilities,  financial condition,  operating results or business of the Company
or any of its Subsidiaries from that reflected in the Financial Statements; (vi)
suffered any damage,  destruction or loss,  whether or not covered by insurance,
that had or would have a Material Adverse Effect; (vii) waived a right or a debt
owed to it exceeding  $5,000  individually  or $25,000 in the aggregate;  (viii)

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satisfied or  discharged  any  encumbrance  or payment of any  obligation;  (ix)
agreed to or made any material  change or  amendment to any Material  Agreement;
(x)  permitted  or allowed  any of its assets to be  subjected  to any  material
encumbrance;  (xi)  written  up the value of any  inventory,  notes or  accounts
receivable  or other  assets in any  material  respect;  (xii)  licensed,  sold,
transferred, pledged, modified, disclosed, disposed of or permitted to lapse any
right to the use of any Intellectual  Property (as defined herein);  (xiii) made
any change in any method of accounting  or accounting  practice or any change in
depreciation or amortization  policies or rates previously adopted;  (xiv) paid,
lent or advanced  any amount to,  sold,  transferred  or leased any assets to or
entered into any  Material  Agreement  or material  arrangement  with any of its
Subsidiaries or entered into any agreement or arrangement whatsoever with any of
its Affiliates other than its  Subsidiaries,  except for directors' fees, travel
expense  advances and employment  compensation to officers;  or (xv) incurred or
suffered any other event or condition of any character that could  reasonably be
expected to have a Material Adverse Effect.

    (b) Since October 31, 2000, except as reflected in the Financial Statements,
neither the Company nor any of its  Subsidiaries has made any material change in
any compensation  arrangement or agreement with any employee that would increase
such employee's total compensation by more than ten percent (10%).

    SECTION 2.09  PROPRIETARY  INFORMATION OF THIRD PARTIES.  No third party has
claimed  or, to the  Company's  knowledge,  has  reason to claim that any Person
employed by or affiliated  with the Company or any of its  Subsidiaries  has (a)
violated  or may be  violating  any of the  terms  or  conditions  of his or her
employment,  non-competition or non-disclosure  agreement with such third party,
(b)  disclosed or may be  disclosing  or utilized or may be utilizing  any trade
secret or proprietary  information or  documentation  of such third party or (c)
interfered or may be  interfering in the  employment  relationship  between such
third  party and any of its  present  or former  employees.  No third  party has
requested information from the Company or any of its Subsidiaries which suggests
that such a claim might be contemplated.  To the Company's knowledge,  no Person
employed  by or  affiliated  with the  Company  or any of its  Subsidiaries  has
employed  or  proposes  to  employ  any  trade  secret  or  any  information  or
documentation  proprietary  to  any  former  employer,  except  as  licensed  or
otherwise  authorized  or  permitted  to do so,  and no  Person  employed  by or
affiliated  with  the  Company  or any  of its  Subsidiaries  has  violated  any
confidential  relationship  which such Person may have had with any third party,
in  connection  with the  development,  manufacture  or sale of any  product  or
proposed  product or the development or sale of any service or proposed  service
of the  Company or any of its  Subsidiaries,  and the  Company  has no reason to
believe there will be any such employment or violation. None of the execution or
delivery of this Agreement, or the carrying on of the business of the Company or
any of its  Subsidiaries  as  officers,  employees  or  agents  by any  officer,
employee or agent of the Company or any of its  Subsidiaries,  or the conduct or
proposed conduct of the business of the Company or any of its Subsidiaries, will
conflict with or result in a breach of the terms, conditions or provisions of or
constitute a default under any contract,  covenant or instrument under which any
such Person is obligated.

    SECTION  2.10  PATENTS,  TRADEMARKS,  COPYRIGHTS,  ETC.  Set  forth  in  the
Disclosure  Letter is a list and brief  description  of all domestic and foreign
patents, patent rights, patent applications, trademarks, trademark applications,

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service marks,  service mark applications,  trade names and copyrights,  and all
applications  for such which are in the process of being  prepared,  owned by or
registered  in the name of the Company or any of its  Subsidiaries,  or of which
the Company or any of its Subsidiaries is a licensor or licensee or in which the
Company  or any of its  Subsidiaries  has any  right,  and in each  case a brief
description of the nature of such right. The Company and its Subsidiaries own or
possess  adequate   licenses  or  other  rights  to  use  all  patents,   patent
applications,  trademarks,  trademark applications,  service marks, service mark
applications, trade names, copyrights,  manufacturing processes, formulae, trade
secrets,  customer lists and know how  (collectively,  "INTELLECTUAL  PROPERTY")
necessary to the conduct of their  business as  conducted  and as proposed to be
conducted,  and no claim is pending or, to the best of the Company's  knowledge,
threatened  on the  ground  that the  operations  of the  Company  or any of its
Subsidiaries  infringe  upon or conflict  with the asserted  rights of any other
Person  under  any  Intellectual  Property,  and to the  best  of the  Company's
knowledge  there is no basis  for any such  claim  (whether  or not  pending  or
threatened).  No claim is pending  or, to the best of the  Company's  knowledge,
threatened on the ground that any such  Intellectual  Property owned or licensed
by the  Company or any of its  Subsidiaries,  or which the Company or any of its
Subsidiaries  otherwise has the right to use, is invalid or unenforceable by the
Company  or any of its  Subsidiaries,  and there is no basis for any such  claim
(whether or not pending or threatened).  To the best of the Company's knowledge,
all  technical  information  developed by and belonging to the Company or any of
its Subsidiaries which has not been patented has been kept confidential.

    SECTION 2.11 Compliance with Law.
                 -------------------

    (a) The Company and each of its Subsidiaries is in material  compliance with
all  Applicable  Laws.  Neither  the  Company  nor any of its  Subsidiaries  has
received any notice of, nor does the Company have any knowledge of, any material
violation (or of any investigation, inspection, audit or other proceeding by any
Governmental  Entity  involving  allegations  of any material  violation) of any
Applicable  Law  involving or related to the Company or any of its  Subsidiaries
which has not been  dismissed or otherwise  disposed of. Neither the Company nor
any of its  Subsidiaries has received notice or otherwise has any knowledge that
the Company or any of its Subsidiaries is charged with, threatened with or under
investigation  with respect to, any violation of any Applicable  Law, or has any
knowledge  of any  proposed  change  in any  Applicable  Law that  would  have a
Material  Adverse Effect.  Neither the Company nor any of its  Subsidiaries  has
received any opinion or  memorandum  or legal  advice from legal  counsel to the
effect that it is exposed,  from a legal standpoint,  to any liability which may
be  material  to  its  business,  prospects,  financial  condition,  operations,
property or affairs.  There is no existing law, rule,  regulation or order,  and
the Company and each of its Subsidiaries is not aware of any proposed law, rule,
regulation  or order,  whether  federal,  state,  county or local,  which  would
prohibit the Company or any of its  Subsidiaries  from, or otherwise  materially
adversely  affect the  Company or any of its  Subsidiaries  in,  conducting  its
business in any jurisdiction in which it proposes to conduct business.

    (b) Each of the  Company and its  Subsidiaries  has,  and, to the  Company's
knowledge after due inquiry, all professional employees or agents of the Company

                                       11
<PAGE>

and  each  of  its  Subsidiaries  have,  all  licenses,   franchises,   permits,
accreditations,  authorizations,  including  consents  or orders  of, or filings
with, or other approvals from all Governmental Entities ("APPROVALS")  necessary
for the conduct of, or relating to the operation of, the business of the Company
and its Subsidiaries  and the occupancy and operation,  for its present uses, of
the real and personal  property  which the Company and its  Subsidiaries  own or
lease.  Neither the Company nor any of its Subsidiaries is in material violation
of any such Approval or any terms or conditions thereof.  All such Approvals are
in full force and  effect,  have been issued to and fully paid for by the holder
thereof and no notice or warning  from any  Governmental  Entity with respect to
the  suspension,  revocation  or  termination  of any Approval has been,  to the
knowledge of the Company,  threatened  by any  Governmental  Entity or issued or
given to the Company or its  Subsidiaries.  No such Approvals will in any way be
affected  by,  terminate  or lapse by reason of the  consummation  of all or any
portion of the transactions contemplated by this Agreement.

    SECTION 2.12 CERTAIN OTHER AGREEMENTS.  The Company has no legal obligation,
absolute or  contingent,  to any other person or firm to sell the Capital Stock,
material assets or the business of the Company or its  Subsidiaries or to effect
any merger, consolidation,  liquidation, dissolution,  recapitalization or other
reorganization of the Company or its Subsidiaries or to enter into any agreement
with respect thereto.

    SECTION  2.13  OFFERING  OF THE UNITS.  Neither  the  Company nor any Person
authorized or employed by the Company as agent,  broker,  dealer or otherwise in
connection with the offering or sale of the Units or any security of the Company
similar to the Units has offered the Units or any such similar security for sale
to, or solicited any offer to buy the Units, or any such similar  security from,
or otherwise  approached or negotiated  with respect thereto with, any Person or
Persons,  and neither the Company nor any Person  acting on its behalf has taken
or will  take any  other  action  (including,  without  limitation,  any  offer,
issuance or sale of any security of the Company under  circumstances which might
require the integration of such security with the Units under the Securities Act
or the rules and regulations of the Commission thereunder), in either case so as
to  subject  the  offering,  issuance  or sale of the Units to the  registration
provisions of the Securities Act.

    SECTION  2.14  BROKERS.   The  Company  has  no  contract,   arrangement  or
understanding  with any  broker,  finder or similar  agent  with  respect to the
transactions contemplated by this Agreement.

    SECTION  2.15  EMPLOYEES.  Each  of the  officers  of the  Company  and  its
Subsidiaries,  each key  employee  and each other  employee  now employed by the
Company or its  Subsidiaries  who has access to confidential  information of the
Company or its Subsidiaries has executed an appropriate  nondisclosure agreement
in customary form, and such agreements are in full force and effect.  No officer
or key  employee  of the  Company or any of its  Subsidiaries  has  advised  the
Company  (orally or in writing)  that he or she intends to terminate  employment
with the Company or any of its Subsidiaries.  Neither the Company nor any of its
Subsidiaries  has ever had any employees  represented  by collective  bargaining
agreements.  Each of the Company and its  Subsidiaries is in compliance with all
material Applicable Laws respecting employment  practices,  terms and conditions

                                       12
<PAGE>

of  employment  and  wages  and hours and is not  engaged  in any  unfair  labor
practice.  There is no unfair labor  practice  charge or  complaint  against the
Company or any of its  Subsidiaries  pending before the National Labor Relations
Board or any other  governmental  agency  arising out of the  activities  of the
Company or its  Subsidiaries of which the Company or any of its Subsidiaries has
received  notice or of which the Company has  knowledge,  and the Company has no
knowledge of any facts or information which would give rise thereto. There is no
labor strike or labor  disturbance  pending or, to the knowledge of the Company,
threatened  against  the  Company  or  any of its  Subsidiaries.  No  collective
bargaining  representation  petition  is  pending  or, to the  knowledge  of the
Company, threatened against the Company or any of its Subsidiaries.  Each of the
Company or its  Subsidiaries  has  complied  with all material  Applicable  Laws
relating to the  employment of labor,  including  provisions  relating to wages,
hours,  equal  opportunity,  collective  bargaining  and the  payment  of Social
Security and other taxes, and with the Employee  Retirement  Income Security Act
of 1974, as amended ("ERISA").

    SECTION 2.16 U.S. REAL PROPERTY HOLDING CORPORATION. Neither the Company nor
any of its  Subsidiaries is now nor has ever been a "United States real property
holding  corporation",  as defined in Section  897(c)(2) of the Internal Revenue
Code of 1986, as amended, and Section 1.897-2(b) of the Regulations  promulgated
by the Internal Revenue Service,  and the Company and each of its  Subsidiaries,
as applicable,  has filed with the Internal  Revenue Service all statements,  if
any, with its United States income tax returns which are required  under Section
1.897-2(h) of such Regulations.

    SECTION 2.17 TAXES. The Company and each of its Subsidiaries, as applicable,
have filed, or caused to be filed, on a timely basis all tax returns  (including
payroll,  unemployment  and other taxes related to its employees and independent
contractors)  required to be filed with any federal,  state,  local or municipal
governmental  body,  all such tax returns are true,  correct and complete in all
material respects and the Company and each of its  Subsidiaries,  as applicable,
have paid or caused to be paid all taxes, levies,  assessments,  tariffs, duties
or other fees and any interest and penalties thereon ("TAXES") imposed, assessed
or  collected  by any  governmental  body that may have  become due and  payable
pursuant to those tax returns or  otherwise.  No such federal,  state,  local or
municipal  tax returns have ever been audited by the Internal  Revenue  Service,
state or other authorities. No deficiency assessment with respect to or proposed
adjustment of any of the Company's or any of its  Subsidiaries,  as  applicable,
Federal, state, municipal or local tax returns has occurred or, to the Company's
knowledge, is threatened. There has been no tax lien imposed by any governmental
body  outstanding   against  the  business  or  the  Company's  or  any  of  its
Subsidiaries' assets or properties,  except liens for current taxes not yet due.
The reserve for Taxes on the balance sheet in the Financial  Statements is fully
adequate to cover all liabilities for Taxes with respect to periods ending on or
before the Closing Date.

    SECTION 2.18 Environmental Matters.
                 ---------------------

    (a) Each of the Company and its Subsidiaries:  (i) is, and within the period
of all applicable  statutes of limitation has been, in material  compliance with

                                       13
<PAGE>

all applicable Environmental Laws; (ii) holds all Environmental Permits (each of
which is in full force and effect) required for any of its current operations or
for any property owned, leased or otherwise operated by it; (iii) is, and within
the period of all  applicable  statutes  of  limitation  has been,  in  material
compliance with all of its Environmental  Permits;  and (iv) reasonably believes
that each of its  Environmental  Permits  currently  in effect  will be  renewed
effective prior to the expiration of such Environmental Permit.

    (b) Neither the Company nor any of its  Subsidiaries has received any notice
of  alleged,  actual  or  potential   responsibility  for,  or  any  inquiry  or
investigation regarding,  any Environmental  Condition.  Neither the Company nor
any of its  Subsidiaries  has received any notice of any other claim,  demand or
action by any individual or entity  alleging any actual or threatened  injury or
damage to any person, property, natural resource or the environment arising from
or relating to any Release or threatened Release of any Hazardous  Materials at,
on,  under,  in,  to or  from  any  Facility  or any  former  Facilities,  or in
connection with any operations or activities of the Company or its Subsidiaries.

    (c)  Neither the Company  nor any of its  Subsidiaries  has entered  into or
agreed to and is not subject to any consent decree, order or settlement or other
agreement  in any  judicial,  administrative,  arbitral or other  similar  forum
relating to compliance with or Liability under any Environmental Law.

    (d) Hazardous  Materials have not been  transported,  disposed of,  emitted,
discharged or otherwise  Released or threatened to be Released to or at any real
property   presently  or  formerly  owned  or  leased  by  the  Company  or  its
Subsidiaries, which Hazardous Materials are reasonably expected to (i) give rise
to a material  Liability  of the  Company or any of its  Subsidiaries  under any
applicable  Environmental  Law, (ii)  interfere with the Company's or any of its
Subsidiaries  continued  operations or (iii) materially  impair the fair salable
value  of any  real  property  owned  or  leased  by the  Company  or any of its
Subsidiaries.

    (e) Neither the Company nor any of its Subsidiaries has assumed or retained,
by  contract  or,  to the  knowledge  of the  Company,  by  operation  of law in
connection  with the sale or  transfer  of any assets or  business,  Liabilities
arising from or associated  with or otherwise in connection  with such assets or
business  of any  kind,  fixed or  contingent,  known or not  known,  under  any
applicable Environmental Law. Neither the Company nor any of its Subsidiaries is
required to make any material  capital or other  expenditures to comply with any
Environmental  Law nor to the  knowledge of the Company is there any  reasonable
basis on which any Governmental  Entity could take any action that would require
any such capital expenditures.

    (f) True, complete and correct copies of the written reports,  and all parts
thereof, of all environmental audits or assessments which have been conducted in
respect of any Facility or any former  Facility  within the past five (5) years,
either by the Company,  any of its  Subsidiaries or any attorney,  environmental
consultant  or  engineer  or other  Person  engaged by the Company or any of its
Subsidiaries for such purpose, have been delivered to the Purchaser.

                                    14
<PAGE>

    SECTION 2.19 AFFILIATE  TRANSACTIONS.  Except for regular  salary  payments,
warrants, rights, options and fringe benefits under an individual's compensation
package  with the  Company  or any of its  Subsidiaries,  none of the  officers,
directors,  employees  or  other  Affiliates  of  the  Company  or  any  of  its
Subsidiaries  is a  party  to  any  agreement,  understanding,  indebtedness  or
proposed  transaction  with the  Company or any of its  Subsidiaries  or, to the
Company's  knowledge,  is directly interested in any Material Agreement with the
Company  or  any  of  its  Subsidiaries.  Neither  the  Company  nor  any of its
Subsidiaries  has  guaranteed  or  assumed  any  obligations  of  its  officers,
directors, employees or other Affiliates or members of any of their families. To
the Company's knowledge,  other than as contemplated by this Agreement,  none of
the officers, directors,  employees or other Affiliates of the Company or any of
its  Subsidiaries  has any direct or indirect  ownership  interest in any Person
with which the Company or any of its Subsidiaries has a business relationship or
with any Person that competes with the Company or any of its Subsidiaries.

    SECTION 2.20 CERTAIN REGULATORY MATTERS.  Neither the Company nor any of its
Subsidiaries  has, since June 30, 1999,  received notice that the Company or any
of its  Subsidiaries  has been,  or to the  Company's  knowledge  has been,  the
subject of any  investigative  proceeding before any federal or state regulatory
authority or the agent of any such  authority,  including,  without  limitation,
federal and state health authorities.

    SECTION 2.21 CERTAIN ADDITIONAL REGULATORY MATTERS. Neither the Company, any
of its Subsidiaries nor any of their officers,  directors or managing employees,
as  that  term is  defined  in 42  C.F.R.  Section  1001.1001(a)(1),  nor to the
knowledge of the Company, the other employees or agents of any of the Company or
any of its  Subsidiaries  have engaged in any  activities  which are  prohibited
under criminal law, or are cause for civil  penalties or mandatory or permissive
exclusion  from Medicare or Medicaid,  or any other state health care program as
defined in SSA Section 1128(h) or any regulations promulgated thereunder ("STATE
HEALTH CARE  PROGRAM") or a federal health care program as defined in the Social
Security Act ("SSA") (42 U.S.C.  Section  1320a-3),  Section 1128B(f)  ("FEDERAL
HEALTH CARE PROGRAM") under Sections  1320a-7,  1320a-7a,  1320a-7b or 1395nn of
Title 42 of the United States Code, the federal Civilian Health and Medical Plan
of the Uniformed Services statute  ("CHAMPUS"),  or the regulations  promulgated
pursuant to such statutes or  regulations  or related state or local statutes or
which are  prohibited  by any private  accrediting  organization  from which the
Company  or  any  of  its  Subsidiaries  seeks  accreditation  or  by  generally
recognized professional standards of care or conduct, including, but not limited
to, the following activities:

    (a) knowingly and willfully  making or causing to be made a false  statement
or  representation  of a material  fact in any  application  for any  benefit or
payment;

    (b) knowingly and willfully making or causing to be made any false statement
or  representation  of a  material  fact for use in  determining  rights  to any
benefit or payment;

    (c)  presenting or causing to be presented a claim for  reimbursement  under
CHAMPUS,  Medicare,  Medicaid or any other State  Health Care Program or Federal

                                       15
<PAGE>

Health  Care  Program  that  is (i)  for an  item or  service  that  the  Person
presenting  or causing to be presented  knows or should know was not provided as
claimed  or (ii) for an item or  service  that the  Person  presenting  knows or
should know that the claim is false or fraudulent;

    (d) knowingly and willfully  offering,  paying,  soliciting or receiving any
remuneration (including any kickback, bribe or rebate),  directly or indirectly,
overtly  or  covertly,  in cash or in kind (i) in return  for  referring,  or to
induce  the  referral  of,  an  individual  to a Person  for the  furnishing  or
arranging  for the  furnishing  of any item or service for which  payment may be
made in whole or in part by  CHAMPUS,  Medicare  or  Medicaid or any other State
Health Care Program or any Federal Health Care Program or (ii) in return for, or
to induce the purchase,  lease or order or the arranging for or  recommending of
the purchase,  lease or order of, any good, facility,  service or item for which
payment may be made in whole or in part by CHAMPUS,  Medicare or Medicaid or any
other State Health Care Program or any Federal Health Care Program; or

    (e)  knowingly  and  willfully  making or causing to be made or  inducing or
seeking  to induce  the  making of any false  statement  or  representation  (or
omitting to state a material fact required to be stated  therein or necessary to
make the statements  contained  therein not  misleading) of a material fact with
respect to (i) the  conditions  or  operations  of a facility  in order that the
facility may qualify for CHAMPUS,  Medicare,  Medicaid or any other State Health
Care Program  certification or any Federal Health Care Program  certification or
(ii) information required to be provided under Section 1124(A) of the SSA.

    SECTION 2.22 MEDICARE/MEDICAID  PARTICIPATION.  Neither (a) the Company, any
of its  Subsidiaries  nor any other  Person  who after the  Closing  will have a
direct or indirect  ownership  interest of five  percent  (5%) or more (as those
terms are defined in 42 C.F.R. Section 1001.1001(a)(2)) in the Company or any of
its Subsidiaries,  or who will have an ownership or control interest (as defined
in SSA Section  1124(a)(3) or any  regulations  promulgated  thereunder)  in the
Company  or any of its  Subsidiaries,  or who will be an  officer,  director  or
managing  employee  (as  defined in 42 C.F.R.  Section  1001.1001(a)(1))  of the
Company or any of its  Subsidiaries,  or, to the  knowledge of the Company,  any
other employee or agent thereof,  nor (b) any Person with any relationship  with
such entity who after the Closing  will have an indirect  ownership  interest of
five  percent  (5%) or more  (as  that  term is  defined  in 42  C.F.R.  Section
1001.1001(a)(2))  in the Company,  other than any entity in which  institutional
investors  of the Company  which may be deemed to control the Company are deemed
to control such entity: (i) has had a civil monetary penalty assessed against it
under Section 1128A of the SSA or any regulations promulgated  thereunder;  (ii)
has been  excluded  from  participation  under a State  Health Care Program or a
Federal  Health  Care  Program;  or (iii)  has been  convicted  (as that term is
defined in 42 C.F.R.  Section  1001.2)  of any of the  following  categories  of
offenses as  described  in SSA  Section  1128(a)  and  (b)(1),  (2),  (3) or any
regulations promulgated thereunder:

         (A)  criminal  offenses  relating to the delivery of an item or service
    under  Medicare,  Medicaid or any other State Health Care Program or Federal
    Health Care Program;

                                       16
<PAGE>

         (B) criminal  offenses  under  federal or state law relating to patient
    neglect or abuse in  connection  with the  delivery of a health care item or
    service;

         (C)  criminal  offenses  under  federal or state law relating to fraud,
    theft,  embezzlement,  breach of fiduciary responsibility or other financial
    misconduct in connection  with the delivery of a health care item or service
    or with respect to any act or omission in a program  operated by or financed
    in whole or in part by any federal, state or local governmental agency;

         (D)  federal  or  state  laws  relating  to the  interference  with  or
    obstruction of any investigation  into any criminal offense described in (A)
    through (C) above; or

         (E)  criminal  offenses  under  federal  or state law  relating  to the
    unlawful  manufacture,   distribution,   prescription  or  dispensing  of  a
    controlled substance.

         SECTION 2.23 Compliance with Medicare/Medicaid and Insurance Programs.
                      ---------------------------------------------------------

    (a) The Company and each of its Subsidiaries is eligible to receive payments
with  respect to  operations  of its  business  under Title XVIII of the SSA and
under Title XIX of the SSA. The Company and each of its  Subsidiaries has timely
filed all claims and reports required to be filed with respect to the operations
of its  business in  connection  with all state  Medicaid  and federal  Medicare
programs,  which  claims and  reports are  complete  and  correct.  There are no
actions,  appeals or  investigations  pending  or, to the best of the  Company's
knowledge,  threatened before any entity, commission, board or agency, including
an  intermediary  or carrier or the  administrator  of the Health Care Financing
Administration, with respect to any Medicare or Medicaid claims or reports filed
by the Company or any of its Subsidiaries  with respect to the operations of its
business on or before the date hereof or program compliance matters, which would
reasonably be expected to have a material  adverse  effect on the Company or any
of its Subsidiaries.

    (b) Other than regularly scheduled audits and reviews, no validation review,
peer  review or  program  integrity  review  related  to the  operations  of the
Company,  any of its  Subsidiaries  or their  business has been conducted by any
entity, commission,  board or agency in connection with the Medicare or Medicaid
program,  and to the  best  of the  Company's  knowledge,  no such  reviews  are
scheduled, pending or threatened against or affecting such business.

    SECTION 2.24 INSURANCE.  Each insurance policy held by or for the benefit of
the Company and its  Subsidiaries  is in full force and effect.  The Company and
each of its  Subsidiaries  carry,  and will  continue to carry,  insurance  with
reputable  insurers with respect to such of its  properties and  businesses,  in
such  amounts  and  against  such risks as is  customarily  maintained  by other
entities of similar size engaged in similar  businesses.  None of such insurance
was obtained  through the use of materially  false or misleading  information or
the failure to provide the insurer  with all material  information  requested in
order to evaluate the liabilities and risks insured. Neither the Company nor any

                                       17
<PAGE>
of its  Subsidiaries  has received any notice of  cancellation or non-renewal of
any insurance policies or binders.

    SECTION 2.25 Real Property and Leaseholds.
                 ----------------------------
    (a) Each lease  agreement  and  mortgage  to which the Company or any of its
Subsidiaries  is a party is in full  force  and  effect in  accordance  with its
terms. Neither the Company, any of its Subsidiaries nor any of the other parties
to such lease  agreements  and mortgages are in default (or by the lapse of time
and/or giving of notice would otherwise be in default) in respect of such leases
and mortgages.

    (b) With  respect  to each  parcel of real  property  leased or owned by the
Company or its Subsidiaries:

              (i) the Company or its  Subsidiary,  as  applicable,  has good and
         valid title to and/or a valid and subsisting leasehold interest in each
         item of real property and leasehold, as appropriate,  free and clear of
         all mortgages, liens, encumbrances,  leases, equities, claims, charges,
         easements,  rights-of-way,   covenants,  conditions  and  restrictions,
         except for liens, if any, for property taxes not due;

              (ii) no officer,  director or employee of the  Company,  or of any
         Affiliate  of the  Company,  nor any  Affiliate  of the  Company,  owns
         directly or indirectly in whole or in part, any of such real properties
         or leaseholds; and

              (iii)  neither  the  Company  nor  any of its  Subsidiaries  is in
         default  with  respect to any  material  term or  condition of any such
         mortgage  or  lease,  nor has any event  occurred  which,  through  the
         passage of time or the  giving of notice or both,  would  constitute  a
         default  thereunder by the Company or any of its  Subsidiaries or would
         cause the  acceleration  of any obligation of the Company or any of its
         Subsidiaries or the creation of a lien or encumbrance upon any asset of
         the Company or any of its Subsidiaries.

         SECTION 2.26      Tangible Assets.
                           ---------------

    (a) Each of the Company and its  Subsidiaries has good and valid title to or
valid and subsisting  leasehold  interests in all fixtures and equipment  having
original  cost or fair  market  value in excess of $25,000,  including  all such
fixtures and  equipment  reflected in the  Company's  or its  Subsidiary's  most
recent balance sheet included in the Financial  Statements and all such fixtures
and  equipment  purchased  or  otherwise  acquired  by the Company or any of its
Subsidiaries  since the date of such balance  sheet.  None of such  fixtures and
equipment is subject to any encumbrance except for encumbrances  incurred in the
ordinary course of business or which,  individually or in the aggregate, are not
substantial  in  amount  and do not  materially  detract  from the  value of the
property or assets of the Company or any of its  Subsidiaries  or interfere with
the present use of such property or assets.

                                       18
<PAGE>

    (b) The buildings  and fixtures and equipment  owned by the Company and each
of its  Subsidiaries  are in good  operating  condition  and repair  (except for
ordinary  wear and tear),  with no  material  defects,  are  sufficient  for the
operation  of the  business  of the Company and its  Subsidiaries  as  presently
conducted and are in conformity,  in all material respects,  with all Applicable
Laws relating thereto currently in effect.

    SECTION 2.27 Customer and Vendor Relations.
                 -----------------------------

    (a) "CURRENT  CUSTOMER" means any Person from whom the Company or any of its
Subsidiaries has recognized  revenue since May 1, 1998 or to whom the Company or
any of its  Subsidiaries  has any  obligation  to  complete  work or  honor  any
contractual warranty or has any obligation or Liabilities.  Since June 30, 2000,
no Current  Customer  has  canceled or  terminated  any  Material  Agreement  or
notified  the  Company  or any of its  Subsidiaries  in writing or orally of its
intent to cancel or terminate any Material Agreement.

    (b)  "CURRENT  VENDOR"  means any Person from whom the Company or any of its
Subsidiaries  has purchased goods or services since May 1, 1998.  Since June 30,
2000,  no Current  Vendor has canceled or terminated  any Material  Agreement or
notified  the  Company  or any of its  Subsidiaries  in writing or orally of its
intent to cancel or terminate any Material Agreement.

    SECTION 2.28 BOOKS AND RECORDS. Each of the Company and its Subsidiaries has
made and kept (and  given  each  Purchaser  access  to) books  and  records  and
accounts,  which,  in  reasonable  detail,  accurately  and fairly  reflect  the
activities of the Company and its Subsidiaries.  The minute books of the Company
and  each of its  Subsidiaries  previously  made  available  to  each  Purchaser
accurately and adequately  reflect all material action  previously  taken by the
stockholders, the Board of Directors and committees of the Board of Directors of
the Company and any of its Subsidiaries, as applicable.

    SECTION 2.29 DISCLOSURE. Neither this Agreement, nor any Schedule or Exhibit
to this  Agreement  contains an untrue  statement of a material  fact or omits a
material fact necessary to make the statements  contained  herein or therein not
misleading.  None of the  statements,  documents,  certificates  or other  items
prepared  or  supplied  by  the  Company  with   respect  to  the   transactions
contemplated  hereby contains an untrue  statement of a material fact or omits a
material fact necessary to make the statements contained therein not misleading.
There is no fact  which the  Company  has not  disclosed  to the  Purchasers  in
writing and of which the Company is aware which materially and adversely affects
or could be reasonably expected to materially and adversely affect the business,
prospects, financial condition,  operations, property or affairs of the Company.
The financial  projections and other  estimates  provided to the Purchasers were
prepared by the Company  based on  assumptions  of fact and opinion as to future
events which the Company,  at the date of the issuance of such  projections  and
estimates,  believed to be reasonable. As of the date hereof, no facts have come
to the attention of the Company which would, in its opinion, require the Company

                                       19
<PAGE>
to revise or amplify  the  assumptions  underlying  such  projections  and other
estimates or the conclusions derived therefrom.

                                   ARTICLE III
                     REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS

    SECTION  3.01  REPRESENTATIONS.  Each  Purchaser  severally  represents  and
warrants to the Company that:

    (a) it is an "accredited  investor" within the meaning of Rule 501 under the
Securities  Act and was not organized for the specific  purpose of acquiring the
Units.

    (b) it has  sufficient  knowledge  and  experience in investing in companies
similar to the Company in terms of the Company's  stage of  development so as to
be able to evaluate the risks and merits of its investment in the Company and it
is able financially to bear the risks thereof;

    (c) it has had an opportunity to discuss the Company's business,  management
and financial affairs with the Company's management; and

    (d) the Units being  purchased by it are being  acquired for its own account
for the purpose of  investment  and not with a view to or for sale in connection
with any distribution thereof.

    (e) if it is a corporation duly incorporated or a limited partnership, it is
duly formed, as the case may be, validly existing and in good standing under the
laws  of its  state  of  incorporation  or  formation  and is duly  licensed  or
qualified to transact business as a foreign corporation or partnership and is in
good  standing  in  each  jurisdiction  in  which  the  nature  of the  business
transacted  by it or the  character  of the  properties  owned or  leased  by it
requires  such  licensing or  qualification;  it has the power and  authority to
execute, deliver and perform this Agreement.

    (f) the  execution and delivery by it of the  Transaction  Documents and the
performance by it of its  obligations  thereunder,  have been duly authorized by
all  requisite  corporate  action and will not violate any provision of law, any
order of any court or other agency of government.

    (g) it has duly executed and delivered  each of the  Transaction  Documents,
and each such  document  constitutes  its legal,  valid and binding  obligation,
enforceable  in  accordance  with  its  terms  (subject  in  each  case  to  the
enforcement of remedies, to applicable bankruptcy,  reorganization,  insolvency,
moratorium and similar laws affecting the rights of creditors generally).

                                   ARTICLE IV
                 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS

                                       20
<PAGE>

    SECTION 4.01  CONDITIONS.  The  obligation of each Purchaser to purchase and
pay for the Units being  purchased by it on any  particular  Closing Date is, at
its option,  subject to the satisfaction,  on or before such Closing Date of the
following conditions:

    (a) OPINION OF THE COMPANY'S  COUNSEL.  Each  Purchaser  shall have received
from Skadden,  Arps,  Slate,  Meagher & Flom, LLP,  counsel for the Company,  an
opinion dated such Closing Date, in substantially the form attached as Exhibit H
hereto.

    (b)   REPRESENTATIONS   AND   WARRANTIES   TO  BE  TRUE  AND  CORRECT.   The
representations  and warranties  contained in Article II shall be true, complete
and correct on and as of such  Closing  Date with the same effect as though such
representations and warranties had been made on and as of such Closing Date, and
the Chief  Executive  Officer and Chief  Financial  Officer of the Company shall
have certified to such effect in writing to the Purchasers  purchasing  Units on
such Closing Date.

    (c)  PERFORMANCE.  The Company  shall have  performed  and complied with all
agreements  contained  herein  required to be performed  or complied  with by it
prior to or at such  Closing  Date and the  Chief  Executive  Officer  and Chief
Financial  Officer of the Company shall have certified in writing to such effect
and to the further  effect that all of the  conditions set forth in this Article
IV have been satisfied to the Purchasers purchasing Units on such Closing Date.

    (d) ALL PROCEEDINGS TO BE SATISFACTORY.  All corporate and other proceedings
to be taken by the  Company in  connection  with the  transactions  contemplated
hereby and all documents  incident  thereto shall be reasonably  satisfactory in
form and substance to the Purchasers and the Purchasers  shall have received all
such  counterpart  originals or  certified or other copies of such  documents as
they reasonably may request.

    (e) SUPPORTING  DOCUMENTS.  The Purchasers shall have received copies of the
following documents:

              (i) (A) the  Articles of  Organization,  certified  as of a recent
         date  by the  Secretary  of the  Commonwealth  of the  Commonwealth  of
         Massachusetts  and (B) a certificate  of said  Secretary  dated as of a
         recent  date as to the  due  incorporation  and  good  standing  of the
         Company  and  listing  all  documents  of the Company on file with said
         Secretary;

              (ii) a certificate  of the Clerk of the Company dated such Closing
         Date and certifying:  (A) that attached  thereto is a true and complete
         copy of the  By-Laws  of the  Company  as in effect on the date of such
         certification; (B) that attached thereto is a true and complete copy of
         all  resolutions   adopted  by  the  Board  of  Directors   and/or  the
         stockholders  of the Company  authorizing  the execution,  delivery and
         performance of each of the Transaction  Documents,  the issuance,  sale
         and  delivery of each of the Units and the  reservation,  issuance  and
         delivery of the Conversion Shares, and that all such resolutions are in
         full force and effect and are all the resolutions adopted in connection

                                       21
<PAGE>
         with the transactions  contemplated by the Transaction  Documents;  (C)
         that the Articles of Organization  have not been amended since the date
         of the last amendment referred to in the certificate delivered pursuant
         to  clause  (i)(B)  above;  and  (D) to  the  incumbency  and  specimen
         signature  of  each  officer  of  the  Company  executing  any  of  the
         Transaction Documents, the certificates  representing the Units and any
         certificate   or   instrument   furnished   pursuant   hereto,   and  a
         certification  by another  officer of the Company as to the  incumbency
         and  signature of the officer  signing the  certificate  referred to in
         this clause (ii);

              (iii) such additional  supporting  documents and other information
         with  respect  to the  operations  and  affairs  of the  Company as the
         Purchasers reasonably may request.

    (f) AMENDED AND  RESTATED  REGISTRATION  RIGHTS  AGREEMENT.  The Amended and
Restated Registration Rights Agreement, in the form attached as Exhibit D, shall
have been executed and delivered by the parties thereto.

    (g)  WARRANTS.  The Company  shall have executed and delivered the Warrants,
substantially in the form of Exhibit B, to each of the Purchasers, in respect of
the Warrant component of the Units each such Purchaser is purchasing.

    (h)  CERTIFICATE  OF VOTE OF  DIRECTORS  ESTABLISHING  THE CLASS OF SERIES E
CONVERTIBLE  PREFERRED  STOCK. The Series E Certificate of Vote, a copy of which
is attached hereto as Exhibit G, shall have been filed with the Secretary of the
Commonwealth of the Commonwealth of Massachusetts.

    (i) AMENDED AND RESTATED CO-SALE AGREEMENT. The Amended and Restated Co-Sale
Agreement,  in the form  attached  as Exhibit C,  shall have been  executed  and
delivered by the parties thereto.

    (j) ARTICLES OF  ORGANIZATION.  The Articles of  Organization  shall read in
their entirety as set forth in Exhibit E.

    (k) BY-LAWS. The By-Laws shall read as set forth in Exhibit F.

    (l) CONSENTS AND  PREEMPTIVE  RIGHTS.  All third parties  (including  equity
holders) of the Company having any right to consent to the issuance of the Units
or the  Conversion  Shares shall have  delivered  such consents in writing.  All
third parties  (including  equity holders) of the Company having any preemptive,
first  refusal or other  rights with respect to the issuance of the Units or the
Conversion  Shares  shall  have  irrevocably  waived  or  exercised  the same in
writing.

    (m)  NO  MATERIAL  ADVERSE  CHANGE.  No  Material  Adverse  Change,  in  the
reasonable  judgment of the  Purchaser,  shall have  occurred  in the  Company's
business, financial condition,  prospects or results of operations since October
31, 2000.

                                       22
<PAGE>

    (n) CS CERTIFICATE AND LETTER.  Coleman Swenson Hoffman Booth IV L.P. ("CS")
shall have received from the Company the  certificate and letter attached hereto
as Exhibit I. All such documents  shall be reasonably  satisfactory  in form and
substance to the Purchasers.

    (o) NO DEFAULT  UNDER  EXISTING  INDEBTEDNESS.  Neither  the Company nor any
Subsidiary  shall be in default,  other than  defaults  which have been  waived,
under any agreement relating to any Indebtedness,  including without limitation,
the Third Amendment to Amended and Restated Credit Agreement,  dated as of March
2, 2001, by and among PrimeSource Surgical, Inc, a Delaware corporation, Bimeco,
Inc., a Florida corporation,  Ruby Merger Sub, Inc., a Delaware corporation, the
Company and Citizens Bank of Massachusetts and the Amended and Restated Loan and
Security Agreement, dated March 2, 2001, by and among the Company, Fiber Imaging
Technologies,  Inc., Cathtec Incorporated,  CardioDyne, Inc. and ARK CLO 2000-1,
Limited.

    (p) PAYMENT OF  PURCHASER'S  FEES OF COUNSEL.  In connection  with the First
Closing,  the Company shall pay to GE Capital Equity Investments,  Inc., by wire
transfer in  immediately  available  funds to such account as GE Capital  Equity
Investments,  Inc.  shall specify for such purpose,  the sum of thirty  thousand
dollars  ($30,000)  in  payment  of the fees and  expenses  of  outside  counsel
retained  by  GE  Capital  Equity  Investments,  Inc.  in  connection  with  the
transactions contemplated hereby.

                                    ARTICLE V
                            COVENANTS OF THE COMPANY

The Company covenants and agrees with the Purchasers that:

    SECTION 5.01 FINANCIAL  STATEMENTS,  REPORTS,  ETC. So long as any Purchaser
owns  any  shares  of  Series  E  Preferred  Stock  purchased  pursuant  to this
Agreement, it shall be entitled to the following information:

    (a) within one hundred  twenty  (120) days after the end of each fiscal year
of the Company a consolidated balance sheet of the Company and its Subsidiaries,
if  any,  as of the  end of  such  fiscal  year  and  the  related  consolidated
statements  of income,  stockholders'  equity and cash flows for the fiscal year
then ended,  prepared in accordance with GAAP and certified by a "Big Five" firm
of independent  public  accountants of recognized  national standing selected by
the Board of Directors of the Company;

    (b) within thirty (30) days after the end of each month in each fiscal year,
a consolidated balance sheet of the Company and its Subsidiaries and the related
consolidated  statements  of  income,   stockholders'  equity  and  cash  flows,
unaudited  but  prepared  in  accordance  with GAAP and  certified  by the Chief
Financial  Officer of the Company,  or, if there is no Chief Financial  Officer,
the Chief Executive Officer, such consolidated balance sheet to be as of the end

                                       23
<PAGE>

of such month and such consolidated  statements of income,  stockholders' equity
and cash flows to be for such month and for the period from the beginning of the
fiscal year to the end of such month, in each case with  comparative  statements
for the prior fiscal year;

    (c) at the time of delivery of each annual financial  statement  pursuant to
Section 5.01(a),  a certificate  executed by the Chief Financial  Officer of the
Company or, if there is no Chief Financial Officer, the Chief Executive Officer,
stating  that such  officer has  reviewed  this  Agreement  and the terms of the
Series E  Preferred  Stock  contained  in the  Articles  of  Organization  to be
reviewed and has no  knowledge of any default by the Company in the  performance
or  observance of any of the  provisions  of this  Agreement or the terms of the
Series E Preferred Stock  contained in the Articles of Organization  or, if such
officer has such knowledge, specifying such default and the nature thereof;

    (d) at the end of each  quarter,  a quarterly  management  narrative  report
explaining all significant  variances from forecasts and all significant current
developments in staffing, marketing, sales and operations;

    (e) no later than thirty  (30) days prior to the start of each fiscal  year,
excluding the fiscal year commencing on July 1, 2001,  consolidated  capital and
operating expense budgets, cash flow projections and income and loss projections
for the  Company  and its  Subsidiaries  in respect  of such  fiscal  year,  all
itemized in reasonable  detail and prepared on a monthly  basis,  and,  promptly
after preparation, any revisions to any of the foregoing;

    (f) promptly  following receipt by the Company,  each audit response letter,
accountant's management letter and other written report submitted to the Company
by its  independent  public  accountants in connection with an annual or interim
audit of the books of the Company or any of its Subsidiaries;

    (g) promptly after the commencement thereof,  notice of all actions,  suits,
claims,  proceedings,  investigations  and  inquiries  of the type  described in
Section  2.06  involving  the  Company  or any of its  Subsidiaries  that  could
materially adversely affect the Company;

    (h) promptly upon sending,  making  available or filing the same,  all press
releases,  reports and  financial  statements  that the  Company  sends or makes
available to its stockholders or files with the Commission; and

    (i) promptly,  from time to time, such other material information  regarding
the business, prospects, financial condition, operations, property or affairs of
the Company and its Subsidiaries as the Purchaser reasonably may request.

Notwithstanding anything else contained in this SECTION 5.01, if at any time,
the Company is subject to the reporting requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), the
Company's obligations pursuant to (b), (d), (e), (f), (g) and (i) above shall be
suspended for so long as the Company remains subject to such reporting
requirements of the Exchange Act.

                                       24
<PAGE>

    SECTION 5.02 RESERVE FOR  CONVERSION  SHARES AND FOR  CONVERSION OF SERIES E
SHARES.  The Company  shall,  at all times,  reserve and keep available at least
2,600,000  (or such  other  lower  number as is at any time  determined  to be a
definite  maximum number of shares of Common Stock for which the Warrants may be
exercised)  unissued  shares of Common  Stock,  for the purpose of effecting the
issuance of the  Conversion  Shares upon  exercise of the Warrants and otherwise
complying  with the terms of this  Agreement.  Additionally,  for each  share of
Series E  Preferred  Stock sold  hereunder,  the  Company  shall,  at all times,
reserve and keep  available at least ten (10)  unissued  shares of Common Stock,
for the  purpose of  effecting  a  conversion  of such Series E Shares to Common
Stock in accordance  with the Series E  Certificate  of Vote. If at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the issuance of the  Conversion  Shares upon exercise of the Warrants,
to effect a conversion  of the Series E Shares  and/or  otherwise to comply with
the terms of this  Agreement,  the Company will  forthwith  take such  corporate
action as may be  necessary to increase its  authorized  but unissued  shares of
Common Stock to such number of shares as shall be sufficient  for such purposes.
The Company will obtain any authorization,  consent, approval or other action by
or make any filing  with any court or  administrative  body that may be required
under  applicable  state  securities laws in connection with the issuance of the
Conversion  Shares upon  exercise of the  Warrants and the issuance of shares of
Common Stock upon a conversion of Series E Shares in accordance  with the Series
E Certificate of Vote.

    SECTION 5.03 CORPORATE EXISTENCE.  The Company shall maintain and, except as
otherwise  permitted by SECTION 5.14 cause each of its Subsidiaries to maintain,
their respective  corporate  existence,  rights and franchises in full force and
effect.

    SECTION 5.04 PROPERTIES, BUSINESS, INSURANCE. The Company shall maintain and
cause each of its Subsidiaries to maintain as to their respective properties and
business, with financially sound and reputable insurers,  insurance against such
casualties  and  contingencies  and of  such  types  and in such  amounts  as is
customary for companies similarly  situated,  which insurance shall be deemed by
the  Company  to be  sufficient.  The  Company  shall not  cause or  permit  any
assignment  or change in  beneficiary  and shall  not  borrow  against  any such
policy.  If  requested  by  Purchasers  holding  at  least  a  majority  of  the
outstanding  Series E Preferred Stock, the Company will add one designee of such
holders as a notice party for each such policy and shall request that the issuer
of each policy  provide such  designee  with ten (10) days'  notice  before such
policy is  terminated  (for failure to pay premiums or otherwise) or assigned or
before any change is made in the beneficiary thereof.

    SECTION 5.05 INSPECTION,  CONSULTATION AND ADVICE.  The Company shall permit
and cause each of its  Subsidiaries  to permit each  Purchaser (or together with
its Affiliates) holding at least ten percent (10%) of the Units issued hereunder
on the Closing Date and such  Persons as it may  designate,  at the  Purchaser's
expense,  to visit and  inspect  any of the  properties  of the  Company and its
Subsidiaries,  examine  their  books and take  copies  and  extracts  therefrom,
discuss the affairs,  finances and accounts of the Company and its  Subsidiaries
with their officers,  employees and public  accountants  (and the Company hereby

                                       25
<PAGE>
authorizes  said  accountants  to discuss with such Purchaser and such designees
such affairs, finances and accounts), and consult with and advise the management
of the Company and its Subsidiaries as to their affairs,  finances and accounts,
all at reasonable  times and upon reasonable  notice.  Notwithstanding  anything
else  contained in this Section 5.05, if at any time,  the Company is subject to
the  reporting  requirements  of Section 13 or 15(d) of the  Exchange  Act,  the
Company's  obligations  pursuant  hereto shall be  suspended  for so long as the
Company remains subject to such reporting requirements of the Exchange Act.

    SECTION 5.06 RESTRICTIVE AGREEMENTS PROHIBITED.  Neither the Company nor any
of its  Subsidiaries  shall become a party to any  agreement  which by its terms
restricts  the  Company's  performance  of this  Agreement  or the  Articles  of
Organization.

    SECTION  5.07   TRANSACTIONS   WITH  AFFILIATES.   Except  for  transactions
contemplated by this Agreement and for  transactions on customary and reasonable
terms related to such Person's  employment by the Company or any  Subsidiary and
for  arms-length  transactions  on  commercially  reasonable  terms  approved in
advance by the Board of Directors of the Company, neither the Company nor any of
its Subsidiaries  shall enter into any transaction with (i) any Affiliate of the
Company or any  Subsidiary,  (ii) any employee of the Company or any Subsidiary,
(iii) any holder of more than five percent (5%) of the outstanding capital stock
of  any  class  or  series  of  capital  stock  of  the  Company  or  any of its
Subsidiaries,  (iv) any  member of the family of any Person set forth in clauses
(i), (ii) and (iii) above, or (v) any corporation,  partnership,  trust or other
entity in which any Person set forth in clauses (i), (ii),  (iii) or (iv) above,
or member of the family of any such  Person,  is a director,  officer,  trustee,
partner  or holder of more than five  percent  (5%) of the  outstanding  capital
stock thereof.

    SECTION 5.08 USE OF PROCEEDS.  The Company  shall use the proceeds  from the
sale of the  Units  first in order to pay any  accrued  liabilities  which  have
become due in accordance with their terms and then to fund working capital.

    SECTION  5.09  ACTIVITIES  OF  SUBSIDIARIES.  Without  the  consent  of  the
Company's  Board  of  Directors,  the  Company  shall  not  permit  any  of  its
Subsidiaries  to  consolidate  or merge into or with or sell or transfer  all or
substantially  all its  assets,  except  that  any of its  Subsidiaries  may (i)
consolidate  or  merge  into or with or sell or  transfer  assets  to any  other
Subsidiary  or (ii) merge into or sell or transfer  assets to the  Company.  The
Company shall not sell or otherwise  transfer any shares of capital stock of any
of its  Subsidiaries,  except  to  the  Company  or  another  of  the  Company's
Subsidiaries,  or permit any of its  Subsidiaries  to issue,  sell or  otherwise
transfer  any shares of its  capital  stock or the  capital  stock of any of its
Subsidiaries,  except to the Company or another of its Subsidiaries. The Company
shall not permit any of its  Subsidiaries  to purchase or set aside any sums for
the purchase of, or pay any dividend or make any  distribution on, any shares of
its stock, except for dividends or other distributions payable to the Company or
another of its Subsidiaries.

    SECTION 5.10  COMPLIANCE  WITH LAWS.  The  operations of the Company and its
Subsidiaries  will be conducted in compliance with all Applicable Laws.  Without

                                       26
<PAGE>

limiting the generality of the foregoing,  the Company and all Affiliates  shall
comply  in  all  material   respects   with  all  lawful   directives,   orders,
instructions, bulletins and other announcements received from third party payers
and their agents (including,  without  limitation,  Medicare carriers and fiscal
intermediaries)   regarding  participation  in  third  party  payment  programs,
including,  without  limitation,   preparation  and  submission  of  claims  for
reimbursement.

    SECTION  5.11  KEEPING OF RECORDS  AND BOOKS OF ACCOUNT.  The Company  shall
keep, and cause each Subsidiary to keep,  adequate records and books of account,
in which  complete  entries will be made in  accordance  with GAAP  consistently
applied,   reflecting  all  financial  transactions  of  the  Company  and  such
Subsidiary,  and in  which,  for each  fiscal  year,  all  proper  reserves  for
depreciation, depletion, obsolescence,  amortization, taxes, bad debts and other
purposes in connection with its business shall be made.

    SECTION  5.12 CERTAIN  TRANSACTIONS.  At any time when  twenty-five  percent
(25%)  or  more  of the  Series  E  Shares  issued  at  the  First  Closing  are
outstanding,  except  where the vote or  written  consent  of the  holders  of a
greater  number of shares of Series E  Preferred  Stock is required by law or by
the  Articles  of  Organization  or the  Series E  Certificate  of Vote,  and in
addition to any other vote required by law or by the Articles of Organization or
the Series E Certificate of Vote, without limitation of the rights, restrictions
and protections contained in the Articles of Organization or otherwise available
to holders of Series E Shares,  the Company shall not (and shall  undertake that
each  Subsidiary  shall  not)  take any of the  following  actions  without  the
affirmative written consent of the holders of a majority of the then outstanding
Series E Shares  purchased  hereunder  given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a series:

              (a)  alter,  change or amend (by merger or  otherwise)  any of the
         rights, preferences or privileges of the Series E Preferred Stock;

              (b)  amend,  restate,  alter,  modify  or  repeal  (by  merger  or
         otherwise)  the  Articles of  Organization  or By-Laws of the  Company,
         including,  without  limitation,   amending,  restating,  modifying  or
         repealing  (by  merger or  otherwise)  (i) any  certificate  of vote of
         resolution  of the Board of  Directors of the  Company,  including  the
         resolution  of the Series E  Preferred  Stock  establishing  a class or
         series of stock  relating to any series of Preferred  Stock or (ii) any
         of the rights, preferences and privileges of any other class of Capital
         Stock or the terms or provisions of any option or Convertible Security;

              (c) (i)  create,  authorize  or issue  Senior  Securities,  Parity
         Securities,  Supervoting  Securities  or  shares  of any such  class or
         series  (including,  but not limited to, any  authorized  but  unissued
         shares of Series E Preferred  Stock);  (ii) create,  authorize or issue
         any securities (including Convertible  Securities) convertible into, or
         exercisable,   redeemable  or   exchangeable   for,  shares  of  Senior
         Securities,   Parity  Securities,  or  Supervoting  Securities;   (iii)
         increase  or  decrease  the  authorized  number  of  shares of Series E
         Preferred Stock; or (iv) increase or decrease the authorized  number of
         shares of any class or series of Senior Securities,  Parity Securities,
         Supervoting Securities or shares of any such class or series;

                                       27
<PAGE>

              (d)  create,  authorize  or issue  any  Junior  Securities  or any
         securities  (including  Convertible  Securities)  convertible  into, or
         exercisable, redeemable or exchangeable for, Junior Securities, in each
         case either (i) at a price below the original issue price of the Series
         E Preferred Stock (as adjusted for any stock splits,  stock  dividends,
         recapitalizations or the like) or (ii) at a price which implies a value
         per share of Common  Stock below the  conversion  price of the Series E
         Preferred  Stock  in  effect  immediately  prior  to the  time  of such
         creation, authorization or issuance;

              (e) (i) initiate or suffer to exist any  Liquidation  Event,  (ii)
         merge or  consolidate  with any other  Person  such that the holders of
         shares  of the  Company's  Capital  Stock  immediately  prior  to  such
         transaction  become the beneficial  owners,  in the aggregate,  of less
         than fifty  percent  (50%) of the voting  securities  of the  surviving
         Person immediately after the transaction (determined on a fully-diluted
         basis  assuming the  conversion of all  Convertible  Securities of such
         Person) or (iii)  otherwise  discontinue or dispose of more than 10% of
         the assets of its business;

              (f)  initiate  or  suffer  to exist  any  recapitalization  of the
         Company, or reclassify any authorized Capital Stock of the Company into
         any other class or series of Capital Stock of the Company;

              (g)  declare  or  pay  any  dividend  or  make  any   distribution
         (including, without limitation, by way of redemption, purchase or other
         acquisition)  with respect to shares of Capital Stock of the Company or
         any  securities   convertible   into  or  exercisable,   redeemable  or
         exchangeable for any share of Capital Stock of the Company  (including,
         without  limitation,   any  such  Convertible   Security)  directly  or
         indirectly,  whether  in cash,  obligations  or shares of the  Company;
         except  for the  declaration  of a  dividend  for the sole  purpose  of
         effectuating a stock split with respect to the Company's Common Stock;

              (h) redeem any shares of the Company's Capital Stock;

              (i)  acquire,  in one or a  series  of  transactions,  any  equity
         ownership  interest,  by way of merger or otherwise,  in any Person, or
         any asset or assets of any Person,  where the  aggregate  consideration
         payable  in  connection  with  such  acquisition  (including,   without
         limitation, cash consideration, the fair market value of any securities
         and the net present  value of any deferred  consideration)  is at least
         $2,000,000;

              (j) make any  material  change in the  nature of its  business  as
         conducted on the Closing Date;

              (k) sell,  transfer,  convey,  lease or dispose  of,  outside  the
         ordinary  course of business,  any material assets or properties of the
         Company,  whether now or  hereafter  acquired,  in any  transaction  or
         transactions that call for payments in excess of $500,000;

                                       28
<PAGE>

              (l)  establish  or  purchase  any  Subsidiary  or  invest  in  any
         Affiliate,  other than a  Subsidiary  that is (i)  wholly-owned  by the
         Company or (ii) wholly-owned by another Subsidiary that is wholly-owned
         by the Company;

              (m) enter into any  agreements,  transactions or leases not in the
         ordinary  course of the Company's  business as conducted on the Closing
         Date, that call for payments in excess of $500,000;

              (n) grant or suffer to exist any material  lien,  other than liens
         which  arise  in the  ordinary  course  of the  Company's  business  as
         conducted on the Closing Date;

              (o) (i) incur any  Indebtedness  in  excess  of  $500,000,  except
         Indebtedness of up to $17,000,000  pursuant to the Existing  Financing,
         or (ii)  enter  into,  amend,  extend or  restate  any loan  agreement,
         guaranty,  capital lease or other borrowing arrangement with respect to
         Indebtedness in excess of $500,000;

              (p) become a party to leases (whether  capital leases or operating
         leases)  during any fiscal year with respect to which the present value
         of all  payments  due during the term of such  leases in the  aggregate
         (determined  using  a  discount  rate  of  ten  percent  (10%))  exceed
         $500,000;

              (q)  make  capital   expenditures   exceeding  $1,000,000  in  the
         aggregate during any fiscal year;

              (r) make loans,  advances or investments exceeding $250,000 in the
         aggregate during any fiscal year; or

              (s) enter into any agreement (or otherwise  take any action) which
         has the effect of or  results in  increasing  management  or  executive
         compensation  by more  than  10%  during  any  fiscal  year,  excluding
         agreements entered into prior to the date hereof.

    SECTION 5.13 PUBLICATION MATTERS. The Company shall not use the name or logo
of General Electric Capital Corporation or Coleman Swenson Hoffman Booth IV L.P.
or any of either  of their  Affiliates  (including  without  limitation  General
Electric  Company)  in  connection  with any press  releases  or  advertisements
without the prior written  consent of General  Electric  Capital  Corporation or
Coleman Swenson Hoffman Booth IV L.P. and the prior written  approval by General
Electric  Capital  Corporation or Coleman  Swenson  Hoffman Booth IV L.P. of the
form and  content  of any such  press  release  or  advertisement.  The  Company
consents to the  publication by GE Capital Equity  Investments,  Inc. or Coleman
Swenson  Hoffman  Booth IV L.P. of a tombstone or similar  advertising  material
relating to the financing transaction contemplated herein, which may include the
Company's name, business  description and size of investment.  In addition,  the
Company  agrees that GE Capital  Equity  Investments,  Inc.  or Coleman  Swenson
Hoffman  Booth IV L.P.  may use the  Company's  name  and logo on such  Person's
intranet and extranet websites among its list of representative  investments and

                                       29
<PAGE>

may provide the Company's name and appropriate individual contacts to certain of
its portfolio  companies for the purpose of securing supplier discounts or other
similar benefits for the Company.

    SECTION 5.14 Certain Insurance and Liability Matters.
                 ---------------------------------------

    (a) So long as the Series E  Preferred  Stock is  outstanding,  the  Company
shall ensure that each person serving on the Board of Directors on and after the
Closing Date shall  receive at least  $2,000,000  in  directors'  and  officers'
liability  insurance  coverage  on  customary  terms and  conditions  (including
coverage for liabilities  arising before the date of taking office to the extent
arising  from  such  person's  status  as a  prospective  member of the Board of
Directors).  The Company shall at all times  maintain  provisions in its By-Laws
and Articles of Organization  indemnifying all directors  against  liability and
absolving all directors from liability to the maximum extent permitted under the
laws of the Commonwealth of Massachusetts.

    (b) The Company shall at all times maintain general  liability  insurance in
an amount not less than $10,000,000.

    SECTION 5.15 Indemnification.
                 ---------------

    (a) The Company shall indemnify each Purchaser and its respective directors,
officers,   employees  and   Affiliates   from  and  against  any   liabilities,
obligations,  losses, damages,  penalties,  actions,  judgments,  suits, claims,
costs,  attorneys' fees, expenses and disbursements of any kind ("LOSSES") which
may be imposed upon, incurred by or asserted against such Purchaser or any other
indemnified  party,  relating  to or arising  out of any untrue  representation,
breach of warranty  or failure to perform  any  covenants  or  agreement  by the
Company  contained herein or in any certificate or document  delivered  pursuant
hereto.

    (b) The Company shall indemnify each Purchaser and its respective directors,
officers, employees and Affiliates from and against any Losses resulting from or
related  to any  claims  by third  parties  relating  to or  arising  out of the
transactions contemplated hereby.

    (c) If any  Purchaser  shall  believe  that such  Purchaser  is  entitled to
indemnification pursuant to Section 5.14(a) or 5.14(b) in respect of any Losses,
such Purchaser  shall give the Company prompt written notice  thereof.  Any such
notice  shall set forth in  reasonable  detail and to the extent  then known the
basis for such claim for indemnification.  The failure of such Purchaser to give
notice of any claim for indemnification promptly shall not adversely affect such
Purchaser's right to indemnity  hereunder except to the extent that such failure
materially  adversely  affects the right of the Company to assert any reasonable
defense to such claim.  Each such claim for indemnity shall expressly state that
the  Company  shall  have only the ten (10) day period  referred  to in the next
sentence  to dispute or deny such claim.  The  Company  shall have ten (10) days
following  its receipt of such notice  either (y) to acquiesce in such claim and
its respective responsibilities to indemnify the Purchaser in respect thereof in
accordance with the terms of this Section 5.14 by giving such Purchaser  written
notice  of such  acquiescence  or (z) to  object  to the  claim by  giving  such

                                       30
<PAGE>

Purchaser  written  notice of the  objection.  If the  Company  does not  object
thereto  within  such ten (10) day period,  the Company  shall be deemed to have
acquiesced  in such claim and its  responsibility  to indemnify the Purchaser in
respect thereof in accordance with the terms of this Section 5.14.

    (d) The Company shall  reimburse the Purchasers for any attorneys'  fees and
expenses  constituting  Losses  pursuant to this Section 5.14 promptly and in no
event  later than  fifteen  (15) days  following  receipt  of a written  invoice
therefore.

    SECTION 5.16 KEY MAN INSURANCE. The Company shall maintain key man insurance
on customary  terms and conditions in an amount not less than $1,000,000 on each
of James L. Hersma,  John F. Rooney and Michael K. Bayley, and the Company shall
be named as sole  beneficiary  with respect to such insurance  policies,  for so
long as any of the Series E Shares remain outstanding.

    SECTION 5.17  TERMINATION  OF  COVENANTS.  The  covenants  set forth in this
Agreement  shall  terminate  and be of no further force and effect as to each of
the Purchasers upon exchange or redemption of all of the then outstanding shares
of Series E Preferred Stock pursuant to their respective terms.

                                   ARTICLE VI
                                  MISCELLANEOUS

    SECTION 6.01 EXPENSES.  The Company shall pay all reasonable  outside legal,
accounting  fees  and due  diligence  fees and  expenses  of GE  Capital  Equity
Investments,  Inc. in  connection  with the  transactions  contemplated  hereby;
PROVIDED,  that, in connection with the First Closing, the Company's obligations
under  this  Section  6.01  shall be  limited  to  payment  of the sum of thirty
thousand dollars ($30,000) in accordance with Section 4.01(p) hereof.

    SECTION   6.02   SURVIVAL  OF   AGREEMENTS.   All   covenants,   agreements,
representations  and  warranties  made in this  Agreement or any  certificate or
instrument  delivered to the Purchaser  pursuant to or in  connection  with this
Agreement  shall  survive the  execution  and  delivery of this  Agreement,  the
issuance,  sale and delivery of the Units,  and the issuance and delivery of the
Conversion  Shares,  and all  statements  contained in any  certificate or other
instrument  delivered by the Company  hereunder or  thereunder  or in connection
herewith  or  therewith  shall  be  deemed  to  constitute  representations  and
warranties made by the Company.

    SECTION 6.03  BROKERAGE.  Each party hereto will indemnify and hold harmless
the  others  against  and in  respect  of  any  claim  for  brokerage  or  other
commissions  relative  to this  Agreement  or to the  transactions  contemplated
hereby,  based in any way on agreements,  arrangements or understandings made or
claimed to have been made by such party with any third party.

    SECTION  6.04  PARTIES  IN  INTEREST.  All  representations,  covenants  and
agreements  contained  in this  Agreement  by or on behalf of any of the parties

                                       31
<PAGE>

hereto  shall bind and inure to the  benefit of the  respective  successors  and
assigns of the parties hereto whether so expressed or not.  Without limiting the
generality of the  foregoing,  all  representations,  covenants  and  agreements
benefiting the  Purchasers  shall inure to the benefit of any and all subsequent
holders from time to time of Units.

    SECTION   6.05   NOTICES.   All  notices,   requests,   consents  and  other
communications  hereunder  shall be in writing and shall be delivered in Person,
mailed by certified or registered  mail,  return receipt  requested,  or sent by
telecopier or telex, addressed as follows:

    (a) if to the Company,  at 3700 East Columbia Street,  Butterfield  Business
Park, Tucson, Arizona 85714, Attention:  Chief Executive Officer, with a copy to
Skadden Arps,  Slate,  Meagher & Flom LLP, 300 South Grand Avenue,  Los Angeles,
California 90071, Attention: Gregg Noel, and

    (b) if to any Purchaser,  at the address of such Purchaser under its, his or
her signature to this Agreement.

or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others.

    SECTION 6.06  GOVERNING  LAW; JURY TRIAL  WAIVER.  This  Agreement  shall be
construed,  interpreted  and the rights of the parties  determined in accordance
with the internal  laws of the State of New York without  regard to the conflict
of law principles thereof;  except with respect to matters of law concerning the
internal  corporate  affairs of any corporate  entity which is a party to or the
subject of this Agreement and as to those matters,  the law of the  jurisdiction
under which the respective  entity derives its powers shall govern.  The parties
irrevocably elect as the sole judicial forum for the adjudication of any matters
arising  under  or in  connection  with  this  Agreement  and  the  transactions
contemplated  hereby,  and  consent  to the  jurisdiction  of, the courts of the
United States of America for the Southern  District of New York and of the State
of New York in  Manhattan  in  connection  with the  adjudication  of any matter
arising  under  or in  connection  with  this  Agreement  and  the  transactions
contemplated  hereby,  and waive any and all objections to such  jurisdiction or
venue that they may have.  The parties  hereby  waive any right to have trial by
jury in any action,  suit or proceeding  brought to enforce or defend any rights
or remedies arising under or in connection with this Agreement, whether grounded
in tort, contract or otherwise.

    SECTION 6.07  INJUNCTIVE  RELIEF.  The parties hereto  acknowledge and agree
that  irreparable  damage would occur in the event any of the provisions of this
Agreement  were not performed in accordance  with their  specific  terms or were
otherwise breached.  It is accordingly agreed that the parties shall be entitled
to an injunction or  injunctions  to prevent  breaches of the provisions of this
Agreement and shall be entitled to enforce  specifically  the provisions of this
Agreement  in any  court  of the  United  States  or any  state  thereof  having
jurisdiction,  in  addition  to any other  remedy to which  the  parties  may be
entitled under this Agreement or at law or in equity.

                                       32
<PAGE>

    SECTION 6.08  ASSIGNMENT.  Neither this  Agreement  nor any of the rights or
obligations  hereunder may be assigned by the Company  without the prior written
consent of the Purchasers,  or by a Purchaser  without the prior written consent
of the Company,  except that each Purchaser may (a) without such consent,  sell,
transfer,  or otherwise  convey any of the Series E Shares,  the Warrants or the
Common Stock issued upon exercise thereof and the rights and obligations of such
Purchaser  hereunder  to any  Affiliate of such  Purchaser.  With respect to any
transfer under clause (a) of the immediately preceding sentence,  the applicable
transferee shall execute a counterpart to this Agreement prior to such transfer.
Subject to the foregoing,  this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective  successors and assigns,  and
no other person shall have any right, benefit or obligation hereunder.

    SECTION 6.09 LIMITATION OF LIABILITY. In no event shall (a) any Affiliate of
any  Purchaser,  (b) any member or  representative  of any  Purchaser  or of any
Affiliate of such Purchaser or (c) any direct or indirect  member,  stockholder,
officer,  director,  limited  partner,  employee or any other such person of any
Purchaser  or any  Affiliate of such  Purchaser,  be  personally  liable for any
obligation of such Purchaser under this Agreement.

    SECTION 6.10 ENTIRE AGREEMENT.  This Agreement,  including the Schedules and
Exhibits  hereto,  constitutes the sole and entire agreement of the parties with
respect to the subject  matter  hereof.  All Schedules  and Exhibits  hereto are
hereby incorporated herein by reference.

    SECTION 6.11  COUNTERPARTS.  This  Agreement  may be executed in two or more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

    SECTION 6.12 AMENDMENTS.  This Agreement may not be amended or modified, and
no provisions  hereof may be waived,  without the written consent of the Company
and the affirmative  written  consent of the holders of two-thirds  (2/3) of the
then-outstanding  shares of Series E Preferred Stock purchased  hereunder at the
First Closing.

    SECTION  6.13  SEVERABILITY.  If any  provision of this  Agreement  shall be
declared void or unenforceable by any judicial or administrative  authority, the
validity  of any  other  provision  and of the  entire  Agreement  shall  not be
affected thereby.

    SECTION 6.14 TITLES AND  SUBTITLES.  The titles and  subtitles  used in this
Agreement are for convenience only and are not to be considered in construing or
interpreting any term or provision of this Agreement.

    SECTION 6.15 CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms shall have the following  meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

    "ADDITIONAL CLOSING" has the meaning set forth in Section 1.03 hereof.

                                       33
<PAGE>

    "AFFILIATE"  means, with respect to a specified Person, (a) any other person
directly or indirectly  controlling or controlled by or under direct or indirect
common  control  with such  specified  Person,  (b) any other  Person that owns,
directly or  indirectly,  five percent (5%) or more of such  specified  person's
Capital Stock,  (c) any employee or director of such specified  Person,  (d) any
member of the family of any Person  specified in clauses  (a),  (b), and (c), or
(e) any corporation,  limited  liability  company,  partnership,  trust or other
entity in which any Person set forth in clauses (a),  (b), (c) or (d) above,  or
member of the  family  of any such  Person,  is a  director,  officer,  trustee,
partner  or holder of more than five  percent  (5%) of the  outstanding  Capital
Stock thereof.  For the purposes of this  definition,  "control," when used with
respect to any specified  person,  means the power to direct the  management and
policies of such person,  directly or indirectly,  whether through the ownership
of voting securities,  by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

    "AGREEMENT" has the meaning set forth in the preamble hereto.

    "AMENDED  AND  RESTATED  CO-SALE  AGREEMENT"  has the  meaning  set forth in
Section 2.01 hereof.

    "AMENDED AND RESTATED  REGISTRATION  RIGHTS  AGREEMENT"  has the meaning set
forth in SECTION 2.01 hereof.

    "APPLICABLE  LAW" or  "APPLICABLE  LAWS"  means any  statute,  law,  rule or
regulation  or any  judgment,  order,  writ,  injunction,  decree  or  financial
assessment (subject, in the case of financial assessments,  to the exhaustion of
appeals)  of  any  Governmental  Entity  to  which  a  specified  Person  or its
properties or assets,  or its officers,  directors,  employees,  consultants  or
agents (in their capacities as such) is subject, including,  without limitation,
all  such  statutes,  laws,  rules,  regulations,   judgments,   orders,  writs,
injunctions,  decrees and financial assessments relating to, without limitation,
energy regulation,  public utility regulation,  securities regulation,  consumer
protection,  equal opportunity,  health care industry regulation,  public health
and  safety,  motor  vehicle  safety or  standards,  third  party  reimbursement
(including  Medicare and  Medicaid),  environmental  protection,  fire,  zoning,
building  and  occupational  safety  and  health  matters  and  laws  respecting
employment practices, employee documentation, terms and conditions of employment
and wages and hours.

    "APPROVALS" has the meaning set forth in Section 2.11(b) hereof.

    "ARTICLES  OF  ORGANIZATION"  has the meaning  set forth in Section  2.02(a)
hereof.

    "CAPITAL  STOCK" means (i) in the case of a  corporation,  corporate  stock,
(ii) in the case of an  association  or  business  entity,  any and all  shares,
interests,  participations,  rights or other equivalents (however designated) of
corporate  stock,  (iii) in the  case of a  partnership,  partnership  interests
(whether general or limited) and (iv) any other interest or  participation  that
confers on a Person the right to receive a share of the  profits  and losses of,
or distributions of assets of, the issuing Person.

                                       34
<PAGE>

    "CHAMPUS" has the meaning set forth in Section 2.21 hereof.

    "CHANGE  OF  CONTROL"  shall  be  deemed  to  have  occurred  upon  (i)  the
consummation of a tender for or purchase of more than fifty percent (50%) of the
Company's  Common Stock by a third party,  excluding the initial public offering
by the Company of any class of its Common Stock, (ii) a merger, consolidation or
sale of all or  substantially  all of the  assets of the  Company  such that the
stockholders  of the  Company  immediately  prior  to the  consummation  of such
transaction  possess less than fifty percent  (50%) of the voting  securities of
the surviving  entity  immediately  after the  transaction  or (iii) the sale or
transfer by any of John F. Rooney,  James L. Hersma or Michael K. Bayley of more
than  twenty  percent  (20%) of his  respective  shares of capital  stock of the
Company, in any of cases (i), (ii) or (iii) in a single transaction or series of
related transactions.

    "CLOSING" has the meaning set forth in Section 1.02 hereof.

    "CLOSING DATE" has the meaning set forth in Section 1.02 hereof.

    "COMMON STOCK" has the meaning set forth in the recitals hereto.

    "COMPANY" has the meaning set forth in the preamble hereto.

    "CONVERSION SHARES" has the meaning set forth in Section 2.01 hereof.

    "CONVERTIBLE SECURITY" means any stock or security,  directly or indirectly,
convertible into or exchangeable for Capital Stock, including without limitation
any option, warrant or exchangeable debt security.

    "CS" has the meaning set forth in Section 4.01(n) hereof.

    "CURRENT CUSTOMER" has the meaning set forth in Section 2.27(a) hereof.

    "CURRENT VENDOR" has the meaning set forth in Section 2.27(b) hereof.

    "ENVIRONMENTAL  CONDITION"  means the Release or  threatened  Release of any
Hazardous  Material  (whether or not upon a Facility  or any former  Facility or
other property and whether or not such Release constituted at the time thereof a
violation  of any  Environmental  Law) as a result of which the  Company  has or
would  reasonably  be  expected  to become  liable to any Person or by reason of
which any Facility,  any former Facility or any of the assets of the Company may
suffer or be subjected to any Encumbrances.

    "ENVIRONMENTAL  LAW" or  "ENVIRONMENTAL  LAWS"  means  any and all  foreign,
federal, state, local or municipal laws, rules, orders,  regulations,  statutes,
ordinances,  codes,  legally  binding  decrees  or  other  requirements  of  any

                                       35
<PAGE>

Governmental  Entity  (including,  without  limitation,  common law) regulating,
relating to or imposing liability or standards of conduct concerning  protection
of the  environment  or of human  health  relating  to  exposure  of any kind of
Hazardous  Materials,  as have been,  are now or may at any time hereafter be in
effect.

    "ENVIRONMENTAL PERMIT" or "Environmental Permits" means any and all permits,
licenses, registrations,  notifications, exemptions and any other authorizations
required under any Environmental Law.

    "ERISA" has the meaning set forth in Section 2.15 hereof.

    "EXCHANGE ACT" has the meaning set forth in Section 5.01 hereof.

    "EXISTING  FINANCING"  shall mean the Credit  Agreement dated as of June 10,
1999 between the Company,  Citizens Bank of Massachusetts,  as amended,  and all
related security agreements, guaranties and other loan documents, as amended and
as in effect on the Closing Date.

    "FACILITY"  or  "FACILITIES"  means one or more of the offices and buildings
and all other real property and related  facilities  which are owned,  leased or
operated by the Company or any Subsidiary.

    "FEDERAL  HEALTH CARE  PROGRAM"  has the  meaning set forth in SECTION  2.21
hereof.

    "FINANCIAL STATEMENTS" has the meaning set forth in SECTION 2.07(a) hereof.

    "FIRST CLOSING" has the meaning set forth in SECTION 1.02 hereof.

    "GAAP"  means  generally  accepted  accounting  principles  set forth in the
opinions and  pronouncements of the Accounting  Principles Board of the American
Institute of Certified Public  Accountants and statements and  pronouncements of
the Financial  Accounting Standards Board, which are in effect as of the date of
this Agreement.

    "GOVERNMENTAL  ENTITY"  means  any  court or  tribunal  in any  jurisdiction
(domestic or foreign) or any federal,  state or local  public,  governmental  or
regulatory  body,  agency,  department,   commission,  board,  bureau  or  other
authority or instrumentality (domestic or foreign).

    "HAZARDOUS MATERIAL" or "HAZARDOUS MATERIALS" means any hazardous substance,
gasoline or petroleum (including crude oil or any fraction thereof) or petroleum
products,  polychlorinated biphenyls,  ureaformaldehyde insulation,  asbestos or
asbestos-containing materials, pollutants,  contaminants,  radioactivity and any
other  materials or substances of any kind,  whether  solid,  liquid or gas, and
whether  or  not  any  such   substance  is  defined  as  hazardous   under  any
Environmental  Law, that is regulated  pursuant to any Environmental Law or that
could give rise to liability under any Environmental Law.

                                       36
<PAGE>

    "INDEBTEDNESS"  means, as to any Person without  duplication,  (a) all items
which, in accordance with GAAP,  would be included as a liability on the balance
sheet of such Person and its  Subsidiaries  (including  any  obligation  of such
Person to the issuer of any letter of credit for reimbursement in respect of any
drafts drawn under such letter of credit), (b) capital lease obligations of such
Person and (c) all obligations of other Persons that such Person has guaranteed,
including,  without  limitation,  all  obligations of such Person  consisting of
recourse  liabilities  with  respect to accounts  receivable  sold or  otherwise
disposed of by such Person.

    "INTELLECTUAL PROPERTY" has the meaning set forth in Section 2.10 hereof.

    "JUNIOR  SECURITIES"  means any class or series of capital stock which ranks
junior  to  the  Series  E  Preferred  Stock  as to  dividend  distributions  or
distributions upon the liquidation, winding up and dissolution of the Company.

    "KNOWLEDGE"  "KNOWN" means, with respect to any Person, the actual knowledge
of such  Person,  after  reasonable  inquiry;  provided,  that a Person shall be
deemed to have actual  knowledge  of the  contents of all books and records with
respect to which such  Person has  reasonable  access;  provided,  further,  and
without  limiting the  generality of the  foregoing,  with respect to any Person
that is a  corporation  actual  knowledge  shall be deemed to include the actual
knowledge  of all  principal  employees  of any such Person  (including  without
limitation  each  director,  the  Chief  Executive  Officer,   President,  Chief
Financial Officer and all Vice Presidents of such Person).

    "LIABILITY"  or  "LIABILITIES"  means,  with  respect  to  any  Person,  any
liability or  obligation of such Person of any kind,  character or  description,
whether  known  or  unknown,  absolute  or  contingent,  accrued  or  unaccrued,
liquidated or unliquidated,  secured or unsecured,  joint or several,  due or to
become due, vested or unvested, executory, determined, determinable or otherwise
and  whether  or not  the  same  is  required  to be  accrued  on the  financial
statements of such Person.

    "LIQUIDATION  EVENT" means any of the following events: (i) the commencement
by the  Company  of a  voluntary  case under the  bankruptcy  laws of the United
States,  as now or hereafter in effect,  or the  commencement  of an involuntary
case  against  the  Company  with  respect  to which the  petition  shall not be
controverted  within 15 days, or be dismissed within 60 days, after commencement
thereof;  (ii) the  appointment  of a custodian  for, or the taking  charge by a
custodian of, all or substantially all of the property of the Company; (iii) the
commencement  by  the  Company  of  any  proceeding  under  any  reorganization,
arrangement,  adjustment of debt, relief of debtors, dissolution,  insolvency or
liquidation  or similar  law of any  jurisdiction  whether now or  hereafter  in
effect relating to the Company; (iv) the commencement against the Company of any
proceeding set forth in the preceding  clause (iii),  which is not  controverted
within 10 days  thereof  and  dismissed  within 60 days  after the  commencement
thereof;  (v) the  adjudication  of the Company  insolvent or  bankrupt,  or the
adoption by the Company of a plan of  liquidation,  (vi) the  occurrence  of any
Change  of  Control  with  respect  to the  Company  or (vii)  the  filing  of a
certificate  of  dissolution in respect of the Company with the Secretary of the
Commonwealth of the Commonwealth of  Massachusetts;  in any of cases (i) through
(vi) above, in a single transaction or series of related transactions.

                                       37
<PAGE>

    "LOSSES" has the meaning set forth in Section 5.15(a) hereof.

    "MATERIAL  ADVERSE EFFECT" and "MATERIAL  ADVERSE CHANGE" mean, with respect
to the Company or any of its Subsidiaries, any effect or change, as the case may
be,  that  individually  or in the  aggregate  is  material  and  adverse to the
business, financial condition, results of operations or prospects of the Company
and its Subsidiaries  taken as a whole,  provided that a Material Adverse Effect
and a Material  Adverse  Change shall not be deemed to have occurred as a result
of a change in general economic conditions.

    "MATERIAL AGREEMENT" means all agreements to which the Company or any of its
Subsidiaries  is a party or by which the Company or any of its  Subsidiaries  is
bound that are  material to the  conduct  and  operations  of its  business  and
properties,  including  without  limitation  any  agreements  (i)  which are not
terminable  upon less than  ninety  (90) days  notice,  (ii) which  provide  for
payments to or by the Company or any of its  Subsidiaries  in excess of $600,000
annually,  (iii) which obligate the Company or any of its Subsidiaries to share,
license or develop any product or technology or (iv) which involve  transactions
or proposed transactions between the Company or any of its Subsidiaries,  on the
one hand, and any Affiliate of the Company, on the other hand.

    "PARITY  SECURITIES"  means any class or series of capital stock which ranks
on a parity with the Series E Preferred  Stock as to dividend  distributions  or
distributions upon the liquidation, winding up and dissolution of the Company.

    "PERSON" shall mean an individual,  corporation,  trust, partnership,  joint
venture,  unincorporated  organization,  government  agency  or  any  agency  or
political subdivision thereof, or other entity.

    "PURCHASE PRICE" has the meaning set forth in Section 1.01 hereof.

    "PURCHASER"  or  "PURCHASERS"  has the  meaning  set  forth in the  preamble
hereto.

    "RELEASE"  means and  includes  any  spilling,  leaking,  pumping,  pouring,
emitting,  emptying,  discharging,  injecting,  escaping,  leaching,  dumping or
disposing into the environment or the workplace of any Hazardous Materials,  and
otherwise as defined in any Environmental Law.

    "SENIOR  SECURITIES"  means any class or series of capital stock which ranks
senior  to  the  Series  E  Preferred  Stock  as to  dividend  distributions  or
distributions upon the liquidation, winding up and dissolution of the Company.

    "SERIES E  CERTIFICATE  OF VOTE" has the meaning  set forth in Section  2.04
hereof.

    "SERIES E PREFERRED STOCK" has the meaning set forth in the recitals hereto.

                                       38
<PAGE>

    "SERIES E SHARES" has the meaning set forth in Section 2.02(b) hereof.

    "SSA" has the meaning set forth in Section 2.21 hereof.

    "STATE  HEALTH  CARE  PROGRAM"  has the  meaning  set forth in Section  2.21
hereof.

    "SUBSIDIARY"  or  "SUBSIDIARIES"   shall  mean,  as  to  the  Company,   any
corporation,  limited  liability company or partnership of which more than fifty
percent (50%) of the outstanding  equity securities having ordinary voting power
to elect a majority of the Board of  Directors or other such  governing  body of
such corporation (irrespective of whether or not at the time equity of any other
class or classes of such entity  shall have or might have voting power by reason
of the happening of any contingency) is at the time directly or indirectly owned
by the Company, or by one or more of its Subsidiaries, or by the Company and one
or more of its Subsidiaries.

    "SUPERVOTING  SECURITIES" means any class or series of the Company's Capital
Stock the  holders  of which have the right to cast more than one vote per share
and/or  have the right to elect one or more  members of the Board of  Directors,
voting as a class or series.

    "TAXES" has the meaning set forth in Section 2.17 hereof.

    "TRANSACTION DOCUMENTS" has the meaning set forth in Section 2.01 hereof.

    "UNITS" has the meaning set forth in the recitals hereto.

    "WARRANTS" has the meaning set forth in the recitals hereto.

                                    * * * * *
                         (Signatures on following page)

                                       39
<PAGE>

    IN WITNESS  WHEREOF,  the Company and each of the  Purchasers  have executed
this Unit Purchase Agreement as of the day and year first above written.

COMPANY:                            PRIMESOURCE HEALTHCARE, INC.

                                  By:    /S/ JAMES L. HERSMA
                                        --------------------------------------
                                  Name:
                                  Title: President and Chief Executive Officer

Attest:
/S/ MICHAEL K. BAYLEY
---------------------------
Secretary

PURCHASERS:                       GE CAPITAL EQUITY INVESTMENTS, INC.

                                  By:  /S/ DAVID GIBBS
                                        ----------------------------------

                                  Name: David Gibbs
                                        Title:  Vice President
                                        Address:120 Long Ridge Road
                                                Stamford, Connecticut 06927

                                  COLEMAN SWENSON HOFFMAN BOOTH IV L.P.

                                  By:Its General Partner,
                                     CSHB VENTURES IV L.P.

                                  By:  /S/ LARRY H. COLEMAN
                                        ----------------------------------
                                        Name:Larry H. Coleman
                                        Title: Its General Partner
                                        Address: 237 Second Avenue South
                                                 Franklin, Tennessee  37064-2649

<PAGE>

                                          WEBBMONT HOLDINGS, L.P.

                                          /S/  ROBERT W. FISHER
                                          --------------------------------------
                                          Name:  Robert W. Fisher
                                          Title:  Authorized Signatory

                                          1355 Peachtree Street
                                          Suite 1100
                                          Atlanta, Georgia  30309

<PAGE>

                                          /S/  WILLIAM H. LOMICKA
                                          --------------------------------------
                                          William H. Lomicka
                                          7406 North Secret Canyon Drive
                                          Tucson, AZ 85718

<PAGE>
<TABLE>
<CAPTION>

                                   SCHEDULE I
                                   ----------

                                   Purchasers
                                   ----------

                                                          Amount and Type of Units           Purchase Price for Units
                      Purchaser                                to Be Purchased
------------------------------------------------------- ------------------------------------ -------------------------
<S>                                                     <C>                                    <C>
                                                        Series E Shares - 200,000
GE Capital Equity Investments, Inc.                     Warrants - 1,000,000                               $2,000,000
------------------------------------------------------- ------------------------------------ -------------------------
                                                        Series E Shares - 100,000
Coleman Swenson Hoffman Booth IV L.P.                   Warrants - 500,000                                 $1,000,000
------------------------------------------------------- ------------------------------------ -------------------------
                                                        Series E Shares - 20,000
Webbmont Holdings, L.P.                                 Warrants - 100,000                                   $200,000
------------------------------------------------------- ------------------------------------ -------------------------
                                                        Series E Shares - 5,000
William H. Lomicka                                      Warrants - 25,000                                     $50,000
------------------------------------------------------- ------------------------------------ -------------------------

======================================================= ==================================== =========================
Total Units and Purchase Price                          Series E Shares - 325,000                          $3,250,000
                                                        Warrants - 1,625,000
------------------------------------------------------- ------------------------------------ -------------------------

</TABLE>

<PAGE>

                                   SCHEDULE II

                                Security Holders

<PAGE>

                                    EXHIBIT A

              Form of Share Certificate of Series E Preferred Stock

<PAGE>

                                    EXHIBIT B

                                 Form of Warrant

<PAGE>

                                    EXHIBIT C

                 Form of Amended and Restated Co-Sale Agreement

<PAGE>

                                    EXHIBIT D

           Form of Amended and Restated Registration Rights Agreement

<PAGE>

                                    EXHIBIT E

               Articles of Organization and All Amendments Thereto

<PAGE>

                                    EXHIBIT F

                                     By-Laws

<PAGE>

                                    EXHIBIT G

                          Series E Certificate of Vote

<PAGE>

                                    EXHIBIT H

           Form of Opinion of Skadden Arps, Slate, Meager & Flom LLP

<PAGE>
                                    EXHIBIT I

                        Form of CS Certificate and Letter

June 28, 2001

Coleman Swenson Hoffman Booth IV L.P.
237 Second Avenue South
Franklin, TN  37064-2649

         Re:  Management Rights
              -----------------

Ladies and Gentlemen:

         This letter will confirm our  agreement  that in  connection  with your
purchase of those certain units ("Units") consisting of 100,000 shares of Series
E Convertible  Preferred Stock of PrimeSource  Healthcare,  Inc. (the "Company")
and 500,000 warrants to purchase a number of shares of Company common stock, you
will be entitled to the following contractual  management rights, in addition to
rights to certain non-public financial information,  inspection rights and other
rights  specifically  provided  to you  under  Article  V of the  Unit  Purchase
Agreement of even date herewith:

         (1)  You  hereby  represent  and  warrant  to  the  Company  that  your
organizational  documents  require  that you  qualify at all times as a "venture
capital  operating  company" within the meaning of the "plan asset  regulations"
under the Employee Retirement Income Security Act of 1974, as amended.

         (2) If and  for so  long  as you do not  have a  representative  on the
Company's Board of Directors  ("Unrepresented Party"), you shall be permitted to
select  one  representative   ("Representative")  to  consult  with  and  advise
management of the Company on significant business issues, including management's
proposed annual operating plans, and at your request management will make itself
available to meet with your Representative within thirty (30) days after the end
of each fiscal quarter at the Company's  facilities at mutually  agreeable times
for such consultation and advice and to review progress in achieving said plans.

         (3) If and  for  so  long  as you  are  an  Unrepresented  Party,  your
Representative  may examine the books and records of the Company and inspect its
facilities  and may  request  information  at  reasonable  times  and  intervals
concerning  the  general  status  of  the  Company's   financial  condition  and
operations,  provided that access to highly confidential proprietary information
and facilities need not be provided.

<PAGE>

         (4) If and for so long as you are an  Unrepresented  Party, the Company
shall invite your  Representative to attend in a nonvoting observer capacity all
meetings  of its  Board of  Directors  and,  in this  respect,  shall  give your
Representative copies of all notices, minutes, consents, and other material that
it provides to its Directors;  provided,  however, that the Company reserves the
right to exclude your  Representative  from access to any material or meeting or
portion  thereof  if the  Company  believes  upon  advice of  counsel  that such
exclusion is reasonably necessary to preserve the attorney-client  privilege, to
protect  highly  confidential  proprietary  information  or  for  other  similar
reasons.  Your  Representative may participate in discussions of matters brought
to the Board.

         The rights  described herein shall terminate and be of no further force
or effect upon the earliest to occur of (a) the closing of a public  offering of
shares of the Company's capital stock pursuant to a registration statement filed
by the  Company  under the  Securities  Act of 1933 which has  become  effective
thereunder  (other than a  registration  statement  relating  solely to employee
benefit  plans or a  transaction  covered  by Rule  145),  (b) such  time as the
Company  becomes  required to file  reports  with the  Securities  and  Exchange
Commission under Sections 12(g) or 15(d) of the Securities Exchange Act of 1934,
or (c) such time as you hold,  in the  aggregate,  less  than  25,000  shares of
Series E Convertible  Preferred Stock (and/or such number of other securities of
the Company as the Company  may issue in exchange  for its Series E  Convertible
Preferred  Stock),  as  adjusted  from  time to time  for  stock  splits,  stock
dividends and the like.

                                              Very truly yours,

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

AGREED AND ACCEPTED THIS 28TH DAY OF JUNE, 2001

COLEMAN SWENSON HOFFMAN
BOOTH IV L.P.

By:   Its General Partner
      CSHB Ventures IV L.P.

      By:
         -------------------------
         General Partner

<PAGE>

                     CERTIFICATE AS TO DISQUALIFIED PERSONS
                     --------------------------------------

         PrimeSource Surgical, Inc. (the "Company") hereby represents,  warrants
and certifies to Coleman Swenson  Hoffman Booth IV L.P.  ("Coleman IV") that, to
the Company's  knowledge,  none of the persons listed on Exhibit A hereto holds,
directly or indirectly,  any securities of the Company, including any securities
being issued on the date  hereof,  except for the persons set forth on Exhibit B
hereto,  who hold the number and type of  securities  of the  Company  set forth
opposite  the name of each  such  person on such  Exhibit  B,  which  securities
represent  the  percentage  of the  outstanding  voting  stock  of the  Company,
including any voting stock being issued on the date hereof,  set forth  opposite
the number of securities. For purposes of this Certificate, knowledge shall mean
actual  knowledge  or  belief  of  direct  or  indirect   holdings  without  any
investigation  other than a review of the Company's  stock records and Exhibit A
hereto. If holdings of securities of the Company are disclosed on Exhibit B, the
Company has previously provided Coleman IV with a copy of such Exhibit B.

         Coleman  IV may  rely  on  this  Certificate  in  connection  with  its
acquisition of shares of stock of the Company.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
the 28th day of June, 2001.

                                         ---------------------------------------<PAGE>

                                                                    EXHIBIT 4.1

                                                                      EXECUTION

             STRUCTURED ASSET SECURITIES CORPORATION, as Depositor,

                                       and

                         U.S. BANK NATIONAL ASSOCIATION,
                                   as Trustee

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

                                 TRUST AGREEMENT

                            Dated as of June 1, 2001
                           ---------------------------

                     STRUCTURED ASSET SECURITIES CORPORATION
                       MORTGAGE PASS-THROUGH CERTIFICATES
                                 SERIES 2001-SB1

<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS                                                              Page
                                                                                                               ----
<S>                                                                                                            <C>
Article I DEFINITIONS 3

         Section 1.01. Definitions................................................................................3
         Section 1.02. Calculations Respecting Mortgage Loans....................................................34

Article II DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES........................................................34

         Section 2.01. Creation and Declaration of Trust Fund; Conveyance of Mortgage Loans......................34
         Section 2.02. Acceptance of Trust Fund by Trustee: Review of Documentation for Trust Fund...............37
         Section 2.03. Representations and Warranties of the Depositor...........................................39
         Section 2.04. Discovery of Breach.......................................................................40
         Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans....................................40
         Section 2.06. Grant Clause..............................................................................41
         Section 2.07. Optional Purchase of Mortgage Loans.......................................................42

Article III THE CERTIFICATES.....................................................................................43

         Section 3.01. The Certificates..........................................................................43
         Section 3.02. Registration..............................................................................44
         Section 3.03. Transfer and Exchange of Certificates.....................................................44
         Section 3.04. Cancellation of Certificates..............................................................50
         Section 3.05. Replacement of Certificates...............................................................50
         Section 3.06. Persons Deemed Owners.....................................................................50
         Section 3.07. Temporary Certificates....................................................................50
         Section 3.08. Appointment of Paying Agent...............................................................51
         Section 3.09. Book-Entry Certificates...................................................................51

Article IV ADMINISTRATION OF THE TRUST FUND......................................................................52

         Section 4.01. [Reserved]................................................................................52
         Section 4.02. [Reserved]................................................................................52
         Section 4.03. Reports to Certificateholders.............................................................52
         Section 4.04. Certificate Account.......................................................................55

Article V DISTRIBUTIONS TO HOLDERS OF CERTIFICATES...............................................................57

         Section 5.01. Distributions Generally...................................................................57
         Section 5.02. Distributions from the Certificate Account................................................57
         Section 5.03. Allocation of Realized Losses.............................................................62
         Section 5.04. Advances by the Trustee...................................................................64

Article VI CONCERNING THE TRUSTEE; EVENTS OF DEFAULT.............................................................65

         Section 6.01. Duties of Trustee.........................................................................65
         Section 6.02. Certain Matters Affecting the Trustee.....................................................66

</TABLE>
                                       i
<PAGE>

<TABLE>

<S>                                                                                                            <C>
         Section 6.03. Trustee Not Liable for Certificates.......................................................68
         Section 6.04. Trustee May Own Certificates..............................................................68
         Section 6.05. Eligibility Requirements for Trustee......................................................68
         Section 6.06. Resignation and Removal of Trustee........................................................68
         Section 6.07. Successor Trustee.........................................................................69
         Section 6.08. Merger or Consolidation of Trustee........................................................70
         Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian..................................70
         Section 6.10. Authenticating Agents.....................................................................71
         Section 6.11. Indemnification of Trustee................................................................72
         Section 6.12. Compensation of the Trustee...............................................................73
         Section 6.13. Collection of Monies......................................................................73
         Section 6.14. Trustee To Act; Appointment of Successor..................................................73
         Section 6.15. Additional Remedies of Trustee Upon Event of Default......................................75
         Section 6.16. Waiver of Defaults........................................................................75
         Section 6.17. Notification to Holders...................................................................76
         Section 6.18. Directions by Certificateholders and Duties of Trustee During Event of Default............76
         Section 6.19. Action Upon Certain Failures of the Servicer and Upon Event of Default....................76

Article VII PURCHASE AND TERMINATION OF THE TRUST FUND...........................................................76

         Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund Upon Purchase or
                          Liquidation of All Mortgage Loans......................................................76
         Section 7.02. Procedure Upon Termination of Trust Fund..................................................77
         Section 7.03. Additional Trust Fund Termination Requirements............................................78

Article VIII RIGHTS OF CERTIFICATEHOLDERS........................................................................78

         Section 8.01. Limitation on Rights of Holders...........................................................78
         Section 8.02. Access to List of Holders.................................................................79
         Section 8.03. Acts of Holders of Certificates...........................................................80

Article IX ADMINISTRATION AND SERVICING OF MORTGAGE LOANS........................................................81

         Section 9.01. Trustee To Retain Possession of Certain Insurance Policies and Documents..................81
         Section 9.02. Preparation of Tax Returns and Other Reports..............................................81
         Section 9.03. Release of Mortgage Files.................................................................82

Article X REMIC ADMINISTRATION...................................................................................82

         Section 10.01. REMIC Administration.....................................................................82
         Section 10.02. Prohibited Transactions and Activities...................................................84
         Section 10.03. Indemnification with Respect to Certain Taxes and Loss of REMIC Status...................85
         Section 10.04. REO Property.............................................................................85

</TABLE>

                                       ii

<PAGE>

<TABLE>

<S>                                                                                                           <C>
Article XI MISCELLANEOUS PROVISIONS..............................................................................86

         Section 11.01. Binding Nature of Agreement; Assignment..................................................86
         Section 11.02. Entire Agreement.........................................................................86
         Section 11.03. Amendment................................................................................86
         Section 11.04. Voting Rights............................................................................87
         Section 11.05. Provision of Information.................................................................87
         Section 11.06. Governing Law............................................................................88
         Section 11.07. Notices..................................................................................88
         Section 11.08. Severability of Provisions...............................................................88
         Section 11.09. Indulgences; No Waivers..................................................................88
         Section 11.10. Headings Not To Affect Interpretation....................................................89
         Section 11.11. Benefits of Agreement....................................................................89
         Section 11.12. Special Notices to the Rating Agencies...................................................89
         Section 11.13. Counterparts.............................................................................90
         Section 11.14. Transfer of Servicing....................................................................90
         Section 11.15. Statements to Fannie Mae.................................................................91

</TABLE>

                                   ATTACHMENTS

Exhibit A         Forms of Certificates
Exhibit B-1       Form of Trustee Initial Certification
Exhibit B-2       Form of Trustee Interim Certification
Exhibit B-3       Form of Final Certification
Exhibit B-4       Form of Endorsement
Exhibit C         Request for Release of Documents and Receipt
Exhibit D-l       Form of Residual Certificate Transfer Affidavit (Transferee)
Exhibit D-2       Form of Residual Certificate Transfer Affidavit (Transferor)
Exhibit E         Servicing Agreement
Exhibit F         Form of Rule 144A Transfer Certificate
Exhibit G         Form of Purchaser's Letter for Institutional Accredited
                  Investors
Exhibit H         Form of ERISA Transfer Affidavit
Exhibit I         Monthly Remittance Advice
Exhibit J         Monthly Electronic Data Transmission
Exhibit K         Custodial Agreements
Exhibit L         [Omitted]
Exhibit M         [Omitted]
Exhibit N-1       Form of Transfer Certificate for Transfer from Restricted
                  Global Security to Regulation S Global Security pursuant to
                  Section 3.03(h)(B)
Exhibit N-2       Form of Transfer Certificate for Transfer from Regulation S
                  Global Security to Restricted Global Securities pursuant to
                  Section 3.03(h)(C)

Mortgage Loan Schedules
Schedule A        All Mortgage Loans (by Mortgage Pool)
Schedule B        Mortgage Loans with Retained Interest

                                      iii

<PAGE>

                                       iv

<PAGE>

         This TRUST AGREEMENT, dated as of June 1, 2001 (the "Agreement"), is by
and between STRUCTURED ASSET SECURITIES CORPORATION, a Delaware corporation, as
depositor (the "Depositor"), and U.S. BANK NATIONAL ASSOCIATION, a national
banking association, as trustee (the "Trustee").

                              PRELIMINARY STATEMENT

         The Depositor has acquired the Mortgage Loans from Lehman Capital, A
Division of Lehman Brothers Holdings Inc. (the "Seller") and at the Closing Date
is the owner of the Mortgage Loans and the other property being conveyed by it
to the Trustee for inclusion in the Trust Fund. On the Closing Date, the
Depositor will acquire the Certificates from the Trust Fund, as consideration
for its transfer to the Trust Fund of the Mortgage Loans and the other property
constituting the Trust Fund. The Depositor has duly authorized the execution and
delivery of this Agreement to provide for the conveyance to the Trustee of the
Mortgage Loans and the other property constituting the Trust Fund. All covenants
and agreements made by the Depositor and the Trustee herein with respect to the
Mortgage Loans and the other property constituting the Trust Fund are for the
benefit of the Holders from time to time of the Certificates. The Depositor is
entering into this Agreement, and the Trustee is accepting the Trust Fund
created hereby, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged.

         As provided herein, the Trustee shall elect that the Trust Fund be
treated for federal income tax purposes as comprising a real estate mortgage
investment conduit (the "REMIC"). Each Certificate, other than the Class R
Certificate, represents ownership of a regular interest in the REMIC for
purposes of the REMIC Provisions. The Class R Certificate represents ownership
of the sole class of residual interest in the REMIC for purposes of the REMIC
Provisions. The startup day for the REMIC created hereby for purposes of the
REMIC Provisions is the Closing Date. In addition, for purposes of the REMIC
Provisions, the latest possible maturity date for each regular interest in the
REMIC created hereby is the latest date specified in Section 7.01.

         The following table sets forth (or describes) the Class designation,
Certificate Interest Rate, initial Class Principal Amount, and minimum
denomination for each Class of Certificates that comprise the interests in the
Trust Fund created hereunder.

                                       1
<PAGE>

                                                  Initial Class        Minimum
 Class Designation   Certificate Interest Rate   Principal Amount   Denomination
 -----------------   -------------------------   ----------------   ------------
     Class A1                3.375%              $ 68,000,000.00     $   25,000
     Class A2                3.375%               121,249,000.00         25,000
     Class A3                3.375%                 1,891,000.00         25,000
     Class A4                3.375%               149,440,000.00         25,000
     Class A5                3.375%                48,784,000.00         25,000
     Class AIO               3.375%                        (1)        1,000,000
     Class APO               0.000%                 1,936,763.00         25,000
     Class B1                3.375%                10,748,000.00        100,000
     Class B2                3.375%                 7,523,000.00        100,000
     Class B3                3.375%                 5,373,000.00        100,000
     Class B4                3.375%                 4,299,000.00        100,000
     Class B5                3.375%                 3,223,000.00        100,000
     Class B6                3.375%                 7,539,836.00        100,000
     Class R                 3.375%                       100.00            100

---------------------------
(1)      The Class AIO Certificates have no Class Principal Amount. The Class
         AIO Certificates will accrue interest on a Class Notional Amount equal
         to the sum of the related Component Notional Amounts of its Components.

         As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance of $430,006,690.

         For purposes hereof, each pool of mortgage loans constitutes a fully
separate and distinct sub-trust.

                                        2
<PAGE>

                                   Article I

                                   DEFINITIONS

Section 1.01.     Definitions.

         The following words and phrases, unless the context otherwise requires,
shall have the following meanings:

         Accepted Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage servicing practices of prudent
mortgage servicing institutions that 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 (y) as provided
in the Servicing Agreement, to the extent applicable to the Servicer.

         Accountant: A person engaged in the practice of accounting who (except
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.

         Accretion Directed Certificate:  None.

         Accretion Termination Date:  None.

         Accrual Amount: As to any Class of Accrual Certificates and each
Distribution Date through the Credit Support Depletion Date, the sum of (x) any
amount of Accrued Certificate Interest allocable to such Class pursuant to
Section 5.02(a)(ii) on such Distribution Date and (y) any Interest Shortfall
allocable to such Class pursuant to Section 5.02(a)(iii) on such Distribution
Date. As to any Class of Accrual Certificates and each Distribution Date after
the Credit Support Depletion Date, zero.

         Accrual Certificate:  None.

         Accrual Component:  None.

         Accrual Period: With respect to any Distribution Date and any Class of
Certificates (other than any Class of Principal Only Certificates), the
one-month period beginning immediately following the end of the preceding
Accrual Period (or from the Cut-off Date, in the case of the first Accrual
Period) and ending on the last day of the month immediately preceding the month
in which such Distribution Date occurs.

         Accrued Certificate Interest: As to any Class of Certificates (other
than the Class A2, Class AIO and Class APO Certificates) and any Component
(other than the Components of the Class APO Certificates), and any Distribution
Date, the product of the Certificate Interest Rate for such Class of
Certificates (or the Component Interest Rate, for such Component) and the Class
Principal Amount (or Class Notional Amount) of such Class of Certificates (or
the Component Principal Amount of such Component) immediately preceding such
Distribution Date, as reduced by such Class's or Component's share of the
interest portion of (i) any Excess Losses for the related Mortgage Pool for such
Distribution Date and (ii) any Relief Act

                                       3
<PAGE>

Reduction, in each case allocable among the Senior Certificates and, if
applicable, the related Component of the related Certificate Group pro rata
based on the Accrued Certificate Interest otherwise distributable thereto, and
allocable to the Subordinate Certificates pro rata based on interest accrued on
their respective Apportioned Principal Balances. As to the Class AIO and Class
A2 Certificates and any Distribution Date, Accrued Certificate Interest will
equal the sum of Accrued Certificate Interest on each Component thereof.
Interest shall be calculated for such Certificates and Components on the basis
of a 360-day year consisting of twelve 30-day months.

         Act:  As defined in Section 3.03(c).

         Additional Collateral:  None.

         Advance: An advance of the aggregate of payments of principal and
interest (net of the Servicing Fee) on one or more Mortgage Loans that were due
on the Due Date in the related Due Period and not received as of the close of
business on the related Determination Date, required to be made by or on behalf
of the Servicer (or by the Trustee) pursuant to Section 5.04.

         Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

         Aggregate Principal Balance:  The aggregate of the Scheduled Principal
Balances for all Mortgage Loans at the date of determination.

         Aggregate Subordinate Percentage: With respect to any Distribution
Date, the sum of the Class Principal Amounts of the Subordinate Certificates
immediately prior to such date divided by the sum of the Non-APO Pool Balances
for all Mortgage Pools for the immediately preceding Distribution Date.

         Aggregate Voting Interests: The aggregate of the Voting Interests of
all the Certificates under this Agreement.

         Agreement: This Trust Agreement and all amendments and supplements
hereto.

         APO Percentage: As to any Discount Mortgage Loan, the percentage
equivalent of a fraction, the numerator of which is the applicable Designated
Rate minus the Net Mortgage Rate of such Discount Mortgage Loan and the
denominator of which is the applicable Designated Rate. As to any Non-Discount
Mortgage Loan, 0%.

         APO Principal Distribution Amount: For any Distribution Date and for
each Mortgage Pool, the sum of the following amounts:

                  (i) the applicable APO Percentage of the principal portion of
         each Scheduled Payment (without giving effect to any Debt Service
         Reduction occurring prior

                                       4
<PAGE>

         to the Bankruptcy Coverage Termination Date) on each Mortgage Loan in
         the related Mortgage Pool due during the related Due Period;

                  (ii) the applicable APO Percentage of each of the following
         amounts: (1) each Principal Prepayment collected on a Mortgage Loan in
         the related Mortgage Pool during the applicable Prepayment Period, (2)
         each other unscheduled collection, including Insurance Proceeds and Net
         Liquidation Proceeds (other than with respect to any Mortgage Loan in
         the related Mortgage Pool that was finally liquidated during the
         applicable Prepayment Period), representing or allocable to recoveries
         of principal of such Mortgage Loan in the related Mortgage Pool
         received during the applicable Prepayment Period and (3) the principal
         portion of all proceeds of the purchase of any Mortgage Loan in the
         related Mortgage Pool (or, in the case of a permitted substitution,
         amounts representing a principal adjustment) actually received by the
         Trustee with respect to the applicable Prepayment Period;

                  (iii) with respect to unscheduled recoveries allocable to
         principal of any Mortgage Loan in the related Mortgage Pool that was
         finally liquidated during the related Prepayment Period, the applicable
         APO Percentage of the related net Liquidation Proceeds allocable to
         principal; and

                  (iv) any amounts described in clauses (1) through (3) for any
         previous Distribution Date that remain unpaid.

         Apportioned Principal Balance: As to any Class of Subordinate
Certificates and each Mortgage Pool and any Distribution Date, the Class
Principal Amount of such Class immediately prior to such Distribution Date
multiplied by a fraction, the numerator of which is the applicable Group
Subordinate Amount for such date and the denominator of which is the sum of the
Group Subordinate Amounts for all Mortgage Pools for such date.

         Appraised Value: With respect to any Mortgage Loan, the amount set
forth in an appraisal made in connection with the origination of such Mortgage
Loan as the value of the related Mortgaged Property.

         Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Trustee, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction, if permitted by law; provided, however, that the Trustee shall not
be responsible for determining whether any such assignment is in recordable
form.

         Authenticating Agent: Any authenticating agent appointed by the Trustee
pursuant to Section 6.10.

         Authorized Officer: Any Person who may execute an Officer's Certificate
on behalf of the Depositor.

                                       5
<PAGE>

         Available Distribution Amount: As to each Mortgage Pool and on any
Distribution Date, the sum of the following amounts:

                  (i) the total amount of all cash received by the Servicer
         through the Remittance Date for such Distribution Date on the Mortgage
         Loans of such Mortgage Pool (including proceeds of any Insurance Policy
         and any other credit support relating to such Mortgage Loans and
         including recoveries through liquidation of any REO Property), plus all
         Advances made by the Servicer (or the Trustee in its capacity as
         successor Servicer) for such Distribution Date, any Compensating
         Interest Payment for such date and Mortgage Pool and any amounts paid
         by the Servicer in respect of Prepayment Interest Shortfalls in respect
         of the related Mortgage Loans for such date, and any proceeds of any
         purchase of a related Mortgage Loan, but not including:

                           (A) all amounts distributed pursuant to Section 5.02
         on prior Distribution Dates;

                           (B) all Scheduled Payments of principal and interest
         collected but due on a date subsequent to the related Due Period;

                           (C) all Principal Prepayments received or identified
         by the Servicer after the applicable Prepayment Period (together with
         any interest payments received with such prepayments to the extent that
         they represent the payment of interest accrued on the related Mortgage
         Loans for the period subsequent to the applicable Prepayment Period);

                           (D) any other unscheduled collection, including Net
         Liquidation Proceeds and Insurance Proceeds, received by the Servicer
         after the applicable Prepayment Period;

                           (E) all fees and amounts due or reimbursable to the
         Servicer, the Trustee or a Custodian pursuant to the terms of this
         Agreement, a Custodial Agreement or the Servicing Agreement; and

                           (F) such portion of each payment in respect of
         interest representing Retained Interest; and

                  (ii) any other payment made by the Servicer, the Seller, the
         Depositor, or any other Person with respect to such Distribution Date
         (including the Purchase Price with respect to any Mortgage Loan
         purchased by the Seller, the Depositor or any other Person).

         Balloon Mortgage Loan: Any Mortgage Loan having an original term to
maturity that is shorter than its amortization schedule, and a final Scheduled
Payment that is disproportionately large in comparison to other Scheduled
Payments.

         Balloon Payment: The final Scheduled Payment in respect of a Balloon
Mortgage Loan.

         Bank: Lehman Brothers Bank, FSB and its successors and assigns.

                                       6
<PAGE>

         Bankruptcy: As to any Person, the making of an assignment for the
benefit of creditors, the filing of a voluntary petition in bankruptcy,
adjudication as a bankrupt or insolvent, the entry of an order for relief in a
bankruptcy or insolvency proceeding, the seeking of reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief, or
seeking, consenting to or acquiescing in the appointment of a trustee, receiver
or liquidator, dissolution, or termination, as the case may be, of such Person
pursuant to the provisions of either the United States Bankruptcy Code of 1986,
as amended, or any other similar state laws.

         Bankruptcy Coverage Termination Date: As to any Mortgage Pool, the
Distribution Date on which the Bankruptcy Loss Limit has been reduced to zero
(or less than zero).

         Bankruptcy Loss Limit: As of the Cut-off Date, $100,000, which amount
shall be reduced from time to time by the amount of Bankruptcy Losses allocated
to the Certificates.

         Bankruptcy Losses: With respect to the Mortgage Loans, losses that are
incurred as a result of Deficient Valuations and any reduction, in a bankruptcy
proceeding, of the amount of the Scheduled Payment on a Mortgage Loan other than
as a result of a Deficient Valuation.

         Benefit Plan Opinion: An Opinion of Counsel satisfactory to the Trustee
to the effect that any proposed transfer will not (i) cause the assets of the
Trust Fund to be regarded as plan assets for purposes of the Plan Asset
Regulations or (ii) give rise to any fiduciary duty on the part of the Depositor
or the Trustee.

         Blanket Mortgage: The mortgage or mortgages encumbering a Cooperative
Property.

         Book-Entry Certificates: Beneficial interests in Certificates
designated as "Book-Entry Certificates" in this Agreement, ownership and
transfers of which shall be evidenced or made through book entries by a Clearing
Agency as described in Section 3.09; provided, that after the occurrence of a
condition whereupon book-entry registration and transfer are no longer permitted
and Definitive Certificates are to be issued to Certificate Owners, such
Book-Entry Certificates shall no longer be "Book-Entry Certificates." As of the
Closing Date, all of the Classes of Certificates listed in the table in the
Preliminary Statement, other than the Class R Certificates, constitute
Book-Entry Certificates.

         Business Day: Any day other than (i) a Saturday or a Sunday, (ii) a day
on which banking institutions in Colorado, Minnesota, New York, New York or the
city in which the Corporate Trust Office of the Trustee is located, or (iii)
with respect to any Remittance Date or the Servicer reporting date, the States
specified in the definition of "Business Day" in the Servicing Agreement, are
authorized or obligated by law or executive order to be closed.

         Certificate: Any one of the certificates signed and countersigned by
the Trustee in substantially the forms attached hereto as Exhibit A.

         Certificate Account: The account maintained by the Trustee in
accordance with the provisions of Section 4.04.

         Certificate Group: The Group 1 Certificates, the Group 2 Certificates,
the Group 3 Certificates or the Group 4 Certificates, as applicable.

                                       7
<PAGE>

         Certificate Interest Rate: With respect to each Class of Certificates
(other than the Principal Only Certificates), the applicable per annum rate
specified in the Preliminary Statement hereto.

         Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the owner of such Book-Entry Certificate, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).

         Certificate Principal Amount: With respect to any Certificate (other
than a Notional Certificate or a Component Certificate), at the time of
determination, the maximum specified dollar amount of principal to which the
Holder thereof is then entitled hereunder, such amount being equal to the
initial principal amount set forth on the face of such Certificate (plus, in the
case of any Negative Amortization Certificate, any Deferred Interest allocated
thereto on previous Distribution Dates, and plus, in the case of any Accrual
Certificate, its Percentage Interest of any related Accrual Amount for each
previous Distribution Date), less the amount of all principal distributions
previously made with respect to such Certificate, all Realized Losses allocated
to such Certificate, and, in the case of a Subordinate Certificate, any
Subordinate Certificate Writedown Amount allocated to such Certificates. For
purposes of Article V hereof, unless specifically provided to the contrary,
Certificate Principal Amounts (and Component Principal Amounts) shall be
determined as of the close of business of the immediately preceding Distribution
Date, after giving effect to all distributions made on such date. Notional
Certificates are issued without Certificate Principal Amounts. The Certificate
Principal Amount of any Class A2 Certificate as of any Distribution Date will
equal the sum of the Component Principal Amounts of its A2(1) and A2(2)
Components. The Certificate Principal Amount of any Class APO Certificate as of
any Distribution Date will equal the sum of the Component Principal Amounts of
the APO(1), APO(2), APO(3) and APO(4) Components.

         Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 3.02.

         Certificateholder:  The meaning provided in the definition of "Holder."

         Class:  All Certificates bearing the same class designation.

         Class A Certificate: Any Class A1, Class A2, Class A3, Class A4, Class
A5, Class AIO or Class APO Certificate.

         Class B Certificate: Any Class B1, Class B2, Class B3, Class B4, Class
B5 or Class B6 Certificate.

         Class Notional Amount: With respect to each Class of Notional
Certificates, the sum of the Component Notional Amounts of the Components
thereof.

         Class Percentage: With respect to each Class of Subordinate
Certificates, for each Distribution Date, the percentage obtained by dividing
the Class Principal Amount of such Class immediately prior to such Distribution
Date by the sum of the Class Principal Amounts of all Certificates, immediately
prior to such date.

                                       8
<PAGE>

         Class Principal Amount: With respect to each Class of Certificates
other than any Class of Notional Certificates, the aggregate of the Certificate
Principal Amounts of all Certificates of such Class at the date of
determination. With respect to each Class of Notional Certificates, zero.

         Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust Company.

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

         Clearstream: Clearstream Banking, societe anonyme, and any successor
thereto.

         Closing Date:  June 28, 2001.

         Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.

         Compensating Interest Payment:  Not applicable.

         Component:  Each of the components having the designations and initial
Component Principal Amounts as follows:

                                             Initial Component
    Designation                         Principal or Notional Amount
--------------------                -----------------------------------
A2(1) Component                                 $64,983,000
A2(2) Component                                 $56,266,000
AIO(1)                                          $ 8,691,347
AIO(2)                                          $ 3,969,845
AIO(3)                                          $14,361,955
AIO(4)                                          $ 4,872,312
APO(1)                                          $   520,904
APO(2)                                          $    85,618
APO(3)                                          $ 1,099,673
APO(4)                                          $   230,568

         Component Certificate: Any Class A2, Class AIO or Class APO
Certificate.

         Component Deferred Amount: With respect to any Distribution Date on or
prior to the Credit Support Depletion Date and, with respect to each Component
of the Class APO Certificates, (i) the aggregate of the applicable APO
Percentage of the principal portion of each Realized Loss (other than any Excess
Loss) for such Distribution Date on a Discount Mortgage

                                       9
<PAGE>

Loan in the related Mortgage Pool; and (ii) all such amounts previously
allocated thereto and not distributed to such Component as a Component Deferred
Amount.

         Component Interest Rate: With respect to each of the A2(1), A2(2),
AIO(1), AIO(2), AIO(3) and AIO(4) Components, 3.375% per annum. With respect to
each of the APO(1), APO(2), APO(3) and APO(4) Components, 0.000% per annum.

         Component Notional Amount: With respect to each of the AIO(1), AIO(2),
AIO(3) and AIO(4) Components for any Distribution Date, the product of (i) a
fraction, the numerator of which is the weighted average of the Net Mortgage
Rates of the Non-Discount Mortgage Loans in the related Mortgage Pool as of the
first day of the related Due Period minus 3.375%, and the denominator of which
is 3.375% and (ii) the aggregate Scheduled Principal Balance of the Non-Discount
Mortgage Loans in the related Mortgage Pool as of the first day of the related
Accrual Period.

         Component Principal Amount: With respect to each of the A2(1), A2(2),
APO(1), APO(2), APO(3) and APO(4) Components as of any Distribution Date, the
initial Component Principal Amount of such Component (as set forth in the
definition of "Component" above) as of the Closing Date as reduced by all
amounts previously distributed on that Component in respect of principal and the
principal portion of any Realized Losses (as defined herein) previously
allocated to that Component.

         Component Writedown Amount:  Not applicable.

         Control:  The meaning specified in Section 8-106 of the UCC.

         Conventional Loan: A Mortgage Loan that is not insured by the United
States Federal Housing Administration or guaranteed by the United States
Veterans Administration.

         Converted Mortgage Loan:  None.

         Convertible Mortgage Loan:  None.

         Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.

         Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease.

         Cooperative Loan Documents: As to any Cooperative Loan, (i) the
Cooperative Shares, together with a stock power in blank; (ii) the original
executed Security Agreement and the assignment of the Security Agreement
endorsed in blank; (iii) the original executed Proprietary Lease and the
assignment of the Proprietary Lease endorsed in blank; (iv) the original
executed Recognition Agreement and the assignment of the Recognition Agreement
(or a blanket assignment of all Recognition Agreements) endorsed in blank; (v)
the executed UCC-1 financing statement with evidence of recording thereon, which
has been filed in all places required to

                                       10
<PAGE>

perfect the security interest in the Cooperative Shares and the Proprietary
Lease; and (vi) executed UCC-3 financing statements (or copies thereof) or other
appropriate UCC financing statements required by state law, evidencing a
complete and unbroken line from the mortgagee to the Trustee with evidence of
recording thereon (or in a form suitable for recordation).

         Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.

         Cooperative Shares:  Shares issued by a Cooperative Corporation.

         Cooperative Unit: A single family dwelling located in a Cooperative
Property.

         Corporate Trust Office: For purposes of Certificate Transfers and
surrender is located at U.S. Bank National Association, 180 East Fifth Street,
ST. Paul, Minnesota 55101, Attention: Corporate Trust Operations, and for all
other purposes is located at U.S. Bank National Association, 180 East Fifth
Street, St. Paul, Minnesota 55101, Attention: Structured Finance: 2001-SB1.

         Corresponding Class:  Not Applicable.

         Corresponding Component:  None.

         Credit Score: With respect to any Mortgage Loan, a numerical assessment
of default risk with respect to the Mortgagor under such Mortgage Loan,
determined on the basis of a methodology developed by Fair, Isaac & Co., Inc.

         Credit Support Depletion Date: The Distribution Date on which, giving
effect to all distributions on such date, the aggregate Certificate Principal
Amount of the Subordinate Certificates is reduced to zero.

         Credit Support Percentage: As to any Class of Subordinate Certificates
and any Distribution Date, the sum of the Class Percentages of all Classes of
Certificates that rank lower in priority than such Class.

         Current Value: An amount determined with respect to each Mortgaged
Property on the basis of the most recent broker's price opinion obtained for
such Mortgaged Property.

         Custodial Agreement: Each custodial agreement attached as Exhibit K
hereto, and any custodial agreement subsequently executed by the Trustee
substantially in the form thereof.

         Custodian: Each custodian appointed by the Trustee pursuant to a
Custodial Agreement, and any successor thereto.

         Cut-off Date:  June 1, 2001.

                                       11
<PAGE>

         Cut-off Date Aggregate Principal Balance: With respect to the Mortgage
Loans in the Trust Fund on the Closing Date, the Aggregate Principal Balance for
all such Mortgage Loans as of the Cut-off Date.

         Debt Service Reduction: With respect to any Mortgage Loan, a reduction
of the Scheduled Payment that the related Mortgagor is obligated to pay on any
Due Date as a result of any proceeding under Bankruptcy law or any similar
proceeding.

         Deceased Holder:  Not applicable.

         Deferred Interest: With respect to any Class of Negative Amortization
Certificates and any Distribution Date, the lesser of (x) the applicable
Interest Distribution Amount for such date (without giving effect to any
Deferred Interest) and (y) the aggregate Mortgage Loan Negative Amortization, if
any, for the related Due Period.

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

         Definitive Certificate: A Certificate of any Class issued in
definitive, fully registered, certificated form.

         Deleted Mortgage Loan: A Mortgage Loan that is repurchased from the
Trust Fund pursuant to the terms hereof or as to which one or more Qualifying
Substitute Mortgage Loans are substituted therefor.

         Deposit Date: With respect to each Distribution Date, the 18th day of
the month in which such Distribution Date occurs or, if such 18th day is not a
Business Day, the next succeeding Business Day.

         Depositor: Structured Asset Securities Corporation, a Delaware
corporation having its principal place of business in New York, or its
successors in interest.

         Designated Rate:  With respect to each Mortgage Pool, 3.375% per annum.

         Determination Date: With respect to each Distribution Date, the day of
the latest Remittance Date immediately preceding such Distribution Date.

         Discount Mortgage Loan: With respect to each Mortgage Pool, any
Mortgage Loan with a Net Mortgage Rate less than the applicable Designated Rate.

         Disqualified Organization: Either (i) the United States, (ii) any state
or political subdivision thereof, (iii) any foreign government, (iv) any
international organization, (v) any agency or instrumentality of any of the
foregoing, (vi) any tax-exempt 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, (vii) any organization described in section 1381(a)(2)(C) of the
Code, (viii) any

                                       12
<PAGE>

"electing large partnership" described in section 775 of the Code, or (ix) any
other entity designated as a Disqualified Organization by relevant legislation
amending the REMIC Provisions and in effect at or proposed to be effective as of
the time of the determination. In addition, a corporation will not be treated as
an instrumentality of the United States or of any state or political subdivision
thereof if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of directors
is not selected by such governmental unit.

         Distribution Date: The 25th day of each month, or, if such 25th day is
not a Business Day, the next succeeding Business Day commencing in July 2001.

         Due Date: With respect to any Mortgage Loan, the date on which a
Scheduled Payment is due under the related Mortgage Note.

         Due Period: With respect to any Distribution Date, the period
commencing on the second day of the month immediately preceding the month in
which such Distribution Date occurs and ending on the first day of the month in
which such Distribution Date occurs.

         Eligible Account: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company acceptable to
the Rating Agencies or (ii) an account or accounts the deposits in which are
insured by the FDIC to the limits established by such corporation, provided that
any such deposits not so insured shall be maintained in an account at a
depository institution or trust company whose commercial paper or other short
term debt obligations (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the commercial
paper or other short term debt or deposit obligations of such holding company or
depository institution, as the case may be) have been rated by each Rating
Agency in its highest short-term rating category, or (iii) a segregated trust
account or accounts (which shall be a "special deposit account") maintained with
the Trustee or any other federal or state chartered depository institution or
trust company, acting in its fiduciary capacity, in a manner acceptable to the
Trustee and the Rating Agencies. Eligible Accounts may bear interest.

         Eligible Investments: Any one or more of the following obligations or
securities:

                  (i) direct obligations of, and obligations fully guaranteed as
         to timely payment of principal and interest 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 ("Direct Obligations");

                  (ii) federal funds, or demand and time deposits in,
         certificates of deposits of, or bankers' acceptances issued by, any
         depository institution or trust company (including U.S. subsidiaries of
         foreign depositories and the Trustee or any agent of the Trustee,
         acting in its respective commercial capacity) incorporated or organized
         under the laws of the United States of America or any state thereof and
         subject to supervision and examination by federal or state banking
         authorities, so long as at the time of investment or the contractual
         commitment providing for such investment the commercial paper or other
         short-term debt obligations of such depository institution or trust
         company (or, in

                                       13
<PAGE>

         the case of a depository institution or trust company which is the
         principal subsidiary of a holding company, the commercial paper or
         other short-term debt or deposit obligations of such holding company or
         deposit institution, as the case may be) have been rated by each Rating
         Agency in its highest short-term rating category or one of its two
         highest long-term rating categories;

                  (iii) repurchase agreements collateralized by Direct
         Obligations or securities guaranteed by GNMA, Fannie Mae or FHLMC with
         any registered broker/dealer subject to Securities Investors'
         Protection Corporation jurisdiction or any commercial bank insured by
         the FDIC, if such broker/dealer or bank has an uninsured, unsecured and
         unguaranteed obligation rated by each Rating Agency in its highest
         short-term rating category;

                  (iv) securities bearing interest or sold at a discount issued
         by any corporation incorporated under the laws of the United States of
         America or any state thereof which have a credit rating from each
         Rating Agency, at the time of investment or the contractual commitment
         providing for such investment, at least equal to one of the two highest
         short-term credit ratings of each Rating Agency; provided, however,
         that securities issued by any particular corporation will not be
         Eligible Investments to the extent that investment therein will cause
         the then outstanding principal amount of securities issued by such
         corporation and held as part of the Trust Fund to exceed 20% of the sum
         of the Aggregate Principal Balance and the aggregate principal amount
         of all Eligible Investments in the Certificate Account; provided,
         further, that such securities will not be Eligible Investments if they
         are published as being under review with negative implications from
         either Rating Agency;

                  (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 180 days after the date of
         issuance thereof) rated by each Rating Agency in its highest short-term
         ratings;

                  (vi)     a Qualified GIC;

                  (vii) certificates or receipts representing direct ownership
         interests in future interest or principal payments on obligations of
         the United States of America or its agencies or instrumentalities
         (which obligations are backed by the full faith and credit of the
         United States of America) held by a custodian in safekeeping on behalf
         of the holders of such receipts; and

                  (viii) any other demand, money market fund, common trust fund
         or time deposit or obligation, or interest-bearing or other security or
         investment (including those managed or advised by the Trustee or an
         Affiliate thereof), (A) rated in the highest rating category by each
         Rating Agency or (B) that would not adversely affect the then current
         rating by either Rating Agency of any of the Certificates. Such
         investments in this subsection (viii) may include money market mutual
         funds or common trust funds, including any other fund for which U.S.
         Bank National Association, ("U.S. Bank"), the Trustee, the Servicer or
         an affiliate thereof serves as an investment advisor, administrator,

                                       14
<PAGE>

         shareholder servicing agent, and/or custodian or subcustodian,
         notwithstanding that (x) U.S. Bank, the Servicer or an affiliate
         thereof charges and collects fees and expenses from such funds for
         services rendered, (y) U.S. Bank, the Servicer or an affiliate thereof
         charges and collects fees and expenses for services rendered pursuant
         to this Agreement, and (z) services performed for such funds and
         pursuant to this Agreement may converge at any time. The Trustee
         specifically authorizes U.S. Bank or an affiliate thereof to charge and
         collect from the Trustee such fees as are collected from all investors
         in such funds for services rendered to such funds (but not to exceed
         investment earnings thereon);

provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, provided that any such
investment will be a "permitted investment" within the meaning of Section
860G(a)(5) of the Code.

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

         ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
Underwriter's Exemption.

         ERISA-Restricted Certificate: Any Class A1, Class A2, Class A5, Class
AIO, Class APO, Class R, Class B1, Class B2, Class B3, Class B4, Class B5 or
Class B6 Certificate; any Certificate with a rating below the lowest applicable
rating permitted under the Underwriter's Exemption.

         Escrow Account: Any account established and maintained by the Servicer
pursuant to the Servicing Agreement.

         Euroclear: Morgan Guaranty Trust Company of New York, Brussels office,
as operator of the Euroclear System.

         Event of Default: Any one of the conditions or circumstances enumerated
in Section 8.01 of the Servicing Agreement.

         Excess Loss: Any Bankruptcy Loss, or portion thereof, in excess of the
then-applicable Bankruptcy Loss Limit, any Fraud Loss, or portion thereof, in
excess of the then-applicable Fraud Loss Limit, and any Special Hazard Loss, or
portion thereof, in excess of the then-applicable Special Hazard Loss Limit.

         Fannie Mae: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.

                                       15
<PAGE>

         Fannie Mae Conforming Mortgage Loan: Any Mortgage Loan the outstanding
principal balance of which is, as of the date of determination, equal to or less
than the maximum original loan amount limitation for single-family residential
mortgaged properties issued by Fannie Mae.

         FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.

         FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.

         Final Scheduled Distribution Date: For each Class of Certificates,
August 25, 2031.

         Financial Asset: The meaning specified in Section 8-102(a)(9) of the
UCC.

         Financial Intermediary: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Clearing Agency Participant.

         Fraud Loss: Any Realized Loss on a Liquidated Mortgage Loan sustained
by reason of a default arising from fraud, dishonesty or misrepresentation in
connection with the related Mortgage Loan, as reported by the Servicer.

         Fraud Loss Limit: With respect to any Distribution Date (x) prior to
the first anniversary of the Cut-off Date, $12,900,201 less the aggregate of
Fraud Losses since the Cut-off Date, and (y) from the first to the fourth
anniversary of the Cut-off Date, an amount equal to (1) the lesser of (a) the
Fraud Loss Limit as of the most recent anniversary of the Cut-off Date and (b)
1% of the aggregate principal balance of all the Mortgage Loans as of the most
recent anniversary of the Cut-off Date less (2) the aggregate of Fraud Losses
since the most recent anniversary of the Cut-off Date. On or after the fifth
anniversary of the Cut-off Date, the Fraud Loss Limit shall be zero.

         Global Securities: The global certificates representing the Book-Entry
Certificates.

         GNMA: The Government National Mortgage Association, a wholly owned
corporate instrumentality of the United States within HUD.

         Group 1: All of the Group 1 Certificates.

         Group 1 Certificate: Any Class A1 and Class R Certificate, the A2(1)
Component of the Class A2 Certificates, the APO(1) Component of the Class APO
Certificates and the AIO(1) Component of the Class AIO Certificates.

         Group 2: All of the Group 2 Certificates.

         Group 2 Certificate: The A2(2) Component of the Class A2 Certificates,
the APO(2) Component of the Class APO Certificates and the AIO(2) Component of
the Class AIO Certificates.

                                       16
<PAGE>

         Group 3:  All of the Group 3 Certificates.

         Group 3 Certificate: Any Class A3 Certificate, any Class A4
Certificate, the APO(3) Component of the Class APO Certificates and the AIO(3)
Component of the Class AIO Certificates.

         Group 4:  All of the Group 4 Certificates.

         Group 4 Certificate: Any Class A5 Certificate, the APO(4) Component of
the Class APO Certificates and the AIO(4) Component of the Class AIO
Certificates.

         Group Subordinate Amount: With respect to any Mortgage Pool and any
Distribution Date, the excess of the Non-APO Pool Balance of such Mortgage Pool
for the immediately preceding Distribution Date over the sum of the aggregate of
the Certificate Principal Amounts of the Non-APO Senior Certificates of the
related Certificate Group immediately prior to the related Distribution Date.

         Holder or Certificateholder: The registered owner of any Certificate as
recorded on the books of the Certificate Registrar except that, solely for the
purposes of taking any action or giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Depositor, the Trustee, the
Servicer or any Affiliate thereof shall be deemed not to be outstanding in
determining whether the requisite percentage necessary to effect any such
consent has been obtained, except that, in determining whether the Trustee shall
be protected in relying upon any such consent, only Certificates which a
Responsible Officer of the Trustee knows to be so owned shall be disregarded.
The Trustee may request and conclusively rely on certifications by the Depositor
and the Servicer in determining whether any Certificates are registered to an
Affiliate of the Depositor or the Servicer.

         HUD: The United States Department of Housing and Urban Development, or
any successor thereto.

         Independent: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and Exchange
Commission's Regulation S-X. When used with respect to any other Person, a
Person who (a) is in fact independent of another specified Person and any
Affiliate of such other Person, (b) does not have any material direct financial
interest in such other Person or any Affiliate of such other Person, and (c) is
not connected with such other Person or any Affiliate of such other Person as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.

         Individual Redemption Certificate:  Not applicable.

         Initial LIBOR Rate:  Not applicable.

         Insurance Policy: Any Primary Mortgage Insurance Policy and any
standard hazard insurance policy, flood insurance policy, earthquake insurance
policy or title insurance policy relating to the Mortgage Loans or the Mortgaged
Properties, to be in effect as of the Closing Date or thereafter during the term
of this Agreement.

                                       17
<PAGE>

         Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy, other than amounts (i) to cover expenses incurred by or on behalf of the
Servicer in connection with procuring such proceeds, (ii) to be applied to
restoration or repair of the related Mortgaged Property, (iii) required to be
paid over to the Mortgagor pursuant to law or the related Mortgage Note or (iv)
to be applied toward payment of any Retained Interest.

         Interest Distribution Amount:  Not applicable.

         Interest Shortfall: With respect to any Class of Certificates (other
than a Principal Only Certificate) and any Distribution Date, any Accrued
Certificate Interest not distributed (or added to principal) with respect to any
previous Distribution Date, other than any Net Prepayment Interest Shortfalls.

         Intervening Assignments: The original intervening assignments of the
Mortgage, notice of transfer or equivalent instrument.

         Latest Possible Maturity Date:  The Distribution Date in August 2034.

         Lehman Capital: Lehman Capital, A Division of Lehman Brothers Holdings
Inc., or any successor in interest.

         LIBOR:  Not applicable.

         LIBOR Certificate:  None.

         LIBOR Component:  None.

         LIBOR Determination Date: The second London Business Day immediately
preceding the commencement of each Accrual Period with respect to any LIBOR
Certificates other than the first such Accrual Period.

         Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Servicer has determined that all amounts that it expects to recover on behalf of
the Trust Fund from or on account of such Mortgage Loan have been recovered.

         Liquidation Expenses: Expenses that are incurred by the Servicer in
connection with the liquidation of any defaulted Mortgage Loan and are not
recoverable under the applicable Primary Mortgage Insurance Policy, including,
without limitation, foreclosure and rehabilitation expenses, legal expenses and
unreimbursed amounts expended pursuant to the Servicing Agreement.

         Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan, including any amounts remaining in the related Escrow
Account.

         Living Holder:  Not applicable.

                                       18
<PAGE>

         Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio of
the principal balance of such Mortgage Loan as of the date of determination, or
such other date as is specified, to the Current Value thereof.

         London Business Day: Any day on which banks are open for dealing in
foreign currency and exchange in London, England and New York City.

         Maintenance: With respect to any Cooperative Unit, the rent or fee paid
by the Mortgagor to the Cooperative Corporation pursuant to the Proprietary
Lease.

         Material Defect:  As defined in Section 2.02(c) hereof.

         MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
Corporation, or any successor in interest thereto.

         MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage,
or an Assignment of Mortgage, has been or will be recorded in the name of MERS,
as agent for the holder from time to time of the Mortgage Note.

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

         Mortgage: A mortgage, deed of trust or other instrument encumbering a
fee simple interest in real property securing a Mortgage Note, together with
improvements thereto.

         Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan required to be delivered to the Trustee
or a Custodian pursuant to this Agreement.

         Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage or a manufactured housing contract
conveyed, transferred, sold, assigned to or deposited with the Trustee pursuant
to Section 2.01 or Section 2.05, including without limitation, each Mortgage
Loan listed on the Mortgage Loan Schedule, as amended from time to time.

         Mortgage Loan Sale Agreement: The agreement dated as of June 1, 2001,
for the sale of the Mortgage Loans by Lehman Capital to the Depositor.

         Mortgage Loan Schedule: The schedule attached hereto as Schedule A,
which shall identify each Mortgage Loan and designate, among other data fields,
the applicable Mortgage Pool in which such Mortgage Loan is included, the
Servicer of such Mortgage Loan and the Retained Interest, if any, applicable to
such Mortgage Loan, as such schedule may be amended from time to time to reflect
the addition of Mortgage Loans to, or the deletion of Mortgage Loans from, the
Trust Fund.

         Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage under a Mortgage Loan.

         Mortgage Pool: Any of Pool 1, Pool 2, Pool 3 or Pool 4.

                                       19
<PAGE>

         Mortgage Rate: As to any Mortgage Loan, the per annum rate at which
interest accrues on such Mortgage Loan.

         Mortgaged Property: Either of (x) the fee simple interest in real
property, together with improvements thereto including any exterior improvements
to be completed within 120 days of disbursement of the related Mortgage Loan
proceeds, or (y) in the case of a Cooperative Loan, the related Cooperative
Shares and Proprietary Lease, securing the indebtedness of the Mortgagor under
the related Mortgage Loan.

         Mortgagor: The obligor on a Mortgage Note.

         Negative Amortization Certificate: None.

         Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
the related Liquidation Proceeds net of unreimbursed expenses incurred in
connection with liquidation or foreclosure and unreimbursed Advances, Servicing
Advances, Servicing Fees and Retained Interest, if any, received and retained in
connection with the liquidation of such Mortgage Loan.

         Net Mortgage Rate: With respect to any Mortgage Loan, the Mortgage Rate
thereof reduced by the sum of the Servicing Fee Rate, the applicable Retained
Interest Rate, if any, and, if applicable, the premium rate on any
lender-provided mortgage insurance.

         Net Prepayment Interest Shortfall: With respect to each Mortgage Pool
and any Distribution Date, the excess, if any, of any Prepayment Interest
Shortfalls with respect to the Mortgage Loans in such Mortgage Pool for such
date over the sum of any amounts paid by the Servicer with respect to such
shortfalls.

         Non-APO Percentage: As to any Discount Mortgage Loan, the percentage
equivalent of the fraction, the numerator of which is the Net Mortgage Rate of
such Discount Mortgage Loan and the denominator of which is the applicable
Designated Rate. As to any Non-Discount Mortgage Loan, 100%.

         Non-APO Pool Balance: As to each Mortgage Pool and any Distribution
Date, the sum of the applicable Non-APO Percentage of the Scheduled Principal
Balance of each Mortgage Loan included in such Mortgage Pool.

         Non-APO Senior Certificate: Any Senior Certificate other than the Class
APO Certificates.

         Non-APO Senior Certificate Deferred Amount: With respect to any
Distribution Date subsequent to the Credit Support Depletion Date and, with
respect to each Class or Component of Non-APO Senior Certificates, such Class's
or Component's pro rata share of the excess, if any, of the aggregate
Certificate Principal Amount of the Non-APO Senior Certificates of the related
Certificate Group as of the Credit Support Depletion Date over the Non-APO Pool
Balance of the related Mortgage Pool as of the Credit Support Depletion Date,
reduced by all amounts previously distributed to such Class or Component in
respect of such Class's or Component's Non-APO Senior Certificate Deferred
Amount on previous Distribution Dates.

                                       20
<PAGE>

         Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.

         Non-Discount Mortgage Loan: With respect to each Mortgage Pool, any
Mortgage Loan with Net Mortgage Rate equal to or greater than the applicable
Designated Rate.

         Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage
Loan.

         Non-permitted Foreign Holder:  As defined in Section 3.03(f).

         Non-U.S. Person: Any person other than (i) a citizen or resident of the
United States; (ii) a corporation (or entity treated as a corporation for tax
purposes) created or organized in the United States or under the laws of the
United States or of any state thereof, including, for this purpose, the District
of Columbia; (iii) a partnership (or entity treated as a partnership for tax
purposes) organized in the United States or under the laws of the United States
or of any state thereof, including, for this purpose, the District of Columbia
(unless provided otherwise by future Treasury regulations); (iv) an estate whose
income is includible in gross income for United States income tax purposes
regardless of its source; or (v) 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 U.S. Persons have authority to control all substantial decisions of
the trust. Notwithstanding the last clause of the preceding sentence, to the
extent provided in Treasury regulations, certain trusts in existence on August
20, 1996, and treated as U.S. Persons prior to such date, may elect to continue
to be U.S. Persons.

         Notional Amount: With respect to any Notional Certificate and any
Distribution Date, such Certificate's Percentage Interest of the Class Notional
Amount of such Class of Certificates for such Distribution Date.

         Notional Certificate: Any Class AIO Certificate.

         Notional Component: Each of the AIO(1), AIO(2), AIO(3) and AIO(4)
Components.

         Offering Document: Either of the private placement memorandum dated
June 25, 2001 relating to the Class B4, Class B5 and Class B6 Certificates, or
the Prospectus.

         Officer's Certificate: A certificate signed by the Chairman of the
Board, any Vice Chairman, the President, any Vice President or any Assistant
Vice President of a Person, and in each case delivered to the Trustee.

         Opinion of Counsel: A written opinion of counsel, reasonably acceptable
in form and substance to the Trustee, and who may be in-house or outside counsel
to the Depositor or the Servicer but which must be Independent outside counsel
with respect to any such opinion of counsel concerning the transfer of any
Residual Certificate or concerning certain matters with respect to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the taxation,
or the federal income tax status, of each REMIC. For purpose of Section
2.01(c)(i), the Opinion of Counsel referred to therein may take the form of a
memorandum of law or other acceptable assurance.

                                       21
<PAGE>

         Original Credit Support Percentage: With respect to each Class of
Subordinate Certificates, the Credit Support Percentage for such Class of
Certificates on the Closing Date.

         Original Group Subordinate Amount: With respect to each Mortgage Pool,
the Group Subordinate Amount for such Mortgage Pool on the Closing Date.

         Original Value: The lesser of (a) the Appraised Value of a Mortgaged
Property at the time the related Mortgage Loan was originated and (b) if the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price paid for the Mortgaged Property by the Mortgagor at
the time the related Mortgage Loan was originated.

         Paying Agent: Any paying agent appointed pursuant to Section 3.08.

         Percentage Interest: With respect to any Certificate and the related
Class, such Certificate's percentage interest in the undivided beneficial
ownership interest in the Trust Fund evidenced by all Certificates of the same
Class as such Certificate. With respect to any Certificate other than a Class
AIO Certificate, the Percentage Interest evidenced thereby shall equal the
initial Certificate Principal Amount thereof divided by the initial Class
Principal Amount of all Certificates of the same Class. With respect to any
Class AIO Certificate, the Percentage Interest evidenced thereby shall equal the
initial Notional Amount of such Class AIO Certificate as set forth on the face
thereof divided by the initial Class Notional Amount of the Class AIO
Certificates.

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

         Placement Agent: Lehman Brothers Inc.

         Plan Asset Regulations: The Department of Labor regulations set forth
in 29 C.F.R. 2510.3-101.

         Pool 1: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 1.

         Pool 1 Mortgage Loan:  Any Mortgage Loan in Pool 1.

         Pool 2: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 2.

         Pool 2 Mortgage Loan:  Any Mortgage Loan in Pool 2.

         Pool 3: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 3.

         Pool 3 Mortgage Loan:  Any Mortgage Loan in Pool 3.

                                       22
<PAGE>

         Pool 4: The aggregate of the Mortgage Loans identified on the Mortgage
Loan Schedule as being included in Pool 4.

         Pool 4 Mortgage Loan: The aggregate of the Mortgage Loans identified on
the Mortgage Loan Schedule as being included in Pool 4.

         Pool PMI Policy:  Not applicable.

         Prepayment Interest Shortfall: With respect to any Distribution Date
and any Principal Prepayment in part or in full, the difference between (i) one
full month's interest at the applicable Mortgage Rate (giving effect to any
applicable Relief Act Reduction), as reduced by the Servicing Fee Rate and the
applicable Retained Interest Rate, if any, on the outstanding principal balance
of such Mortgage Loan immediately prior to such prepayment and (ii) the amount
of interest actually received with respect to such Mortgage Loan in connection
with such Principal Prepayment.

         Prepayment Penalty Amounts: With respect to any Distribution Date, all
premiums or charges paid by the obligors under the related Mortgage Notes due to
Principal Prepayments collected by the Servicer during the immediately preceding
Prepayment Period.

         Prepayment Period: With respect to any Distribution Date, the calendar
month immediately preceding the month in which such Distribution Date occurs.

         Primary Mortgage Insurance Policy: Mortgage guaranty insurance, if any,
on an individual Mortgage Loan, as evidenced by a policy or certificate.

         Principal Amount Schedules:  Not applicable.

         Principal Only Certificate:  Any Class APO Certificate.

         Principal Prepayment: Any Mortgagor payment of principal (other than a
Balloon Payment) or other recovery of principal on a Mortgage Loan that is
recognized as having been received or recovered in advance of its scheduled Due
Date and applied to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the Mortgage Note or the Servicing Agreement.

         Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.

         Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.

         Prospectus: The prospectus supplement dated June 25, 2001, together
with the accompanying prospectus dated January 26, 2001, relating to each Class
of Certificates other than the Class B4, Class B5 and Class B6 Certificates.

         Purchase Price: With respect to the repurchase of a Mortgage Loan
pursuant to this Agreement, an amount equal to the sum of (a) 100% of the unpaid
principal balance of such

                                       23
<PAGE>

Mortgage Loan, (b) accrued interest thereon at the Mortgage Rate, from the date
as to which interest was last paid to (but not including) the Due Date
immediately preceding the related Distribution Date and (c) any unreimbursed
Servicing Advances with respect to such Mortgage Loan. The Servicer (or the
Trustee, if applicable) shall be reimbursed from the Purchase Price for any
Mortgage Loan or related REO Property for any Advances made with respect to such
Mortgage Loan that are reimbursable to the Servicer or the Trustee under this
Agreement or the Servicing Agreement, as well as any unreimbursed Servicing
Advances and accrued and unpaid Servicing Fees, as applicable.

         QIB:  As defined in Section 3.03(c).

         Qualified GIC: A guaranteed investment contract or surety bond
providing for the investment of funds in the Certificate Account and insuring a
minimum, fixed or floating rate of return on investments of such funds, which
contract or surety bond shall:

         (a) be an obligation of an insurance company or other corporation whose
long-term debt is rated by each Rating Agency in one of its two highest rating
categories or, if such insurance company has no long-term debt, whose claims
paying ability is rated by each Rating Agency in one of its two highest rating
categories, and whose short-term debt is rated by each Rating Agency in its
highest rating category;

         (b) provide that the Trustee may exercise all of the rights under such
contract or surety bond without the necessity of taking any action by any other
Person;

         (c) provide that if at any time the then current credit standing of the
obligor under such guaranteed investment contract is such that continued
investment pursuant to such contract of funds would result in a downgrading of
any rating of the Certificates, the Trustee shall terminate such contract
without penalty and be entitled to the return of all funds previously invested
thereunder, together with accrued interest thereon at the interest rate provided
under such contract to the date of delivery of such funds to the Trustee;

         (d) provide that the Trustee's interest therein shall be transferable
to any successor trustee hereunder; and

         (e) provide that the funds reinvested thereunder and accrued interest
thereon be returnable to the Certificate Account, as the case may be, not later
than the Business Day prior to any Distribution Date.

         Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the related Mortgaged Properties are located,
duly authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided and whose claims paying ability is
rated by each Rating Agency in its highest rating category or whose selection as
an insurer will not adversely affect the rating of the Certificates.

         Qualifying Substitute Mortgage Loan: In the case of a Mortgage Loan
substituted for a Deleted Mortgage Loan, a Mortgage Loan that, on the date of
substitution, (i) has a Scheduled Principal Balance (together with that of any
other mortgage loan substituted for the same Deleted Mortgage Loan) as of the
Due Date in the month in which such substitution occurs not in excess

                                       24
<PAGE>

of the Scheduled Principal Balance of the related Deleted Mortgage Loan,
provided, however, that, to the extent that the Scheduled Principal Balance of
such Mortgage Loan is less than the Scheduled Principal Balance of the related
Deleted Mortgage Loan, then such differential in principal amount, together with
interest thereon at the applicable Mortgage Rate net of the Servicing Fee from
the date as to which interest was last paid through the end of the Due Period in
which such substitution occurs, shall be paid by the party effecting such
substitution to the Trustee for deposit into the Certificate Account, and shall
be treated as a Principal Prepayment hereunder; (ii) has a Net Mortgage Rate not
lower than the Net Mortgage Rate of the related Deleted Mortgage Loan and will
be a Discount Mortgage Loan if the Deleted Mortgage Loan was a Discount Mortgage
Loan or a Non-Discount Mortgage Loan if the Deleted Mortgage Loan was a
Non-Discount Mortgage Loan; (iii) has a remaining stated term to maturity not
longer than, and not more than one year shorter than, the remaining term to
stated maturity of the related Deleted Mortgage Loan; (iv) (A) has a
Loan-to-Value Ratio as of the date of such substitution of not greater than 80%,
provided, however, that if the related Deleted Mortgage Loan has a Loan-to-Value
Ratio of greater than 80%, then the Loan-to-Value Ratio of such substitute
Mortgage Loan may be greater than 80% but shall not be greater than the
Loan-to-Value Ratio of the related Deleted Mortgage Loan and (B) the addition of
such substitute Mortgage Loan does not increase the weighted average
Loan-to-Value Ratio of the related Mortgage Pool by more than 5%; (v) will
comply with all of the representations and warranties relating to Mortgage Loans
set forth herein, as of the date as of which such substitution occurs; (vi) is
not a Cooperative Loan unless the related Deleted Mortgage Loan was a
Cooperative Loan; (vii) if applicable, has the same index as and a margin not
less than that of the related Deleted Mortgage Loan; (viii) has not been
delinquent for a period of more than 30 days more than once in the twelve months
immediately preceding such date of substitution; (ix) is covered by a Primary
Mortgage Insurance Policy if the related Deleted Mortgage Loan is so covered,
and the Loan-to-Value Ratio of such Mortgage Loan is greater than 80%; and (x)
has a Credit Score not greater than 20 points lower than the Credit Score of the
related Deleted Mortgage Loan, provided, however, that if the Deleted Mortgage
Loan does not have a Credit Score, then such substitute Mortgage Loan shall have
a Credit Score equal to or greater than 700. In the event that either one
mortgage loan is substituted for more than one Deleted Mortgage Loan or more
than one mortgage loan is substituted for one or more Deleted Mortgage Loans,
then (a) the Scheduled Principal Balance referred to in clause (i) above shall
be determined such that the aggregate Scheduled Principal Balance of all such
substitute Mortgage Loans shall not exceed the aggregate Scheduled Principal
Balance of all Deleted Mortgage Loans and (b) each of (1) the rate referred to
in clause (ii) above, (2) the remaining term to stated maturity referred to in
clause (iii) above, (3) the Loan-to-Value Ratio referred to in clause (iv) above
and (4) the Credit Score referred to in clause (x) above shall be determined on
a weighted average basis, provided that the final scheduled maturity date of any
Qualifying Substitute Mortgage Loan shall not exceed the Final Scheduled
Distribution Date of any Class of Certificates. Whenever a Qualifying Substitute
Mortgage Loan is substituted for a Deleted Mortgage Loan pursuant to this
Agreement, the party effecting such substitution shall certify such
qualification in writing to the Trustee.

         Rating Agency:  Each of Moody's and S&P.

         Realized Loss: (a) with respect to each Liquidated Mortgage Loan, an
amount equal to (i) the unpaid principal balance of such Mortgage Loan as of the
date of liquidation, plus (ii)

                                       25
<PAGE>

interest at the applicable Net Mortgage Rate from the date as to which interest
was last paid up to the last day of the month of such liquidation, minus (iii)
Liquidation Proceeds received, net of amounts that are reimbursable to the
Servicer with respect to such Mortgage Loan (other than Advances of principal
and interest) including expenses of liquidation, and (b) with respect to each
Mortgage Loan that has become the subject of a Deficient Valuation, the
difference between the unpaid principal balance of such Mortgage Loan
immediately prior to such Deficient Valuation and the unpaid principal balance
of such Mortgage Loan as reduced by the Deficient Valuation. In determining
whether a Realized Loss on a Liquidated Mortgage Loan is a Realized Loss of
interest or principal, Liquidation Proceeds shall be allocated, first, to
payment of expenses related to such Liquidated Mortgage Loan (including payment
of any Retained Interest), then to accrued unpaid interest and finally to reduce
the principal balance of the Mortgage Loan.

         Recognition Agreement: With respect to any Cooperative Loan, an
agreement between the related Cooperative Corporation and the originator of such
Mortgage Loan to establish the rights of such originator in the related
Cooperative Property.

         Record Date: With respect to any Distribution Date and each Class of
Certificates, the close of business on the last Business Day of the month
immediately preceding the month in which such Distribution Date occurs.

         Redemption Certificate:  None.

         Reference Banks:  Not applicable.

         Regulation S: Regulation S promulgated under the Act or any successor
provision thereto, in each case as the same may be amended from time to time;
and all references to any rule, section or subsection of, or definition or term
contained in, Regulation S means such rule, section, subsection, definition or
term, as the case may be, or any successor thereto, in each case as the same may
be amended from time to time.

         Regulation S Global Security: The meaning specified in Section 3.01(c).

         Reimbursement Amount: Not applicable.

         Relevant UCC: The Uniform Commercial Code as in effect in the
applicable jurisdiction.

         Relief Act Reduction: With respect to any Mortgage Loan as to which
there has been a reduction in the amount of interest collectible thereon as a
result of application of the Solders' and Sailors' Civil Relief Act of 1940, as
amended, any amount by which interest collectible on such Mortgage Loan for the
Due Date in the related Due Period is less than interest accrued thereon for the
applicable one-month period at the Mortgage Rate without giving effect to such
reduction.

         REMIC: The assets of the Trust Fund designated as a REMIC pursuant to
Section 10.01(a) hereof.

                                       26
<PAGE>

         REMIC Provisions: The provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at sections 860A
through 86OG of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations, including proposed regulations and rulings, and administrative
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.

         Remittance Date: The day in each calendar month on which the Servicer
is required to remit payments to the Certificate Account, as specified in the
Servicing Agreement, which is the 18th day of each month (or if such 18th day is
not a Business Day, the next succeeding Business Day).

         REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the REMIC
Provisions.

         Reserve Interest Rate:  Not applicable.

         Residual Certificate:  Any Class R Certificate.

         Responsible Officer: When used with respect to the Trustee, any Vice
President, Assistant Vice President, the Secretary, any assistant secretary, the
Treasurer, or any assistant treasurer, working in its corporate trust department
and having direct responsibility for the administration of this Agreement.

         Restricted Certificate: Any Class B4, Class B5 or Class B6 Certificate
(but excluding any Regulation S Global Security) and any Restricted Global
Security.

         Restricted Global Security:  The meaning specified in Section 3.01(c).

         Retained Interest: Interest in respect of each Retained Interest
Mortgage Loan, retained in each case by the Retained Interest Holder at the
Retained Interest Rate.

         Retained Interest Mortgage Loan: Each Mortgage Loan listed on Schedule
B hereto.

         Retained Interest Holder: Lehman Capital or any successor in interest
by assignment or otherwise.

         Retained Interest Rate: With respect to each Retained Interest Mortgage
Loan and any Distribution Date, the product of (i) twelve and (ii) a fraction,
expressed as a percentage, the numerator of which is the amount, if any, by
which (A) an amount equal to interest for the related Due Period on the
outstanding principal balance of such Retained Interest Mortgage Loan as of the
first day of the related Due Period calculated in accordance with the related
Mortgage Note exceeds (B) an amount equal to the product of (1) the lowest
mortgage interest rate as of the Cut-off Date applicable to any portion of the
outstanding principal balance of such Retained Interest Mortgage Loan divided by
twelve and (2) the outstanding principal balance of such Retained Interest
Mortgage Loan as of the first day of the related Due Period, and the denominator
of which is the outstanding principal balance of such Retained Interest Mortgage
Loan.

                                       27
<PAGE>

         S&P: Standard & Poor's Credit Market Services, a division of The
McGraw-Hill Companies, Inc., or any successor in interest.

         Scheduled Amount:  Not applicable.

         Scheduled Certificate:  None.

         Scheduled Component:  None.

         Scheduled Payment: Each scheduled payment of principal and interest to
be paid by the Mortgagor on a Mortgage Loan, as reduced (except where otherwise
specified herein) by the amount of any related Debt Service Reduction (excluding
all amounts of principal and interest that were due on or before the Cut-off
Date whenever received) and, in the case of an REO Property, an amount
equivalent to the Scheduled Payment that would have been due on the related
Mortgage Loan if such Mortgage Loan had remained in existence. In the case of
any bi-weekly payment Mortgage Loan, all payments due on such Mortgage Loan
during any Due Period shall be deemed collectively to constitute the Scheduled
Payment due on such Mortgage Loan in such Due Period.

         Scheduled Principal Balance: With respect to (i) any Mortgage Loan as
of any Distribution Date, the principal balance of such Mortgage Loan at the
close of business on the Cut-off Date, after giving effect to principal payments
due on or before the Cut-off Date, whether or not received, less an amount equal
to principal payments due after the Cut-off Date and on or before the Due Date
in the related Due Period, whether or not received from the Mortgagor or
advanced by the Servicer, and all amounts allocable to unscheduled principal
payments (including Principal Prepayments, Net Liquidation Proceeds, Insurance
Proceeds and condemnation proceeds, in each case to the extent identified and
applied prior to or during the applicable Prepayment Period) and (ii) any REO
Property as of any Distribution Date, the Scheduled Principal Balance of the
related Mortgage Loan on the Due Date immediately preceding the date of
acquisition of such REO Property by or on behalf of the Trustee (reduced by any
amount applied as a reduction of principal on the Mortgage Loan). With respect
to any Mortgage Loan as of the Cut-off Date, as specified in the Mortgage Loan
Schedule.

         Security Agreement: With respect to any Cooperative Loan, the agreement
between the owner of the related Cooperative Shares and the originator of the
related Mortgage Note that defines the terms of the security interest in such
Cooperative Shares and the related Proprietary Lease.

         Security Entitlement: The meaning specified in Section 8-102(a)(17) of
the UCC.

         Seller: Lehman Capital, A Division of Lehman Brothers Holdings Inc., or
any successor in interest.

         Senior Certificate: Any Class A1, Class A2, Class A3, Class A4, Class
A5, Class APO, Class AIO or Class R Certificate.

         Senior Percentage: With respect to each Mortgage Pool and any
Distribution Date, the percentage equivalent of the fraction, the numerator of
which is the aggregate of the Class

                                       28
<PAGE>

Principal Amounts (or Component Principal Amounts) of each Class of Senior
Certificates (other than any Class APO Certificates) and the Components for the
related Mortgage Pool immediately prior to such Distribution Date and the
denominator of which is the related Non-APO Pool Balance for the immediately
preceding Distribution Date.

         Senior Prepayment Percentage: With respect to each Mortgage Pool and
any Distribution Date occurring during the five years beginning on the first
Distribution Date, 100%. With respect to each Mortgage Pool and for any
Distribution Date occurring on or after the fifth anniversary of the first
Distribution Date, the related Senior Percentage plus the following percentage
of the related Subordinate Percentage for such Distribution Date: for any
Distribution Date in the first year thereafter, 70%; for any Distribution Date
in the second year thereafter, 60%; for any Distribution Date in the third year
thereafter, 40%; for any Distribution Date in the fourth year thereafter, 20%;
and for any subsequent Distribution Date, 0%; provided, however, that if on any
of the foregoing Distribution Dates the Senior Percentage for any Mortgage Pool
exceeds the initial Senior Percentage for such Mortgage Pool, the Senior
Prepayment Percentage for any Mortgage Pool for such Distribution Date shall
once again equal 100% for such Distribution Date.

         Notwithstanding the foregoing, no decrease in the Senior Prepayment
Percentage for any Mortgage Pool below the level in effect for the most recent
prior period set forth in the paragraph above shall be effective on any
Distribution Date if, as of the first Distribution Date as to which any such
decrease applies, (i) the average outstanding principal balance on such
Distribution Date and for the preceding five Distribution Dates of all Mortgage
Loans in such Mortgage Pool that were delinquent 60 days or more (including for
this purpose any Mortgage Loans in foreclosure and the Scheduled Payments that
would have been due on Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust Fund if the related Mortgage
Loan had remained in existence) is greater than or equal to 50% of the
applicable Group Subordinate Amount immediately prior to such Distribution Date
or (ii) cumulative Realized Losses with respect to the Mortgage Loans in any
Mortgage Pool exceed (a) with respect to the Distribution Date on the fifth
anniversary of the first Distribution Date, 30% of the related Original Group
Subordinate Amount, (b) with respect to the Distribution Date on the sixth
anniversary of the first Distribution Date, 35% of the related Original Group
Subordinate Amount, (c) with respect to the Distribution Date on the seventh
anniversary of the first Distribution Date, 40% of the related Original Group
Subordinate Amount, (d) with respect to the Distribution Date on the eighth
anniversary of the first Distribution Date, 45% of the related Original Group
Subordinate Amount, and (e) with respect to the Distribution Date on the ninth
anniversary of the first Distribution Date or thereafter, 50% of the related
Original Group Subordinate Amount. After the Class Principal Amount of each
Class of Senior Certificates (and the Component Principal Amount of the related
Components) in any Certificate Group has been reduced to zero, the Senior
Prepayment Percentage for the related Mortgage Pool shall be 0%.

Senior Principal Distribution Amount: For each Certificate Group and any
Distribution Date, the sum of the following amounts:

                  (i) the product of (1) the related Senior Percentage for such
         date and (2) the principal portion (multiplied by the applicable
         Non-APO Percentage) of each Scheduled Payment (without giving effect to
         any Debt Service Reduction occurring prior to the

                                       29
<PAGE>

         Bankruptcy Coverage Termination Date), on each Mortgage Loan in the
         related Mortgage Pool due during the related Due Period;

                  (ii) the product of (a) the related Senior Prepayment
         Percentage for such date and (b) each of the following amounts
         (multiplied by the applicable Non-APO Percentage): (1) each Principal
         Prepayment on the Mortgage Loans in the related Mortgage Pool collected
         during the related Prepayment Period, (2) each other unscheduled
         collection, including Insurance Proceeds and Net Liquidation Proceeds
         (other than with respect to any Mortgage Loan in the related Mortgage
         Pool that was finally liquidated during the related Prepayment Period)
         representing or allocable to recoveries of principal received during
         the related Prepayment Period, and (3) the principal portion of all
         proceeds of the purchase of any Mortgage Loan in the related Mortgage
         Pool (or, in the case of a permitted substitution, amounts representing
         a principal adjustment) actually received by the Trustee during the
         related Prepayment Period;

                  (iii) with respect to unscheduled recoveries allocable to
         principal of any Mortgage Loan in the related Mortgage Pool that was
         finally liquidated during the related Prepayment Period, the lesser of
         (a) the related net Liquidation Proceeds allocable to principal
         (multiplied by the applicable Non-APO Percentage) and (b) the product
         of the related Senior Prepayment Percentage for such date and the
         Scheduled Principal Balance (multiplied by the applicable Non-APO
         Percentage) of such related Mortgage Loan at the time of liquidation;
         and

                  (iv) any amounts described in clauses (i) through (iii) for
         any previous Distribution Date that remain unpaid.

If on any Distribution Date the Class Principal Amount of each Class of Senior
Certificates (other than any Class APO Certificates) and the Component Principal
Amount of the related Component in any Certificate Group has been reduced to
zero, the Senior Principal Distribution Amount for such Certificate Group for
such date (following such reduction) and each subsequent Distribution Date shall
be zero.

         Servicer: Any Servicer that has entered into the Servicing Agreement
attached as Exhibit E hereto, or any successors in interest. Initially, the
Servicer is Aurora Loan Services Inc.

         Servicing Advances: Expenditures incurred by the Servicer in connection
with the liquidation or foreclosure of a Mortgage Loan which are eligible for
reimbursement under the Servicing Agreement.

         Servicing Agreement: The Servicing Agreement between the Servicer and
the Seller dated as of June 1, 2001, attached hereto in Exhibit E, and any other
servicing agreement entered into between a successor servicer and the Seller or
the Trustee pursuant to the terms hereof.

         Servicing Fee: The Servicing Fee specified in the Servicing Agreement.

         Servicing Fee Rate: With respect to the Servicer, as specified in the
Servicing Agreement.

                                       30
<PAGE>

         Servicing Officer: Any officer of the Servicer involved in or
responsible for the administration and servicing or of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to the
Trustee, as such list may from time to time be amended.

         Special Hazard Loss: With respect to the Mortgage Loans, (x) any
Realized Loss arising out of any direct physical loss or damage to a Mortgaged
Property which is caused by or results from any cause, exclusive of any loss
covered by a hazard policy or a flood insurance policy required to be maintained
in respect of such Mortgaged Property and any loss caused by or resulting from
(i) normal wear and tear, (ii) conversion or other dishonest act on the part of
the Trustee, the Servicer or any of their agents or employees, or (iii) errors
in design, faulty workmanship or faulty materials, unless the collapse of the
property or a part thereof ensues, or (y) any Realized Loss arising from or
related to the presence or suspected presence of hazardous wastes, or hazardous
substances on a Mortgaged Property unless such loss is covered by a hazard
policy or flood insurance policy required to be maintained in respect of such
Mortgaged Property, in any case, as reported by the Servicer.

         Special Hazard Loss Limit: As of the Cut-off Date, $16,424,954, which
amount shall be reduced from time to time to an amount equal on any Distribution
Date to the lesser of (a) the greatest of (i) 1% of the aggregate of the
Scheduled Principal Balances of the Mortgage Loans; (ii) twice the Scheduled
Principal Balance of the Mortgage Loan having the highest Scheduled Principal
Balance, and (iii) the aggregate Scheduled Principal Balances of the Mortgage
Loans secured by Mortgaged Properties located in the single postal zip code area
having the highest aggregate Scheduled Principal Balance of Mortgage Loans of
any such postal zip code area and (b) the Special Hazard Loss Limit as of the
Closing Date less the amount, if any, of Special Hazard Losses incurred with
respect to Mortgage Loans since the Closing Date.

         Specified Rating: Not applicable.

         Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.

         Subordinate Certificate: Any Class B Certificate.

         Subordinate Certificate Writedown Amount: As to any Distribution Date,
the amount by which (i) the sum of the Class Principal Amounts of all the
Certificates (after giving effect to the distribution of principal and the
application of Realized Losses in reduction of the Certificate Principal Amounts
of the Certificates on such Distribution Date) exceeds (ii) the aggregate
Scheduled Principal Balance of the Mortgage Loans for such Distribution Date.

         Subordinate Class Percentage: With respect to any Distribution Date and
any Class of Subordinate Certificates, the percentage obtained by dividing the
Class Principal Amount of such Class immediately prior to such Distribution Date
by the aggregate Certificate Principal Amount of all Subordinate Certificates
immediately prior to such Distribution Date.

         Subordinate Component Percentage: Not applicable.

         Subordinate Percentage: With respect to each Mortgage Pool and any
Distribution Date, the difference between 100% and the related Senior Percentage
for such Distribution Date.

                                       31
<PAGE>

         Subordinate Prepayment Percentage: With respect to each Mortgage Pool
and any Distribution Date, the difference between 100% and the related Senior
Prepayment Percentage for such Distribution Date.

         Subordinate Principal Distribution Amount: For each Certificate Group
and any Distribution Date, the sum of the following:

                  (i) the product of (1) the related Subordinate Percentage for
         such date and (2) the principal portion (multiplied by the applicable
         Non-APO Percentage) of each Scheduled Payment (without giving effect to
         any Debt Service Reduction occurring prior to the applicable Bankruptcy
         Coverage Termination Date) on each Mortgage Loan in the related
         Mortgage Pool due during the related Due Period;

                  (ii) the product of (a) the related Subordinate Prepayment
         Percentage for such date and (b) each of the following amounts
         (multiplied by the applicable Non-APO Percentage): (1) each Principal
         Prepayment on the Mortgage Loans in the related Mortgage Pool collected
         during the related Prepayment Period, (2) each other unscheduled
         collection, including Insurance Proceeds and Net Liquidation Proceeds
         (other than with respect to any Mortgage Loan in the related Mortgage
         Pool that was finally liquidated during the related Prepayment Period)
         representing or allocable to recoveries of principal received during
         the related Prepayment Period, and (3) the principal portion of all
         proceeds of the purchase of any Mortgage Loan in the related Mortgage
         Pool (or, in the case of a permitted substitution, amounts representing
         a principal adjustment) actually received by the Trustee during the
         related Prepayment Period;

                  (iii) with respect to unscheduled recoveries allocable to
         principal of any Mortgage Loan in the related Mortgage Pool that was
         finally liquidated during the related Prepayment Period, the related
         net Liquidation Proceeds allocable to principal (multiplied by the
         applicable Non-APO Percentage) less any related amount paid pursuant to
         subsection (iii) of the definition of Senior Principal Distribution
         Amount for the related Certificate Group; and

                  (iv) any amounts described in clauses (i) through (iii) for
         any previous Distribution Date that remain unpaid.

         TAC Amount: Not applicable.

         TAC Certificate: None.

         TAC Component: None.

         Tax Matters Person: The "tax matters person" as specified in the REMIC
Provisions.

         Termination Price: As defined in Section 7.01 hereof.

         Title Insurance Policy: A title insurance policy maintained with
respect to a Mortgage Loan.

                                       32
<PAGE>

         Transfer Agreement: As defined in the Mortgage Loan Sale Agreement.

         Transferor:  Not applicable.

         Trust Fund: The corpus of the trust created pursuant to this Agreement,
consisting of the Mortgage Loans (other than any Retained Interest), the
assignment of the Depositor's rights under the Mortgage Loan Sale Agreement,
such amounts as shall from time to time be held in the Certificate Account, any
Escrow Account, the Insurance Policies, any REO Property, and the other items
referred to in, and conveyed to the Trustee under, Section 2.01(a).

         Trust Rate: With respect to each Mortgage Loan, the sum of (i) the
related Designated Rate, (ii) the Servicing Fee Rate, (iii) the Trustee Fee Rate
and (iv) the premium rate on any lender-provided mortgage insurance.

         Trustee: U.S. Bank National Association, not in its individual capacity
but solely as Trustee, or any successor in interest, or if any successor trustee
or any co-trustee shall be appointed as herein provided, then such successor
trustee and such co-trustee, as the case may be.

         Trustee Fee: With respect to any Distribution Date, an amount equal to
the product of (a) one-twelfth the Trustee Fee Rate and (b) the aggregate
Scheduled Principal Balance of the Mortgage Loans as of the first day of the
related Due Period.

         Trustee Fee Rate: With respect to each Mortgage Loan with a Mortgage
Rate greater than 0.00%, 0.006% per annum. With respect to each Mortgage Loan
with a Mortgage Rate of 0.00%, 0.00% per annum.

         UCC: The Uniform Commercial Code as adopted in the State of New York.

         Undercollateralization Distribution: As defined in Section 5.02(f)(2).

         Undercollateralized Group: With respect to any Distribution Date, the
Non-APO Senior Certificates of any Certificate Group as to which the aggregate
Certificate Principal Amount thereof, after giving effect to distributions
pursuant to Sections 5.02(a) and (b) on such date is greater than the Non-APO
Pool Balance of the related Mortgage Pool for such Distribution Date.

         Underwriter's Exemption: Prohibited Transaction Exemption 2000-58, 65
Fed. Reg. 67765 (2000), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.

         Voting Interests: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement
until the Class Notional Amount of each Class of Notional Certificates has been
reduced to zero, 95% of all Voting Interests shall be allocated to the
Certificates other than the Notional Certificates and 5% of all Voting Interests
shall be allocated to the Notional Certificates. After the Class Notional Amount
of each Class of Notional Certificates has been reduced to zero, 100% of all
Voting Interests shall be allocated to the remaining Classes of Certificates.
Voting Interests allocated to the Notional Certificates shall be allocated among
the

                                       33
<PAGE>

Classes of such Certificates (and among the Certificates of each such Class)
in proportion to their Class Notional Amounts (or Notional Amounts). Voting
Interests shall be allocated among the other Classes of Certificates (and among
the Certificates of each such Class) in proportion to their Class Principal
Amounts (or Certificate Principal Amounts).

         Section 1.02. Calculations Respecting Mortgage Loans. Calculations
required to be made pursuant to this Agreement with respect to any Mortgage Loan
in the Trust Fund shall be made based upon current information as to the terms
of the Mortgage Loans and reports of payments received from the Mortgagor on
such Mortgage Loans and payments to be made to the Trustee as supplied to the
Trustee by the Servicer. The Trustee shall not be required to recompute, verify
or recalculate the information supplied to it by the Servicer.

                                   ARTICLE II

                              DECLARATION OF TRUST;
                            ISSUANCE OF CERTIFICATES

         Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans.

                   (a) Concurrently with the execution and delivery of this
Agreement, the Depositor does hereby transfer, assign, set over, deposit with
and otherwise convey to the Trustee, without recourse, subject to Sections 2.02,
2.04, 2.05 and 2.06, in trust, all the right, title and interest of the
Depositor in and to the Mortgage Loans. Such conveyance includes, without
limitation, the right to all distributions of principal and interest received on
or with respect to the Mortgage Loans on and after the Cut-off Date (other than
(i) any amounts representing Retained Interest and (ii) payments of principal
and interest due on or before such date) and all such payments due after such
date but received prior to such date and intended by the related Mortgagors to
be applied after such date, together with all of the Depositor's right, title
and interest in and to the Certificate Account, any Escrow Account established
pursuant to Section 9.06 hereof and all amounts from time to time credited to
and the proceeds of any such Escrow Account, any REO Property and the proceeds
thereof, the Depositor's rights under any Insurance Policies related to the
Mortgage Loans, and the Depositor's security interest in any collateral pledged
to secure the Mortgage Loans, including the Mortgaged Properties and any
Additional Collateral, and any proceeds of the foregoing, to have and to hold,
in trust; and the Trustee declares that, subject to the review provided for in
Section 2.02, it has received and shall hold the Trust Fund, as trustee, in
trust, for the benefit and use of the Holders of the Certificates and for the
purposes and subject to the terms and conditions set forth in this Agreement,
and, concurrently with such receipt, has caused to be executed, authenticated
and delivered to or upon the order of the Depositor, in exchange for the Trust
Fund, Certificates in the authorized denominations evidencing the entire
ownership of the Trust Fund.

         Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest under
the Mortgage Loan Sale Agreement (other than any right to receive Retained
Interest) including all rights of the Seller under the Servicing Agreement to
the extent assigned under the Mortgage Loan Sale Agreement. The Trustee hereby
accepts such assignment, and shall be entitled to exercise all rights of the
Depositor under the Mortgage Loan Sale Agreement as if, for such purpose, it
were the

                                       34
<PAGE>

Depositor. The foregoing sale, transfer, assignment, set-over, deposit and
conveyance does not and is not intended to result in creation or assumption by
the Trustee of any obligation of the Depositor, the Seller, or any other Person
in connection with the Mortgage Loans or any other agreement or instrument
relating thereto except as specifically set forth herein.

                   (b) In connection with such transfer and assignment, the
Depositor does hereby deliver to, and deposit with, or cause to be delivered to
and deposited with, the Trustee, and/or any custodian acting on the Trustee's
behalf, if applicable, the following documents or instruments with respect to
each Mortgage Loan (each a "Mortgage File") so transferred and assigned:

                  (i) with respect to each Mortgage Loan, the original Mortgage
         Note endorsed without recourse in proper form to the order of the
         Trustee, as shown in Exhibit B-4, or in blank (in each case, with all
         necessary intervening endorsements as applicable);

                  (ii) the original of any guarantee executed in connection with
         the Mortgage Note, assigned to the Trustee;

                  (iii) with respect to each Mortgage Loan other than a
         Cooperative Loan, the original recorded Mortgage with evidence of
         recording indicated thereon. If, in connection with any Mortgage Loan,
         the Depositor cannot deliver the Mortgage with evidence of recording
         thereon on or prior to the Closing Date because of a delay caused by
         the public recording office where such Mortgage has been delivered for
         recordation or because such Mortgage has been lost, the Depositor shall
         deliver or cause to be delivered to the Trustee (or its custodian), in
         the case of a delay due to recording, a true copy of such Mortgage,
         pending delivery of the original thereof, together with an Officer's
         Certificate of the Depositor certifying that the copy of such Mortgage
         delivered to the Trustee (or its custodian) is a true copy and that the
         original of such Mortgage has been forwarded to the public recording
         office, or, in the case of a Mortgage that has been lost, a copy
         thereof (certified as provided for under the laws of the appropriate
         jurisdiction) and a written Opinion of Counsel acceptable to the
         Trustee and the Depositor that an original recorded Mortgage is not
         required to enforce the Trustee's interest in the Mortgage Loan;

                  (iv) the original of each assumption, modification or
         substitution agreement, if any, relating to the Mortgage Loans, or, as
         to any assumption, modification or substitution agreement which cannot
         be delivered on or prior to the Closing Date because of a delay caused
         by the public recording office where such assumption, modification or
         substitution agreement has been delivered for recordation, a photocopy
         of such assumption, modification or substitution agreement, pending
         delivery of the original thereof, together with an Officer's
         Certificate of the Depositor certifying that the copy of such
         assumption, modification or substitution agreement delivered to the
         Trustee (or its custodian) is a true copy and that the original of such
         agreement has been forwarded to the public recording office;

                                       35
<PAGE>

                  (v) with respect to each Non-MERS Mortgage Loan other than a
         Cooperative Loan, the original Assignment of Mortgage for each Mortgage
         Loan;

                  (vi) if applicable, such original intervening assignments of
         the Mortgage, notice of transfer or equivalent instrument (each, an
         "Intervening Assignment"), as may be necessary to show a complete chain
         of assignment from the originator, or, in the case of an Intervening
         Assignment that has been lost, a written Opinion of Counsel acceptable
         to the Trustee that such original Intervening Assignment is not
         required to enforce the Trustee's interest in the Mortgage Loans;

                  (vii) the original Primary Mortgage Insurance Policy or
         certificate, if private mortgage guaranty insurance is required;

                  (viii) with respect to each Mortgage Loan other than a
         Cooperative Loan, the original mortgagee title insurance policy or
         attorney's opinion of title and abstract of title;

                  (ix) the original of any security agreement, chattel mortgage
         or equivalent executed in connection with the Mortgage or as to any
         security agreement, chattel mortgage or their equivalent that cannot be
         delivered on or prior to the Closing Date because of a delay caused by
         the public recording office where such document has been delivered for
         recordation, a photocopy of such document, pending delivery of the
         original thereof, together with an Officer's Certificate of the
         Depositor certifying that the copy of such security agreement, chattel
         mortgage or their equivalent delivered to the Trustee (or its
         custodian) is a true copy and that the original of such document has
         been forwarded to the public recording office;

                  (x) with respect to any Cooperative Loan, the Cooperative Loan
         Documents;

                  (xi) in connection with any pledge of Additional Collateral,
         the original additional collateral pledge and security agreement
         executed in connection therewith, assigned to the Trustee; and

                  (xii) any applicable manufactured housing sales contract or
         installment loan agreement.

         The parties hereto acknowledge and agree that the form of endorsement
attached hereto as Exhibit B-4 is intended to effect the transfer to the
Trustee, for the benefit of the Certificateholders, of the Mortgage Notes and
the Mortgages.

         (c) (i) Assignments of Mortgage with respect to each Non-MERS Mortgage
Loan other than a Cooperative Loan shall be recorded; provided, however, that
such Assignments need not be recorded if, in the Opinion of Counsel (which must
be from Independent counsel) (which Opinion of Counsel may be in the form of a
memorandum of law) acceptable to the Trustee and the Rating Agencies, recording
in such states is not required to protect the Trustee's interest in the related
Non-MERS Mortgage Loans. Subject to the preceding sentence, as soon as
practicable after the Closing Date (but in no event more than 3 months
thereafter except to the

                                       36
<PAGE>

extent delays are caused by the applicable recording office), the Trustee, at
the expense of the Depositor and with the cooperation of the Servicer, shall
cause to be properly recorded by the Servicer in each public recording office
where the related Mortgages are recorded each Assignment of Mortgage referred to
in subsection (b)(v) above with respect to a Non-MERS Mortgage Loan. With
respect to each Cooperative Loan, the Trustee, at the expense of the Depositor
and with the cooperation of the Servicer, shall cause the Servicer to take such
actions as are necessary under applicable law, in accordance with advice of
counsel, in order to perfect the interest of the Trustee in the related
Mortgaged Property.

                  (ii) With respect to each MERS Mortgage Loan, the Trustee, at
the expense of the Depositor and at the direction and with the cooperation of
the Servicer, shall cause to be taken such actions as are necessary to cause the
Trustee to be clearly identified as the owner of each such Mortgage Loan on the
records of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS.

                   (d) In instances where a Title Insurance Policy is required
to be delivered to the Trustee, or to the applicable Custodian on behalf of the
Trustee, under clause (b)(viii) above and is not so delivered, the Depositor
will provide a copy of such Title Insurance Policy to the Trustee, or to the
applicable Custodian on behalf of the Trustee, as promptly as practicable after
the execution and delivery hereof, but in any case within 180 days of the
Closing Date.

                   (e) For Mortgage Loans (if any) that 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, herewith delivers to the Trustee, or to
the applicable Custodian on behalf of the Trustee, an Officer's Certificate
which shall include a statement to the effect that all amounts received in
connection with such prepayment that are required to be deposited in the
Certificate Account pursuant to Section 4.04 have been so deposited. All
original documents that are not delivered to the Trustee or the applicable
Custodian on behalf of the Trustee shall be held by the Servicer in trust for
the benefit of the Trustee and the Certificateholders.

         Section 2.02. Acceptance of Trust Fund by Trustee: Review of
Documentation for Trust Fund.

                   (a) The Trustee, by execution and delivery hereof,
acknowledges receipt by the Trustee or by the applicable Custodian on behalf of
the Trustee of the Mortgage Files pertaining to the Mortgage Loans listed on the
Mortgage Loan Schedule, subject to review thereof by the Trustee, or by the
applicable Custodian on behalf of the Trustee, under this Section 2.02. The
Trustee, or the applicable Custodian on behalf of the Trustee, will execute and
deliver to the Trustee, the Depositor and the Servicer on the Closing Date an
Initial Certification in the form annexed hereto as Exhibit B-1 (or in the form
annexed to the applicable Custodial Agreement as Exhibit B-1, as applicable).

                   (b) Within 45 days after the Closing Date, the applicable
Custodian will, on behalf of the Trustee and for the benefit of Holders of the
Certificates, review each Mortgage File to ascertain that all required documents
set forth in Section 2.01 have been received and appear on their face to contain
the requisite signatures by or on behalf of the respective parties thereto, and
shall deliver to the Trustee and the Depositor an Interim Certification in the
form

                                       37
<PAGE>

annexed hereto as Exhibit B-2 (or in the form annexed to the applicable
Custodial Agreement as Exhibit B-2, as applicable) to the effect that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan prepaid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), (i) all of the applicable
documents specified in Section 2.01(b) are in its possession and (ii) such
documents have been reviewed by it and appear to relate to such Mortgage Loan.
The Trustee, or the applicable Custodian on behalf of the Trustee, shall make
sure that the documents are executed and endorsed, but shall be under no duty or
obligation to inspect, review or examine any such documents, instruments,
certificates or other papers to determine that the same are valid, binding,
legally effective, properly endorsed, genuine, enforceable or appropriate for
the represented purpose or that they have actually been recorded or are in
recordable form or that they are other than what they purport to be on their
face. Neither the Trustee nor any Custodian shall have any responsibility for
verifying the genuineness or the legal effectiveness of or authority for any
signatures of or on behalf of any party or endorser.

                   (c) If in the course of the review described in paragraph (b)
above the Trustee or the applicable Custodian discovers any document or
documents constituting a part of a Mortgage File that is missing, does not
appear regular on its face (i.e., is mutilated, damaged, defaced, torn or
otherwise physically altered) or appears to be unrelated to the Mortgage Loans
identified in the Mortgage Loan Schedule (each, a "Material Defect"), the
Trustee, or the applicable Custodian on behalf of the Trustee, shall promptly
identify the Mortgage Loan to which such Material Defect relates in the Interim
Certificate delivered to the Depositor and to the Trustee. Within 90 days of its
receipt of such notice, the Depositor shall be required to cure such Material
Defect (and, in such event, the Depositor shall provide the Trustee with an
Officer's Certificate confirming that such cure has been effected). If the
Depositor does not so cure such Material Defect, it shall, if a loss has been
incurred with respect to such Mortgage Loan that would, if such Mortgage Loan
were not purchased from the Trust Fund, constitute a Realized Loss, and such
loss is attributable to the failure of the Depositor to cure such Material
Defect, repurchase the related Mortgage Loan from the Trust Fund at the Purchase
Price. A loss shall be deemed to be attributable to the failure of the Depositor
to cure a Material Defect if, as determined by the Depositor, upon mutual
agreement with the Trustee acting in good faith, absent such Material Defect,
such loss would not have been incurred. Within the two year period following the
Closing Date, the Depositor may, in lieu of repurchasing a Mortgage Loan
pursuant to this Section 2.02, substitute for such Mortgage Loan a Qualifying
Substitute Mortgage Loan subject to the provisions of Section 2.05. The failure
of the Trustee or the applicable Custodian to give the notice contemplated
herein within 45 days after the Closing Date shall not affect or relieve the
Depositor of its obligation to repurchase any Mortgage Loan pursuant to this
Section 2.02 or any other Section of this Agreement requiring the repurchase of
Mortgage Loans from the Trust Fund.

                   (d) Within 180 days following the Closing Date, the Trustee,
or the applicable Custodian, shall deliver to the Trustee and the Depositor a
Final Certification substantially in the form annexed hereto as Exhibit B-3 (or
in the form annexed to the applicable Custodial Agreement as Exhibit B-3, as
applicable) evidencing the completeness of the Mortgage Files in its possession
or control, with any exceptions noted thereto.

                                       38
<PAGE>

                   (e) Nothing in this Agreement shall be construed to
constitute an assumption by the Trust Fund, the Trustee or the
Certificateholders of any unsatisfied duty, claim or other liability on any
Mortgage Loan or to any Mortgagor.

                   (f) Each of the parties hereto acknowledges that the
Custodian shall perform the applicable review of the Mortgage Loans and deliver
the respective certifications thereof as provided in this Section 2.02.

         Section 2.03. Representations and Warranties of the Depositor.

                   (a) The Depositor hereby represents and warrants to the
Trustee, for the benefit of Certificateholders, as of the Closing Date or such
other date as is specified, that:

                  (i) the Depositor is a corporation duly organized, validly
         existing and in good standing under the laws governing its creation and
         existence and has full corporate power and authority to own its
         property, to carry on its business as presently conducted, to enter
         into and perform its obligations under this Agreement, and to create
         the trust pursuant hereto;

                  (ii) 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; neither the execution and delivery of
         this Agreement, nor the consummation of the transactions herein
         contemplated, nor compliance with the provisions hereof, will conflict
         with or result in a breach of, or constitute a default under, any of
         the provisions of any law, governmental rule, regulation, judgment,
         decree or order binding on the Depositor or its properties or the
         certificate of incorporation or bylaws of the Depositor;

                  (iii) 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 such as has been obtained, given, effected or taken prior to the
         date hereof;

                  (iv) this Agreement has been duly executed and delivered by
         the Depositor and, assuming due authorization, execution and delivery
         by the Trustee, constitutes a valid and binding obligation of the
         Depositor enforceable against it in accordance with its terms except as
         such enforceability may be subject to (A) applicable bankruptcy and
         insolvency laws and other similar laws affecting the enforcement of the
         rights of creditors generally and (B) general principles of equity
         regardless of whether such enforcement is considered in a proceeding in
         equity or at law;

                  (v) there are no actions, suits or proceedings pending or, to
         the knowledge of the Depositor, threatened or likely to be asserted
         against or affecting the Depositor, before or by any court,
         administrative agency, arbitrator or governmental body (A) with respect
         to any of the transactions contemplated by this Agreement or (B) 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

                                       39
<PAGE>

         affect it or its business, assets, operations or condition, financial
         or otherwise, or adversely affect its ability to perform its
         obligations under this Agreement; and

                  (vi) immediately prior to the transfer and assignment of the
         Mortgage Loans to the Trustee, the Depositor was the sole owner of
         record and holder of each Mortgage Loan, and the Depositor had good and
         marketable title thereto, and had full right to transfer and sell each
         Mortgage Loan to the Trustee free and clear, subject only to (1) liens
         of current real property taxes and assessments not yet due and payable
         and, if the related Mortgaged Property is a condominium unit, any lien
         for common charges permitted by statute, (2) covenants, conditions and
         restrictions, rights of way, easements and other matters of public
         record as of the date of recording of such Mortgage acceptable to
         mortgage lending institutions in the area in which the related
         Mortgaged Property is located and specifically referred to in the
         lender's Title Insurance Policy or attorney's opinion of title and
         abstract of title delivered to the originator of such Mortgage Loan,
         and (3) such other matters to which like properties are commonly
         subject which do not, individually or in the aggregate, materially
         interfere with the benefits of the security intended to be provided by
         the Mortgage, of any encumbrance, equity, participation interest, lien,
         pledge, charge, claim or security interest, and had full right and
         authority, subject to no interest or participation of, or agreement
         with, any other party, to sell and assign each Mortgage Loan pursuant
         to this Agreement.

         Section 2.04. Discovery of Breach. It is understood and agreed that the
representations and warranties (i) set forth in Section 2.03 and (ii) of Lehman
Capital set forth in the Mortgage Loan Sale Agreement and assigned to the
Trustee by the Depositor hereunder shall each survive delivery of the Mortgage
Files and the Assignment of Mortgage of each Mortgage Loan to the Trustee and
shall continue throughout the term of this Agreement. Upon discovery by either
the Depositor or the Trustee of a breach of any of such representations and
warranties that adversely and materially affects the value of the related
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties. Within 90 days of the discovery of a breach of any
representation or warranty given to the Trustee by the Depositor or Lehman
Capital and assigned to the Trustee, the Depositor or Lehman Capital, as
applicable, shall either (a) cure such breach in all material respects, (b)
repurchase such Mortgage Loan or any property acquired in respect thereof from
the Trustee at the Purchase Price or (c) within the two year period following
the Closing Date, substitute a Qualifying Substitute Mortgage Loan for the
affected Mortgage Loan.

         Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans.

                   (a) With respect to any Mortgage Loan repurchased by the
Depositor pursuant to this Agreement, or by Lehman Capital pursuant to the
Mortgage Loan Sale Agreement, the principal portion of the funds received by the
Trustee in respect of such repurchase of a Mortgage Loan will be considered a
Principal Prepayment and shall be deposited in the Certificate Account. The
Trustee, upon receipt of the full amount of the Purchase Price for a Deleted
Mortgage Loan, or upon receipt of the Mortgage File for a Qualifying Substitute
Mortgage Loan substituted for a Deleted Mortgage Loan (and any applicable
Substitution Amount), shall release or cause to be released and reassign to the
Depositor or Lehman Capital, as applicable, the related Mortgage File for the
Deleted Mortgage Loan and shall execute and

                                       40
<PAGE>

deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as shall be necessary to vest in such
party or its designee or assignee title to any Deleted Mortgage Loan released
pursuant hereto, free and clear of all security interests, liens and other
encumbrances created by this Agreement, which instruments shall be prepared by
the Trustee (or its custodian), and the Trustee shall have no further
responsibility with respect to the Mortgage File relating to such Deleted
Mortgage Loan. The Seller indemnifies and holds the Trust Fund, the Trustee, the
Depositor and each Certificateholder harmless against any and all taxes, claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trust Fund, the
Trustee, the Depositor and any Certificateholder may sustain in connection with
any actions of the Seller relating to a repurchase of a Mortgage Loan other than
in compliance with the terms of this Section 2.05 and the Mortgage Loan Sale
Agreement, to the extent that any such action causes (i) any federal or state
tax to be imposed on the Trust Fund, including without limitation, any federal
tax imposed on "prohibited transactions" under Section 860F(a)(l) of the Code or
on "contributions after the startup date" under Section 860G(d)(l) of the Code,
or (ii) the REMIC to fail to qualify as a REMIC at any time that any Certificate
is outstanding.

                   (b) With respect to each Qualifying Substitute Mortgage Loan
to be delivered to the Trustee (or its custodian) pursuant to the terms of this
Article II in exchange for a Deleted Mortgage Loan: (i) the Depositor or Lehman
Capital, as applicable, must deliver to the Trustee (or its custodian) the
Mortgage File for the Qualifying Substitute Mortgage Loan containing the
documents set forth in Section 2.01(b) along with a written certification
certifying as to the delivery of such Mortgage File and containing the granting
language set forth in Section 2.01(a); and (ii) the Depositor will be deemed to
have made, with respect to such Qualified Substitute Mortgage Loan, each of the
representations and warranties made by it with respect to the related Deleted
Mortgage Loan. As soon as practicable after the delivery of any Qualifying
Substitute Mortgage Loan hereunder, the Trustee, at the expense of the Depositor
and at the direction and with the cooperation of the Servicer, shall (i) with
respect to a Qualifying Substitute Mortgage Loan that is a Non-MERS Mortgage
Loan, cause the Assignment of Mortgage to be recorded by such Servicer if
required pursuant to Section 2.01(c)(i), or (ii) with respect to a Qualifying
Substitute Mortgage Loan that is a MERS Mortgage Loan, cause to be taken such
actions as are necessary to cause the Trustee to be clearly identified as the
owner of each such Mortgage Loan on the records of MERS if required pursuant to
Section 2.01(c)(ii).

                   (c) Notwithstanding any other provision of this Agreement,
the right to substitute Mortgage Loans pursuant to this Article II shall be
subject to the additional limitations that no substitution of a Qualifying
Substitute Mortgage Loan for a Deleted Mortgage Loan shall be made unless the
Trustee has received an Opinion of Counsel (at the expense of the party seeking
to make the substitution) that, under current law, such substitution will not
(A) affect adversely the status of the REMIC established hereunder as a REMIC,
or of the related "regular interests" as "regular interests" in such REMIC, or
(B) cause such REMIC to engage in a "prohibited transaction" or prohibited
contribution pursuant to the REMIC Provisions.

         Section 2.06. Grant Clause.

                   (a) It is intended that the conveyance of the Depositor's
right, title and interest in and to property constituting the Trust Fund
pursuant to this Agreement shall constitute, and shall

                                       41
<PAGE>

be construed as, a sale of such property and not a grant of a security interest
to secure a loan. However, if such conveyance is deemed to be in respect of a
loan, it is intended that: (1) the rights and obligations of the parties shall
be established pursuant to the terms of this Agreement; (2) the Depositor hereby
grants to the Trustee for the benefit of the Holders of the Certificates a first
priority security interest in all of the Depositor's right, title and interest
in, to and under, whether now owned or hereafter acquired, the Trust Fund and
all proceeds of any and all property constituting the Trust Fund to secure
payment of the Certificates; and (3) this Agreement shall constitute a security
agreement under applicable law. If such conveyance is deemed to be in respect of
a loan and the Trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person holding any Certificate, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person, and
all proceeds shall be distributed as herein provided.

                   (b) The Trustee shall, to the extent consistent with this
Agreement, take such reasonable actions, as set forth in an Opinion of Counsel
delivered to the Trustee, as may be necessary to ensure that, if this Agreement
were deemed to create a security interest in the Mortgage Loans and the other
property described above, such security interest would be a perfected security
interest of first priority under applicable law and will be maintained as such
throughout the term of this Agreement. The Depositor will, at its own expense,
make all initial filings on or about the Closing Date and shall forward a copy
of such filing or filings to the Trustee. Without limiting the generality of the
foregoing, the Depositor shall prepare or cause the Servicer to prepare and
forward for filing, or shall cause to be forwarded for filing, at the expense of
the Depositor, all filings necessary to maintain the effectiveness of any
original filings necessary under the relevant UCC to perfect the Trustee's
security interest in or lien on the Mortgage Loans, including without limitation
(x) continuation statements, and (y) such other statements as may be occasioned
by (1) any change of name of the Seller, the Depositor or the Trustee, (2) any
change of location of the place of business or the chief executive office of the
Seller or the Depositor, (3) any transfer of any interest of the Seller or the
Depositor in any Mortgage Loan or (4) any change under the relevant UCC or other
applicable laws.

         Section 2.07. Optional Purchase of Mortgage Loans. On any date on or
after the Credit Support Depletion Date, Fannie Mae shall have the right, but
not the obligation, to purchase any Pool 1 Mortgage Loan that is 90 days or more
delinquent in payment for a purchase price equal to the sum of (a) 100% of the
unpaid principal balance of such Mortgage Loan and (b) accrued interest thereon
at the Mortgage Rate, from the date as to which interest was last paid to (but
not including) the Due Date immediately preceding the related Distribution Date;
provided, however, that in the event that Fannie Mae exercises such option, it
shall be obligated to purchase the Mortgage Loans in the inverse order of their
delinquency, beginning with the Mortgage Loan that is the greatest number of
days (in excess of 90 days) delinquent in payment.

         With respect to any Mortgage Loan so purchased, the principal portion
of the funds received by the Trustee in respect of such purchase of a Mortgage
Loan will be considered a Principal Prepayment and shall be deposited in the
Certificate Account. The Trustee, upon receipt of the full amount of the
purchase price for such Mortgage Loan, shall release or cause to be released and
assign to Fannie Mae the related Mortgage File for the purchased Mortgage Loan
and shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, representation or warranty, as shall be necessary to
vest in such party or its designee or

                                       42
<PAGE>

assignee title to any Mortgage Loan purchased pursuant to this Section, free and
clear of all security interests, liens and other encumbrances created by this
Agreement, which instruments shall be prepared by the Trustee (or its
custodian), and the Trustee shall have no further responsibility with respect to
the Mortgage File relating to such Mortgage Loan.

                                  ARTICLE III

                                THE CERTIFICATES

         Section 3.01. The Certificates.

                   (a) The Certificates shall be issuable in registered form
only and shall be securities governed by Article 8 of the New York Uniform
Commercial Code. The Book-Entry Certificates will be evidenced by one or more
certificates, beneficial ownership of which will be held in the dollar
denominations in Certificate Principal Amount or Notional Principal Amount, as
applicable, or in the Percentage Interests, specified herein. Each Class of
Book-Entry Certificates shall be issued in the minimum denominations in
Certificate Principal Amount (or Notional Amount) or Percentage Interest
specified in the Preliminary Statement hereto and in integral multiples of $1 or
5% (in the case of Certificates issued in Percentage Interests) in excess
thereof. Each Class of Non-Book Entry Certificates other than the Residual
Certificate shall be issued in definitive, fully registered form in the minimum
denominations in Certificate Principal Amount (or Notional Amount) specified in
the Preliminary Statement hereto and in integral multiples of $1 in excess
thereof. The Residual Certificate shall be issued as a single Certificate and
maintained in definitive, fully registered form in a minimum denomination equal
to 100% of the Percentage Interest of such Class. The Certificates may be issued
in the form of typewritten certificates. One Certificate of each Class of
Certificates other than any Class of Residual Certificates may be issued in any
denomination in excess of the minimum denomination.

                   (b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Each Certificate
shall, on original issue, be authenticated by the Trustee upon the order of the
Depositor upon receipt by the Trustee of the Mortgage Files described in Section
2.01. No Certificate shall be entitled to any benefit under this Agreement, or
be valid for any purpose, unless there appears on such Certificate a certificate
of authentication substantially in the form provided for herein, executed by an
authorized officer of the Trustee or the Authenticating Agent, if any, by manual
signature, and such certification 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. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates executed
by the Depositor to the Trustee or the Authenticating Agent for authentication
and the Trustee or the Authenticating Agent shall authenticate and deliver such
Certificates as in this Agreement provided and not otherwise.

                   (c) The Class B4, Class B5 or Class B6 Certificates offered
and sold in reliance on the exemption from registration under Rule 144A shall be
issued initially in the form of one or more permanent global Certificates in
definitive, fully registered form without interest coupons with the applicable
legends set forth in Exhibit A added to the forms of such Certificates

                                       43
<PAGE>

(each, a "Restricted Global Security"), which shall be deposited on behalf of
the subscribers for such Certificates represented thereby with the Trustee, as
custodian for DTC and registered in the name of a nominee of DTC, duly executed
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amounts of the Restricted Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee or DTC
or its nominee, as the case may be, as hereinafter provided.

         The Class B4, Class B5 or Class B6 Certificates sold in offshore
transactions in reliance on Regulation S shall be issued initially in the form
of one or more permanent global Certificates in definitive, fully registered
form without interest coupons with the applicable legends set forth in Exhibit A
hereto added to the forms of such Certificates (each, a "Regulation S Global
Security"), which shall be deposited on behalf of the subscribers for such
Certificates represented thereby with the Trustee, as custodian for DTC and
registered in the name of a nominee of DTC, duly executed and authenticated by
the Trustee as hereinafter provided. The aggregate principal amounts of the
Regulation S Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee or DTC or its nominee, as the
case may be, as hereinafter provided.

         The Class B4, Class B5, or Class B6 Certificates sold to an "accredited
investor" under Rule 501(a)(1), (2), (3) or (7) under the Act shall be issued
initially in the form of one or more Definitive Certificates.

         Section 3.02. Registration.The Trustee is hereby appointed, and hereby
accepts its appointment as, Certificate Registrar in respect of the Certificates
and shall maintain books for the registration and for the transfer of
Certificates (the "Certificate Register"). The Trustee may appoint a bank or
trust company to act as Certificate Registrar. A registration book shall be
maintained for the Certificates collectively. The Certificate Registrar may
resign or be discharged or removed and a new successor may be appointed in
accordance with the procedures and requirements set forth in Sections 6.06 and
6.07 hereof with respect to the resignation, discharge or removal of the Trustee
and the appointment of a successor Trustee. The Certificate Registrar may
appoint, by a written instrument delivered to the Holders, any bank or trust
company to act as co-registrar under such conditions as the Certificate
Registrar may prescribe; provided, however, that the Certificate Registrar shall
not be relieved of any of its duties or responsibilities hereunder by reason of
such appointment.

         Section 3.03. Transfer and Exchange of Certificates.

                   (a) A Certificate (other than Book-Entry Certificates which
shall be subject to Section 3.09 hereof) may be transferred by the Holder
thereof only upon presentation and surrender of such Certificate at the office
of the Certificate Registrar duly endorsed or accompanied by an assignment duly
executed by such Holder or his duly authorized attorney in such form as shall be
satisfactory to the Certificate Registrar. Upon the transfer of any Certificate
in accordance with the preceding sentence, the Trustee shall execute, and the
Trustee or any Authenticating Agent shall authenticate and deliver to the
transferee, one or more new Certificates of the same Class and evidencing, in
the aggregate, the same aggregate Certificate Principal Amount as the
Certificate being transferred. No service charge shall be made to a
Certificateholder for any registration of transfer of Certificates, but the
Certificate Registrar may

                                       44
<PAGE>

require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any registration of transfer of
Certificates.

                   (b) A Certificate may be exchanged by the Holder thereof for
any number of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same Certificate Principal Amount as the
Certificate surrendered, upon surrender of the Certificate to be exchanged at
the office of the Certificate Registrar duly endorsed or accompanied by a
written instrument of transfer duly executed by such Holder or his duly
authorized attorney in such form as is satisfactory to the Certificate
Registrar. Certificates delivered upon any such exchange will evidence the same
obligations, and will be entitled to the same rights and privileges, as the
Certificates surrendered. No service charge shall be made to a Certificateholder
for any exchange of Certificates, 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 exchange of Certificates. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute, and the
Trustee or the Authenticating Agent shall authenticate, date and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive.

                   (c) By acceptance of a Restricted Certificate or a Regulation
S Global Security, whether upon original issuance or subsequent transfer, each
Holder of such a Certificate acknowledges the restrictions on the transfer of
such Certificate set forth thereon and agrees that it will transfer such a
Certificate only as provided herein. In addition, each Holder of a Regulation S
Global Security shall be deemed to have represented and warranted to the
Trustee, the Certificate Registrar and any of their respective successors that:
(i) such Person is not a U.S. person within the meaning of Regulation S and was,
at the time the buy order was originated, outside the United States and (ii)
such Person understands that such Certificates have not been registered under
the Securities Act of 1933, as amended (the "Act"), and that (x) until the
expiration of the 40-day distribution compliance period (within the meaning of
Regulation S), no offer, sale, pledge or other transfer of such Certificates or
any interest therein shall be made in the United States or to or for the account
or benefit of a U.S. person (each as defined in Regulation S), (y) if in the
future it decides to offer, resell, pledge or otherwise transfer such
Certificates, such Certificates may be offered, resold, pledged or otherwise
transferred only (A) to a person which the seller reasonably believes is a
"qualified institutional buyer" (a "QIB") as defined in Rule 144A under the Act,
that is purchasing such Certificates for its own account or for the account of a
qualified institutional buyer to which notice is given that the transfer is
being made in reliance on Rule 144A or (B) in an offshore transaction (as
defined in Regulation S) in compliance with the provisions of Regulation S, in
each case in compliance with the requirements of this Agreement; and it will
notify such transferee of the transfer restrictions specified in this Section.

         The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that takes
delivery in the form of a Definitive Certificate:

                  (i) The Certificate Registrar shall register the transfer of a
         Restricted Certificate if the requested transfer is (x) to the
         Depositor or the Placement Agent, an affiliate (as defined in Rule 405
         under the Act) of the Depositor or the Placement Agent

                                       45
<PAGE>

         or (y) being made to a QIB by a transferor that has provided the
         Trustee with a certificate in the form of Exhibit F hereto; and

                  (ii) The Certificate Registrar shall register the transfer of
         a Restricted Certificate if the requested transfer is being made to an
         "accredited investor" under Rule 501(a)(1), (2), (3) or (7) under the
         Act by a transferor who furnishes to the Trustee a letter of the
         transferee substantially in the form of Exhibit G hereto.

                   (d) No transfer of an ERISA-Restricted Certificate in the
form of a Definitive Certificate shall be made to any Person unless the Trustee
has received (A) a certificate substantially in the form of Exhibit H (or
Exhibit D-1 in the case of the Class R Certificate) hereto from such transferee
or (B) an Opinion of Counsel satisfactory to the Trustee and the Depositor to
the effect that the purchase and holding of such a Certificate will not
constitute or result in the assets of the Trust Fund being deemed to be "plan
assets" subject to the prohibited transactions provisions of ERISA or Section
4975 of the Code and will not subject the Trustee or the Depositor to any
obligation in addition to those undertaken in the Agreement; provided, however,
that the Trustee will not require such certificate or opinion in the event that,
as a result of a change of law or otherwise, counsel satisfactory to the Trustee
has rendered an opinion to the effect that the purchase and holding of an
ERISA-Restricted Certificate by a Plan or a Person that is purchasing or holding
such a Certificate with the assets of a Plan will not constitute or result in a
prohibited transaction under ERISA or Section 4975 of the Code. Each Transferee
of an ERISA-Restricted Certificate that is a Book-Entry Certificate shall be
deemed to have made the representations set forth in Exhibit H. The preparation
and delivery of the certificate and opinions referred to above shall not be an
expense of the Trust Fund, the Trustee or the Depositor. Notwithstanding the
foregoing, no opinion or certificate shall be required for the initial issuance
of the ERISA-Restricted Certificates. The Trustee shall have no obligation to
monitor transfers of Book-Entry Certificates that are ERISA-Restricted
Certificates and shall have no liability for transfers of such Certificates in
violation of the transfer restrictions.

         Notwithstanding anything to the contrary herein, any purported transfer
of an ERISA-Restricted Certificate to or on behalf of an employee benefit plan
subject to Section 406 ERISA or a plan subject to Section 4975 of the Code
without the delivery to the Trustee and the Master Servicer of an Opinion of
Counsel satisfactory to the Trustee and the Master Servicer as described above
shall be void and of no effect; provided that the restriction set forth in this
sentence shall not be applicable if there has been delivered to the Trustee and
the Master Servicer an Opinion of Counsel meeting the requirements of clause (B)
of the first sentence of this paragraph. The Trustee shall be under no liability
to any Person for any registration of transfer of any ERISA-Restricted
Certificate that is in fact not permitted by this Section 3.03(d) or for making
any payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the transfer was registered by the Trustee in accordance with the
foregoing requirements. The Trustee shall be entitled, but not obligated, to
recover from any Holder of any ERISA-Restricted Certificate that was in fact an
employee benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code or a Person acting on behalf of any such plan at the
time it became a Holder or, at such subsequent time as it became such a plan or
Person acting on behalf of such a plan, all payments made on such
ERISA-Restricted Certificate at and after either such time. Any

                                       46
<PAGE>

such payments so recovered by the Trustee shall be paid and delivered by the
Trustee to the last preceding Holder of such Certificate that is not such a plan
or Person acting on behalf of a plan.

                   (e) As a condition of the registration of transfer or
exchange of any Certificate, the Certificate Registrar may require the certified
taxpayer identification number of the owner of the Certificate and the payment
of a sum sufficient to cover any tax or other governmental charge imposed in
connection therewith; provided, however, that the Certificate Registrar shall
have no obligation to require such payment or to determine whether or not any
such tax or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of Certificate.

                   (f) Notwithstanding anything to the contrary contained
herein, no Residual Certificate may be owned, pledged or transferred, directly
or indirectly, by or to (i) a Disqualified Organization or (ii) an individual,
corporation or partnership or other person unless such person is (A) not a
Non-U.S. Person or (B) is a Non-U.S. Person that holds a Residual Certificate in
connection with the conduct of a trade or business within the United States and
has furnished the transferor and the Trustee with an effective Internal Revenue
Service Form 4224 or successor form at the time and in the manner required by
the Code (any such person who is not covered by clause (A) or (B) above is
referred to herein as a "Non-permitted Foreign Holder").

         Prior to and as a condition of the registration of any transfer, sale
or other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Trustee an affidavit in substantially the form attached hereto as
Exhibit D-1 representing and warranting, among other things, that such
transferee is neither a Disqualified Organization, an agent or nominee acting on
behalf of a Disqualified Organization, nor a Non-permitted Foreign Holder (any
such transferee, a "Permitted Transferee") and the proposed transferor shall
deliver to the Trustee an affidavit in substantially the form attached hereto as
Exhibit D-2. In addition, the Trustee may (but shall have no obligation to)
require, prior to and as a condition of any such transfer, the delivery by the
proposed transferee of an Opinion of Counsel, addressed to the Depositor and the
Trustee satisfactory in form and substance to the Depositor, that such proposed
transferee or, if the proposed transferee is an agent or nominee, the proposed
beneficial owner, is not a Disqualified Organization, agent or nominee thereof,
or Non-permitted Foreign Holder. Notwithstanding the registration in the
Certificate Register of any transfer, sale, or other disposition of a Residual
Certificate to a Disqualified Organization, an agent or nominee thereof, or
Non-permitted Foreign Holder, such registration shall be deemed to be of no
legal force or effect whatsoever and such Disqualified Organization, agent or
nominee thereof, or Non-permitted Foreign Holder shall not be deemed to be a
Certificateholder for any purpose hereunder, including, but not limited to, the
receipt of distributions on such Residual Certificate. The Trustee shall not be
under any liability to any person for any registration or transfer of a Residual
Certificate to a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder or for the maturity of any payments due on such
Residual Certificate to the Holder thereof or for taking any other action with
respect to such Holder under the provisions of the Agreement, so long as the
transfer was effected in accordance with this Section 3.03(f), unless the
Trustee shall have actual knowledge at the time of such transfer or the time of
such payment or other action that the transferee is a Disqualified Organization,
agent or nominee thereof, or Non-permitted Foreign Holder. The Trustee shall be
entitled to recover from any Holder of a Residual Certificate that was a
Disqualified Organization, agent or nominee thereof, or Non-permitted Foreign
Holder at

                                       47
<PAGE>

the time it became a Holder or any subsequent time it became a Disqualified
Organization, agent or nominee thereof, or Non-permitted Foreign Holder, all
payments made on such Residual Certificate at and after either such times (and
all costs and expenses, including but not limited to attorneys' fees, incurred
in connection therewith). Any payment (not including any such costs and
expenses) so recovered by the Trustee shall be paid and delivered to the last
preceding Holder of such Residual Certificate.

         If any purported transferee shall become a registered Holder of a
Residual Certificate in violation of the provisions of this Section 3.03(f),
then upon receipt of written notice to the Trustee that the registration of
transfer of such Residual Certificate was not in fact permitted by this Section
3.03(f), the last preceding Permitted Transferee shall be restored to all rights
as Holder thereof retroactive to the date of such registration of transfer of
such Residual Certificate. The Trustee shall be under no liability to any Person
for any registration of transfer of a Residual Certificate that is in fact not
permitted by this Section 3.03(f), for making any payment due on such
Certificate to the registered Holder thereof or for taking any other action with
respect to such Holder under the provisions of this Agreement so long as the
transfer was registered upon receipt of the affidavit described in the preceding
paragraph of this Section 3.03(f).

                   (g) Each Holder of a Residual Certificate, by such Holder's
acceptance thereof, shall be deemed for all purposes to have consented to the
provisions of this section.

                   (h) Notwithstanding any provision to the contrary herein, so
long as a Global Security representing either of the Class B4, Class B5 or Class
B6 Certificates remains outstanding and is held by or on behalf of DTC,
transfers of a Global Security representing any such Certificates, in whole or
in part, shall only be made in accordance with Section 3.01 and this Section
3.03(h).

                           (A) Subject to clauses (B) and (C) of this Section
         3.03(h), transfers of a Global Security representing either of the
         Class B4, Class B5 or Class B6 Certificates shall be limited to
         transfers of such Global Security, in whole or in part, to nominees of
         DTC or to a successor of DTC or such successor's nominee.

                           (B) Restricted Global Security to Regulation S Global
         Security. If a holder of a beneficial interest in a Restricted Global
         Security deposited with or on behalf of DTC wishes at any time to
         exchange its interest in such Restricted Global Security for an
         interest in a Regulation S Global Security, or to transfer its interest
         in such Restricted Global Security to a Person who wishes to take
         delivery thereof in the form of an interest in a Regulation S Global
         Security, such holder, provided such holder is not a U.S. person, may,
         subject to the rules and procedures of DTC, exchange or cause the
         exchange of such interest for an equivalent beneficial interest in the
         Regulation S Global Security. Upon receipt by the Trustee, as
         Certificate Registrar, of (I) instructions from DTC directing the
         Trustee, as Certificate Registrar, to be credited a beneficial interest
         in a Regulation S Global Security in an amount equal to the beneficial
         interest in such Restricted Global Security to be exchanged but not
         less than the minimum denomination applicable to such holder's
         Certificates held through a Regulation S Global Security, (II) a
         written order given in accordance with DTC's procedures containing
         information regarding the participant account of DTC and, in the case
         of a transfer

                                       48
<PAGE>

         pursuant to and in accordance with Regulation S, the Euroclear or
         Clearstream account to be credited with such increase and (III) a
         certificate in the form of Exhibit N-1 hereto given by the holder of
         such beneficial interest stating that the exchange or transfer of such
         interest has been made in compliance with the transfer restrictions
         applicable to the Global Securities, including that the holder is not a
         U.S. person, and pursuant to and in accordance with Regulation S, the
         Trustee, as Certificate Registrar, shall reduce the principal amount of
         the Restricted Global Security and increase the principal amount of the
         Regulation S Global Security by the aggregate principal amount of the
         beneficial interest in the Restricted Global Security to be exchanged,
         and shall instruct Euroclear or Clearstream, as applicable,
         concurrently with such reduction, to credit or cause to be credited to
         the account of the Person specified in such instructions a beneficial
         interest in the Regulation S Global Security equal to the reduction in
         the principal amount of the Restricted Global Security.

                           (C) Regulation S Global Security to Restricted Global
         Security. If a holder of a beneficial interest in a Regulation S Global
         Security deposited with or on behalf of DTC wishes at any time to
         transfer its interest in such Regulation S Global Security to a Person
         who wishes to take delivery thereof in the form of an interest in a
         Restricted Global Security, such holder may, subject to the rules and
         procedures DTC, exchange or cause the exchange of such interest for an
         equivalent beneficial interest in a Restricted Global Security. Upon
         receipt by the Trustee, as Certificate Registrar, of (I) instructions
         from DTC directing the Trustee, as Certificate Registrar, to cause to
         be credited a beneficial interest in a Restricted Global Security in an
         amount equal to the beneficial interest in such Regulation S Global
         Security to be exchanged but not less than the minimum denomination
         applicable to such holder's Certificates held through a Restricted
         Global Security, to be exchanged, such instructions to contain
         information regarding the participant account with DTC to be credited
         with such increase, and (II) a certificate in the form of Exhibit N-2
         hereto given by the holder of such beneficial interest and stating,
         among other things, that the Person transferring such interest in such
         Regulation S Global Security reasonably believes that the Person
         acquiring such interest in a Restricted Global Security is a QIB, is
         obtaining such beneficial interest in a transaction meeting the
         requirements of Rule 144A and in accordance with any applicable
         securities laws of any State of the United States or any other
         jurisdiction, then the Trustee, as Certificate Registrar, will reduce
         the principal amount of the Regulation S Global Security and increase
         the principal amount of the Restricted Global Security by the aggregate
         principal amount of the beneficial interest in the Regulation S Global
         Security to be transferred and the Trustee, as Certificate Registrar,
         shall instruct DTC, concurrently with such reduction, to credit or
         cause to be credited to the account of the Person specified in such
         instructions a beneficial interest in the Restricted Global Security
         equal to the reduction in the principal amount of the Regulation S
         Global Security.

                           (D) Other Exchanges. In the event that a Global
         Security is exchanged for Certificates in definitive registered form
         without interest coupons, pursuant to Section 3.09(c) hereof, such
         Certificates may be exchanged for one another only in accordance with
         such procedures as are substantially consistent with the provisions
         above (including certification requirements intended to insure that
         such

                                       49
<PAGE>

         transfers comply with Rule 144A, comply with Rule 501(a)(1), (2), (3)
         or (7) or are to non-U.S. persons in compliance with Regulation S under
         the Act, as the case may be), and as may be from time to time adopted
         by the Trustee.

                           (E) Restrictions on U.S. Transfers. Transfers of
         interests in the Regulation S Global Security to U.S. persons (as
         defined in Regulation S) shall be limited to transfers made pursuant to
         the provisions of Section 3.03(h)(C).

         Section 3.04. Cancellation of Certificates. Any Certificate surrendered
for registration of transfer or exchange shall be cancelled and retained in
accordance with normal retention policies with respect to cancelled certificates
maintained by the Trustee or the Certificate Registrar.

         Section 3.05. Replacement of Certificates. If (i) any Certificate is
mutilated and is surrendered to the Trustee or any Authenticating Agent or (ii)
the Trustee or any Authenticating Agent receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and there is delivered to the
Trustee or the Authenticating Agent such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Depositor and any Authenticating Agent that such destroyed, lost or
stolen Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Trustee or any Authenticating Agent shall 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 Certificate Principal
Amount. Upon the issuance of any new Certificate under this Section 3.05, the
Trustee and Authenticating Agent 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
or the Authenticating Agent) connected therewith. Any replacement Certificate
issued pursuant to this Section 3.05 shall constitute complete and indefeasible
evidence of ownership in the applicable Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.

         Section 3.06. Persons Deemed Owners. Subject to the provisions of
Section 3.09 with respect to Book-Entry Certificates, the Depositor and the
Trustee, the Certificate Registrar and any agent of any of them may treat the
Person in whose name any Certificate is registered upon the books of the
Certificate Registrar as the owner of such Certificate for the purpose of
receiving distributions pursuant to Sections 5.01 and 5.02 and for all other
purposes whatsoever, and neither the Depositor nor the Trustee, the Certificate
Registrar nor any agent of any of them shall be affected by notice to the
contrary.

         Section 3.07. Temporary Certificates.

                   (a) Pending the preparation of definitive Certificates, upon
the order of the Depositor, the Trustee shall execute and shall authenticate and
deliver temporary Certificates that are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such variations as the authorized officers executing such
Certificates may determine, as evidenced by their execution of such
Certificates.

                                       50
<PAGE>

                   (b) 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 or agency of the Trustee without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Trustee shall execute and authenticate and deliver in exchange
therefor a like aggregate Certificate Principal Amount of definitive
Certificates of the same Class in the authorized denominations. Until so
exchanged, the temporary Certificates shall in all respects be entitled to the
same benefits under this Agreement as definitive Certificates of the same Class.

         Section 3.08. Appointment of Paying Agent. The Trustee may appoint a
Paying Agent (which may be the Trustee) for the purpose of making distributions
to Certificateholders hereunder. The Trustee shall cause such Paying Agent to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums held by
it for the payment to Certificateholders in an Eligible Account in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to the Certificateholders. All funds remitted by the Trustee to any such Paying
Agent for the purpose of making distributions shall be paid to
Certificateholders on each Distribution Date and any amounts not so paid shall
be returned on such Distribution Date to the Trustee. If the Paying Agent is not
the Trustee, the Trustee shall cause to be remitted to the Paying Agent on or
before the Business Day prior to each Distribution Date, by wire transfer in
immediately available funds, the funds to be distributed on such Distribution
Date. Any Paying Agent shall be either a bank or trust company or otherwise
authorized under law to exercise corporate trust powers.

         Section 3.09. Book-Entry Certificates.

                   (a) Each Class of Book-Entry Certificates, upon original
issuance, shall be issued in the form of one or more typewritten Certificates
representing the Book-Entry Certificates, to be delivered to The Depository
Trust Company, or its custodian, the initial Clearing Agency, by, or on behalf
of, the Depositor. The Book-Entry Certificates shall initially be registered on
the Certificate Register in the name of the nominee of the Clearing Agency, and
no Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Book-Entry Certificates, except as provided
in Section 3.09(c). Unless Definitive Certificates have been issued to
Certificate Owners of Book-Entry Certificates pursuant to Section 3.09(c):

                  (i) the provisions of this Section 3.09 shall be in full force
         and effect;

                  (ii) the Depositor, the Paying Agent, the Registrar and the
         Trustee may deal with the Clearing Agency for all purposes (including
         the making of distributions on the Book-Entry Certificates) as the
         authorized representatives of the Certificate Owners and the Clearing
         Agency shall be responsible for crediting the amount of such
         distributions to the accounts of such Persons entitled thereto, in
         accordance with the Clearing Agency's normal procedures;

                  (iii) to the extent that the provisions of this Section 3.09
         conflict with any other provisions of this Agreement, the provisions of
         this Section 3.09 shall control; and

                                       51
<PAGE>

                  (iv) the rights of Certificate Owners shall be exercised only
         through the Clearing Agency and the Clearing Agency Participants and
         shall be limited to those established by law and agreements between
         such Certificate Owners and the Clearing Agency and/or the Clearing
         Agency Participants. Unless and until Definitive Certificates are
         issued pursuant to Section 3.09(c), the initial Clearing Agency will
         make book-entry transfers among the Clearing Agency Participants and
         receive and transmit distributions of principal of and interest on the
         Book-Entry Certificates to such Clearing Agency Participants.

                   (b) Whenever notice or other communication to the
Certificateholders is required under this Agreement, unless and until Definitive
Certificates shall have been issued to Certificate Owners pursuant to Section
3.09(c), the Trustee shall give all such notices and communications specified
herein to be given to Holders of the Book-Entry Certificates to the Clearing
Agency.

                   (c) If (i) (A) the Depositor advises the Trustee in writing
that the Clearing Agency is no longer willing or able to discharge properly its
responsibilities with respect to the Book-Entry Certificates, and (B) the
Trustee or the Depositor is unable to locate a qualified successor, (ii) the
Depositor, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Default, Certificate Owners representing beneficial
interests aggregating not less than 50% of the Class Principal Amount of a Class
of Book-Entry Certificates identified as such to the Trustee by an Officer's
Certificate from the Clearing Agency advise the Trustee and the Clearing Agency
through the Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interests
of the Certificate Owners of a Class of Book-Entry Certificates, the Trustee
shall notify or cause the Certificate Registrar to notify the Clearing Agency to
effect notification to all Certificate Owners, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Trustee of the Book-Entry Certificates by the Clearing Agency, accompanied by
registration instructions from the Clearing Agency for registration, the Trustee
shall issue the Definitive Certificates. Neither the transferor nor the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall be
deemed to be imposed upon and performed by the Trustee, to the extent
applicable, with respect to such Definitive Certificates and the Trustee shall
recognize the holders of the Definitive Certificates as Certificateholders
hereunder.

                                   ARTICLE IV

                        ADMINISTRATION OF THE TRUST FUND

         Section 4.01. [Reserved].

         Section 4.02. [Reserved].

         Section 4.03. Reports to Certificateholders.

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<PAGE>

         (a) On each Distribution Date, the Trustee shall have prepared (based
solely on information provided by the Servicer) and shall make available each
Certificateholder a written report setting forth the following information, by
Mortgage Pool and Certificate Group (on the basis of Mortgage Loan level
information obtained from the Servicer):

                  (i) the aggregate amount of the distribution to be made on
         such Distribution Date to the Holders of each Class of Certificates,
         other than any Class of Notional Certificates, allocable to principal
         on the Mortgage Loans, including Liquidation Proceeds and Insurance
         Proceeds, stating separately the amount attributable to scheduled
         principal payments and unscheduled payments in the nature of principal
         in each Mortgage Pool;

                  (ii) the aggregate amount of the distribution to be made on
         such Distribution Date to the Holders of each Class of Certificates,
         other than any Class of Principal Only Certificates, allocable to
         interest, including any Accrual Amount added to the Class Principal
         Amount of any Class of Accrual Certificates;

                  (iii) the amount, if any, of any distribution to the Holders
         of a Residual Certificate;

                  (iv) (A) the aggregate amount of any Advances required to be
         made by or on behalf of the Servicer (or the Trustee) with respect to
         such Distribution Date, (B) the aggregate amount of such Advances
         actually made, and (C) the amount, if any, by which (A) above exceeds
         (B) above;

                  (v) the Aggregate Principal Balance of the Mortgage Loans and
         the Non-APO Pool Balance of each Mortgage Pool for such Distribution
         Date, after giving effect to payments allocated to principal reported
         under clause (i) above;

                  (vi) the Class Principal Amount (or Class Notional Amount) of
         each Class of Certificates and the Component, Principal Amount of each
         Component, to the extent applicable, as of such Distribution Date after
         giving effect to payments allocated to principal reported under clause
         (i) above (and to the addition of any Accrual Amount in the case of any
         Class of Accrual Certificates), separately identifying any reduction of
         any of the foregoing Certificate Principal Amounts or Component
         Principal Amounts due to Realized Losses:

                  (vii) any Realized Losses realized with respect to the
         Mortgage Loans (x) in the applicable Prepayment Period and (y) in the
         aggregate since the Cut-off Date, stating separately the amount of
         Special Hazard Losses, Fraud Losses and Bankruptcy Losses and the
         aggregate amount of such Realized Losses, and the remaining Special
         Hazard Loss Amount, Fraud Loss Amount and Bankruptcy Loss Amount;

                  (viii) the amount of Servicing Fees paid during the Due Period
         to which such distribution relates;

                  (ix) the number and aggregate Scheduled Principal Balance of
         Mortgage Loans, as reported to the Trustee by the Servicer, (a)
         remaining outstanding (b)

                                       53
<PAGE>

         delinquent one month, (c) delinquent two months, (d) delinquent three
         or more months, and (e) as to which foreclosure proceedings have been
         commenced as of the close of business on the last Business Day of the
         calendar month immediately preceding the month in which such
         Distribution Date occurs;

                  (x) the aggregate principal balance of all Mortgage Loans that
         have become REO Property and the number of such Mortgage Loans as of
         the close of business on the last Business Day of the calendar month
         immediately preceding the month in which such Distribution Date occurs;

                  (xi) with respect to substitution of Mortgage Loans in the
         preceding calendar month, the Scheduled Principal Balance of each
         Deleted Mortgage Loan, and of each Qualifying Substitute Mortgage Loan;

                  (xii) the aggregate outstanding Interest Shortfalls and Net
         Prepayment Interest Shortfalls, if any, for each Class of Certificates,
         after giving effect to the distribution made on such Distribution Date;

                  (xiii) the Certificate Interest Rate applicable to such
         Distribution Date with respect to each Class of Certificates;

                  (xiv) if applicable, the amount of any shortfall (i.e., the
         difference between the aggregate amounts of principal and interest
         which Certificateholders would have received if there were sufficient
         available amounts in the Certificate Account and the amounts actually
         distributed); and

                  (xv) any other information for any Mortgage Loans that are
         delinquent three or more months and any REO Property held by the
         Trustee that is reported by the Servicer to the Trustee.

         In the case of information furnished pursuant to subclauses (1), (2)
and (7) above, the amounts shall be expressed as a dollar amount per $1,000 of
original principal amount of Certificates.

         The Trustee shall make such report and additional loan level
information (and, at its option, any additional files containing the same
information in an alternative format) available each month to Certificateholders
and the Rating Agencies via the Trustee's internet website. The Trustee's
internet website shall initially be located at
"www.usbank.com/corp-trust/inv_info_reporting _serach.html". Assistance in using
the website can be obtained by calling the Trustee's customer service desk at
(800) 934-6802. Such parties that are unable to use the website are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Trustee shall have the right to change the
way such 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.

         The foregoing information and reports shall be prepared and determined
by the Trustee based solely on Mortgage Loan data provided to the Trustee by the
Servicer (in a format agreed

                                       54
<PAGE>

to by the Trustee and the Servicer) no later than 12:00 p.m. (noon) Eastern
Standard Time four Business Days prior to the Distribution Date. The Trustee
shall be entitled to conclusively rely on the Mortgage Loan data provided by the
Servicer and shall have no liability for any errors in such Mortgage Loan data.

                   (b) Upon the reasonable advance written request of any
Certificateholder that is a savings and loan, bank or insurance company, the
Trustee shall provide, or cause to be provided, (or, to the extent that such
information or documentation is not required to be provided by the Servicer
under the Servicing Agreement, shall use reasonable efforts to obtain such
information and documentation from such Servicer, and provide to such
Certificateholder such reports and access to information and documentation
regarding the Mortgage Loans as such Certificateholder may reasonably deem
necessary to comply with applicable regulations of the Office of Thrift
Supervision or its successor or other regulatory authorities with respect to
investment in the Certificates; provided, however, that the Trustee shall be
entitled to be reimbursed by such Certificateholder for such Trustee's actual
expenses incurred in providing such reports and access.

                   (c) Within 90 days, or such shorter period as may be required
by statute or regulation, after the end of each calendar year, the Trustee shall
make available to each Person who at any time during the calendar year was a
Certificateholder of record, and make available to Certificate Owners
(identified as such by the Clearing Agency) in accordance with applicable
regulations, a report summarizing the items provided to Certificateholders
pursuant to Section 4.03(a) on an annual basis as may be required to enable such
Holders to prepare their federal income tax returns. Such information shall
include the amount of original issue discount accrued on each Class of
Certificates and information regarding the expenses of the Trust Fund.

         Section 4.04. Certificate Account.

                   (a) The Trustee shall establish and maintain in its name, as
trustee, a trust account (the "Certificate Account"), to be held in trust for
the benefit of the Certificateholders until disbursed pursuant to the terms of
this Agreement. The Certificate Account shall be an Eligible Account. If the
existing Certificate Account ceases to be an Eligible Account, the Trustee shall
establish a new Certificate Account that is an Eligible Account within 20
Business Days and transfer all funds on deposit in such existing Certificate
Account into such new Certificate Account. The Certificate Account shall relate
solely to the Certificates issued hereunder and funds in the Certificate Account
shall be held separate and apart from and shall not be commingled with any other
monies including, without limitation, other monies of the Trustee held under
this Agreement.

                   (b) The Trustee shall cause to be deposited into the
Certificate Account on the day on which, or, if such day is not a Business Day,
the Business Day immediately following the day on which, any monies are remitted
by the Servicer to the Trustee all such amounts. The Trustee shall deposit or
cause to be deposited into the Certificate Account, no later than the Business
Day following the Closing Date, any amounts representing Scheduled Payments on
the Mortgage Loans due after the Cut-off Date and received by the Trustee on or
before the Closing Date. Thereafter, the Trustee shall deposit or cause to be
deposited in the Certificate Account on the applicable Remittance Date the
following amounts received or payments made by it (other

                                       55
<PAGE>

than in respect of principal of and interest on the Mortgage Loans due on or
before the Cut-Off Date):

                   (i) all payments on account of principal, including Principal
         Prepayments and late collections, on the Mortgage Loans;

                   (ii) all payments on account of interest on the Mortgage
         Loans (other than payments due prior to the Cut-off Date), including
         Prepayment Premiums or penalties, net of the Servicing Fee with respect
         to each such Mortgage Loan;

                   (iii) any unscheduled payment or other recovery with respect
         to a Mortgage Loan not otherwise specified in this paragraph, including
         all Liquidation Proceeds with respect to the Mortgage Loans and REO
         Property, and all amounts received in connection with the operation of
         any REO Property, net of (x) any unpaid Servicing Fees with respect to
         such Mortgage Loans and (y) any amounts reimbursable to the Servicer
         under the Servicing Agreement and retained by the Servicer;

                   (iv) all Insurance Proceeds;

                   (v) all Advances made by the Servicer pursuant to the
         Servicing Agreement; and

                   (vi) all proceeds of any Mortgage Loan repurchased by the
         Depositor, the Servicer or any other Person.

         (c) The Trustee shall make withdrawals from the Certificate Account
only for the following purposes:

                   (i) to withdraw amounts deposited in the Certificate Account
         in error;

                   (ii) to pay to itself any investment income earned with
         respect to funds in the Certificate Account invested in Eligible
         Investments as set forth in subsection (c) below, and to make payments
         to itself prior to making distributions pursuant to Section 5.02 for
         the Trustee Fee and any expenses or other indemnification owing to the
         Trustee and others pursuant to any provision of this Agreement;

                   (iii) to make payments of the Servicing Fee (to the extent
         not already withheld or withdrawn by the Servicer) to the Servicer;

                   (iv) to make distributions to the Certificateholders pursuant
         to Article V; and

                   (v) to clear and terminate the Certificate Account pursuant
         to Section 7.02.

         (d) The Trustee may invest, or cause to be invested, funds held in the
Certificate Account, which funds, if invested, shall be invested in Eligible
Investments (which may be obligations of the Trustee described in paragraph
(viii) of the definition thereof). All such investments must be payable on
demand or mature no later than the next Distribution Date, and

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shall not be sold or disposed of prior to their maturity. All such Eligible
Investments will be made in the name of the Trustee (in its capacity as such) or
its nominee. All income and gain realized from any such investment shall be paid
to the Depositor and shall be subject to its withdrawal on order from time to
time. The amount of any losses incurred in respect of any such investments shall
be paid by the Trustee for deposit in the Certificate Account out of its own
funds, without any right of reimbursement therefor, immediately as realized.
Funds held in the Certificate Account that are not invested shall be held in
cash.

                                   ARTICLE V

                    DISTRIBUTIONS TO HOLDERS OF CERTIFICATES

         Section 5.01. Distributions Generally.

                   (a) Subject to Section 7.01 respecting the final distribution
on the Certificates, on each Distribution Date the Trustee or the Paying Agent
shall make distributions in accordance with this Article V. Such distributions
shall be made by check mailed to each Certificateholder's address as it appears
on the Certificate Register of the Certificate Registrar (which shall initially
be the Trustee) or, upon written request made to the Trustee at least three
Business Days prior to the related Distribution Date to any Certificateholder
owning an aggregate initial Certificate Principal Amount of at least $2,500,000,
or, in the case of the Notional Certificates and Principal Only Certificates, a
Percentage Interest of more than 25%, by wire transfer in immediately available
funds to an account specified in the request and at the expense of such
Certificateholder; provided, however, that the final distribution in respect of
any Certificate shall be made only upon presentation and surrender of such
Certificate at the Corporate Trust Office. Wire transfers will be made at the
expense of the Holder requesting such wire transfer by deducting a wire transfer
fee from the related distribution. Notwithstanding such final payment of
principal of any of the Certificates, each Residual Certificate will remain
outstanding until the termination of the REMIC established hereby and the
payment in full of all other amounts due with respect to the Residual
Certificate and at such time such final payment in retirement of any Residual
Certificate will be made only upon presentation and surrender of such
Certificate at the Corporate Trust Office of the Trustee. If any payment
required to be made on the Certificates is to be made on a day that is not a
Business Day, then such payment will be made on the next succeeding Business
Day.

                   (b) All distributions or allocations made with respect to
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in proportion
to their respective initial Certificate Principal Amounts (or initial Notional
Amounts).

         Section 5.02. Distributions from the Certificate Account.

                   (a) On each Distribution Date, the Trustee (or the Paying
Agent on behalf of the Trustee) shall withdraw from the Certificate Account the
Available Distribution Amount with respect to each Mortgage Pool, and shall
distribute such amount to the Holders of record of each Class of Certificates,
in the following order of priority:

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                  (i) from the Available Distribution Amount for each Mortgage
         Pool, to each Class of Senior Certificates or Component in the related
         Certificate Group (other than any related Class of Principal Only
         Certificates), the Accrued Certificate Interest thereon for such
         Distribution Date, as reduced by such Class's or Component's allocable
         share of any Net Prepayment Interest Shortfalls for the related
         Mortgage Pool for such Distribution Date; provided, however, that any
         shortfall in available amounts for each Mortgage Pool shall be
         allocated among the Classes or Component of the related Certificate
         Group in proportion to the amount of Accrued Certificate Interest (as
         so reduced) that would otherwise be distributable thereon;

                  (ii) from the Available Distribution Amount for each Mortgage
         Pool, to each Class of Senior Certificates or Component in the related
         Certificate Group (other than any related Class of Principal Only
         Certificates), any related Interest Shortfall for such Distribution
         Date; provided, however, that any shortfall in available amounts for
         each Mortgage Pool shall be allocated among the Classes or Component of
         the related Certificate Group in proportion to the Interest Shortfall
         for each such Class or Component on such Distribution Date;

                  (iii) from the remaining Available Distribution Amount for
         each Mortgage Pool, to the Senior Certificates or Components of the
         related Certificate Group (other than any Class of Notional
         Certificates), as follows:

                           (A) to the Class A1 and Class R Certificates, the
         A2(1) Component and the APO (1) Component, from the Available
         Distribution Amount for Pool 1 for such Distribution Date, in reduction
         of their respective Class Principal Amounts or Component Principal
         Amounts, concurrently, as follows:

                                   (1) to the Class A1 and Class R Certificates
                  and the A2(1) Component, in an amount up to the Senior
                  Principal Distribution Amount for Pool 1 for such Distribution
                  Date, in the following order of priority:

                                                      (a) to the Class R
                                    Certificate, until the Class Principal
                                    Amount thereof has been reduced to zero;

                                                      (b) sequentially, to the
                                    Class A1 Certificates and the A2(1)
                                    Component, in that order, until the
                                    respective Class Principal Amount (or
                                    Component Principal Amount) thereof has been
                                    reduced to zero;

                                   (2) to the APO(1) Component, the APO
                  Principal Distribution Amount for Pool 1 for such Distribution
                  Date, until the Component Principal Amount thereof has been
                  reduced to zero;

                           (B) to the A2(2) Component and the APO(2) Component,
         in reduction of their respective Component Principal Amounts, from the
         Available Distribution Amount for Pool 2, concurrently, as follows:

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                                   (1) to the A2(2) Component, in an amount up
                  to the Senior Principal Distribution Amount for Pool 2, until
                  the Component Principal Amount thereof has been reduced to
                  zero; and

                                   (2) to the Class APO(2) Component, the APO
                  Principal Distribution Amount thereof for Pool 2 for such
                  Distribution Date, until the Component Principal Amount
                  thereof has been reduced to zero;

                           (C) to the Class A3 and Class A4 Certificates in
         reduction of their respective Class Principal Amounts and to the APO(3)
         Component, in reduction of its Component Principal Amount, from the
         Available Distribution Amount for Pool 3, concurrently, as follows:

                                   (1) sequentially, to the Class A3 and Class
                  A4 Certificates, in that order, the Senior Principal
                  Distribution Amount for Pool 3, until the respective Class
                  Principal Amounts thereof have been reduced to zero; and

                                   (2) to the APO(3) Component, the APO
                  Principal Distribution Amount for Pool 3, until the Component
                  Principal Amount thereof has been reduced to zero; and

                           (D) to the Class A5 Certificates in reduction of
         their Class Principal Amount and to the APO(4) Component, in reduction
         of its Component Principal Amount, from the Available Distribution
         Amount for Pool 4, concurrently, as follows:

                                   (1) to the Class A5 Certificates, the Senior
                  Principal Distribution Amount for Pool 4, until the Class
                  Principal Amount thereof has been reduced to zero; and

                                   (2) to the APO(4) Component, the APO
                  Principal Distribution Amount for Pool 4, until Component
                  Principal Amount thereof has been reduced to zero;

                  (iv) on each Distribution Date on and after the Credit Support
         Depletion Date, to the extent of the remaining Available Distribution
         Amount for any Mortgage Pool the related Senior Certificates and
         Components of which have been reduced to zero, pro rata, to each Class
         or Component of Senior Certificates remaining outstanding, on the basis
         of their respective Class Principal Amounts or Component Principal
         Amounts, any Non-APO Senior Certificate Deferred Amount for that Class
         or Component; provided, however, that any Non-APO Senior Certificate
         Deferred Amount in respect of the Class A1 Certificates shall only be
         paid to the extent of such Class's pro rata share of any such remaining
         Available Distribution Amount in respect of Pool 3 and any other
         Mortgage Pool all of the remaining Mortgage Loans in which are, at the
         time such payment is made in respect of any Non-APO Senior Certificate
         Deferred Amount for the Class A1 Certificates, Fannie Mae Conforming
         Mortgage Loans;

                  (v) to the APO(1), APO(2), APO(3) and APO(4) Components, to
         the extent of the remaining Available Distribution Amount for the
         related Mortgage Pool, the

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<PAGE>

         Component Deferred Amount for that Component, until the related
         Component Principal Amount has been reduced to zero; provided, however,
         that (x) distributions pursuant to this priority shall not exceed the
         Subordinate Principal Distribution Amount for the related Mortgage Pool
         for such date; and (y) such amounts will not reduce the Component
         Principal Amounts of such Components; and;

                  (vi) from the remaining Available Distribution Amount for all
         Mortgage Pools, subject to the prior distribution of amounts pursuant
         to Section 5.02(f) in the case of clauses (C), (F), (I), (L), (O) and
         (R) below, to the Subordinated Certificates, in the following order of
         priority:

                           (A) to the Class B1 Certificates, the Accrued
         Certificate Interest thereon for such Distribution Date, as reduced by
         such Class's allocable share of any Net Prepayment Interest Shortfalls
         for such Distribution Date;

                           (B) to the Class B1 Certificates, any Interest
         Shortfall for such Class on such Distribution Date;

                           (C) to the Class B1 Certificates, in reduction of the
         Class Principal Amount thereof, such Class's Subordinate Class
         Percentage of each Subordinate Principal Distribution Amount for such
         Distribution Date, except as provided in Section 5.02(c), until the
         Certificate Principal Balance thereof has been reduced to zero;

                           (D) to the Class B2 Certificates, the Accrued
         Certificate Interest thereon for such Distribution Date, as reduced by
         such Class's allocable share of any Net Prepayment Interest Shortfalls
         for such Distribution Date;

                           (E) to the Class B2 Certificates, any Interest
         Shortfall for such Class on such Distribution Date;

                           (F) to the Class B2 Certificates, in reduction of the
         Certificate Principal Amount thereof, such Class's Subordinate Class
         Percentage of each Subordinate Principal Distribution Amount for such
         Distribution Date, except as provided in Section 5.02(c), until the
         Class Principal Amount thereof has been reduced to zero;

                           (G) to the Class B3 Certificates, the Accrued
         Certificate Interest thereon for such Distribution Date, as reduced by
         such Class's allocable share of any Net Prepayment Interest Shortfalls
         for such Distribution Date;

                           (H) to the Class B3 Certificates, any Interest
         Shortfall for such Class on such Distribution Date;

                           (I) to the Class B3 Certificates, in reduction of the
         Certificate Principal Amount thereof, such Class's Subordinate Class
         Percentage of each Subordinate Principal Distribution Amount for such
         Distribution Date, except as provided in Section 5.02(c), until the
         Class Principal Amount thereof has been reduced to zero;

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<PAGE>

                           (J) to the Class B4 Certificates, the Accrued
         Certificate Interest thereon for such Distribution Date, as reduced by
         such Class's allocable share of any Net Prepayment Interest Shortfalls
         for such Distribution Date;

                           (K) to the Class B4 Certificates, any Interest
         Shortfall for such Class on such Distribution Date;

                           (L) to the Class B4 Certificates, in reduction of the
         Certificate Principal Amount thereof, such Class's Subordinate Class
         Percentage of each Subordinate Principal Distribution Amount for such
         Distribution Date, except as provided in Section 5.02(c), until the
         Certificate Principal Balance thereof has been reduced to zero;

                           (M) to the Class B5 Certificates, the Accrued
         Certificate Interest thereon for such Distribution Date, as reduced by
         such Class's allocable share of any Net Prepayment Interest Shortfalls
         for such Distribution Date;

                           (N) to the Class B5 Certificates, any Interest
         Shortfall for such Class on such Distribution Date;

                           (O) to the Class B5 Certificates, in reduction of the
         Certificate Principal Amount thereof, such Class's Subordinate Class
         Percentage of each Subordinate Principal Distribution Amount for such
         Distribution Date, except as provided in Section 5.02(c), until the
         Class Principal Balance thereof has been reduced to zero;

                           (P) to the Class B6 Certificates, the Accrued
         Certificate Interest thereon for such Distribution Date, as reduced by
         such Class's allocable share of any Net Prepayment Interest Shortfalls
         for such Distribution Date;

                           (Q) to the Class B6 Certificates, any Interest
         Shortfall for such Class on such Distribution Date; and

                           (R) to the Class B6 Certificates, in reduction of the
         Certificate Principal Amount thereof, such Class's Subordinate Class
         Percentage of each Subordinate Principal Distribution Amount for such
         Distribution Date, except as provided in Section 5.02(c), until the
         Certificate Principal Balance thereof has been reduced to zero.

                   (b) Net Prepayment Interest Shortfalls for each Mortgage Pool
shall be allocated among the Certificates and Components of the related
Certificate Group (other than any related Principal Only Certificates) pro rata
based on (i) in the case of the related Non-APO Senior Certificates, the Accrued
Certificate Interest otherwise distributable thereon, and (ii) in the case of
the Subordinate Certificates, interest accrued on the related Apportioned
Principal Balances.

                   (c) (i) If on any Distribution Date the Credit Support
Percentage for the Class B1 Certificates is less than the Original Credit
Support Percentage for such Class, then, notwithstanding anything to the
contrary in Section 5.02(a), no distribution of amounts described

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<PAGE>

in clauses (ii) and (iii) of the definition of Subordinate Principal
Distribution Amount will be made in respect of the Class B2, Class B3, Class B4,
Class B5 or Class B6 Certificates on such Distribution Date. (ii) If on any
Distribution Date the Credit Support Percentage for the Class B2 Certificates is
less than the Original Credit Support Percentage for such Class, then,
notwithstanding anything to the contrary in Section 5.02(a), no distribution of
amounts described in clauses (ii) and (iii) of the definition of Subordinate
Principal Distribution Amount will be made in respect of the Class B3, Class B4,
Class B5 or Class B6 Certificates on such Distribution Date. (iii) If on any
Distribution Date the Credit Support Percentage for the Class B3 Certificates is
less than the Original Credit Support Percentage for such Class, then,
notwithstanding anything to the contrary in Section 5.02(a), no distribution of
amounts described in clauses (ii) and (iii) of the definition of Subordinate
Principal Distribution Amount will be made in respect of the Class B4, Class B5
or Class B6 Certificates on such Distribution Date. (iv) If on any Distribution
Date the Credit Support Percentage for the Class B4 Certificates is less than
the Original Credit Support Percentage for such Class, then, notwithstanding
anything to the contrary in Section 5.02(a), no distribution of amounts
described in clauses (ii) and (iii) of the definition of Subordinate Principal
Distribution Amount will be made in respect of the Class B5 or Class B6
Certificates on such Distribution Date. (v) If on any Distribution Date the
Credit Support Percentage for the Class B5 Certificates is less than the
Original Credit Support Percentage for such Class, then, notwithstanding
anything to the contrary in Section 5.02(a), no distribution of amounts
described in clauses (ii) and (iii) of the definition of Subordinate Principal
Distribution Amount will be made in respect of the Class B6 Certificates on such
Distribution Date.

         Any amount not distributed in respect of any Class on any Distribution
Date pursuant to the immediately preceding paragraph will be allocated among the
remaining Subordinate Classes in proportion to their respective Certificate
Principal Amounts.

                   (d) On each Distribution Date, the Trustee shall distribute
to the Holder of the Class R Certificate any amounts remaining in the REMIC for
such Distribution Date after application of all amounts described in paragraph
(a) of this Section 5.02. Any distributions pursuant to this paragraph (e) shall
not reduce the Class Principal Amount of the Class R Certificate.

         Section 5.03. Allocation of Realized Losses.

                   (a) On any Distribution Date, (x) the applicable APO
Percentage of the principal portion of each Realized Loss (other than any Excess
Loss) in respect of a Mortgage Loan in each Mortgage Pool will be allocated to
the related Class of Principal Only Certificates until the Class Principal
Amount thereof has been reduced to zero; and (y) the applicable Non-APO
Percentage of the principal portion of each Realized Loss (other than any Excess
Loss) in respect of a Mortgage Loan shall be allocated in the following order of
priority:

                           first, to the Class B6 Certificates, until the Class
                   Principal Amount thereof has been reduced to zero;

                           second, to the Class B5 Certificates, until the Class
                   Principal Amount thereof has been reduced to zero;

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<PAGE>

                           third, to the Class B4 Certificates, until the Class
                   Principal Amount thereof has been reduced to zero;

                           fourth, to the Class B3 Certificates, until the Class
                   Principal Amount thereof has been reduced to zero;

                           fifth, to the Class B2 Certificates, until the Class
                   Principal Amount thereof has been reduced to zero;

                           sixth, to the Class B1 Certificates, until the Class
                   Principal Amount thereof has been reduced to zero; and

                           seventh, to the Classes of Senior Certificates or
                   Components of the related Certificated Group, pro rata, in
                   accordance with their Class Principal Amounts or Component
                   Principal Amounts; provided, that any such loss allocated to
                   any Class of Accrual Certificates shall be allocated (subject
                   to Section 5.03(c)) on the basis of the lesser of (x) the
                   Class Principal Amount thereof immediately prior to the
                   applicable Distribution Date and (y) the Class Principal
                   Amount thereof on the Closing Date (as reduced by any
                   Realized Losses previously allocated thereto).

                   (b) With respect to any Distribution Date, the applicable
Non-APO Percentage of the principal portion of any Excess Loss in respect of a
Mortgage Loan shall be allocated, pro rata, to the Subordinate Certificates and
the Group 1 Certificates, Group 2 Certificates, Group 3 Certificates and Group 4
Certificates (without regard to whether the Realized Loss was realized by Pool
1, Pool 2, Pool 3 or Pool 4) and on the basis of the Apportioned Principal
Balances of the Classes of Subordinate Certificates and Class Principal Amounts
of the Senior Certificates; provided, that any such loss allocated to any Class
of Accrual Certificates (and any Accrual Component) shall be allocated (subject
to Section 5.03(c)) on the basis of the lesser of (x) the Class Principal Amount
thereof immediately prior to the applicable Distribution Date and (y) the Class
Principal Amount thereof on the Closing Date (as reduced by any Realized Losses
previously allocated thereto). The applicable APO Percentage of the principal
portion of an Excess Loss in a Mortgage Pool will be applied to the related
Class of Principal Only Certificates until the Class Principal Amount thereof
has been reduced to zero.

                   (c) Any Realized Losses allocated to a Class of Certificates
pursuant to Section 5.03(a) or (b) shall be allocated among the Certificates of
such Class in proportion to their respective Certificate Principal Amounts. Any
allocation of Realized Losses pursuant to this paragraph (c) shall be
accomplished by reducing the Certificate Principal Amount of the related
Certificates on the related Distribution Date in accordance with Section
5.03(d).

                   (d) Realized Losses allocated in accordance with this Section
5.03 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,
except that the aggregate amount of Realized Losses to be allocated to the
Principal Only Certificates on such Distribution Date will be taken into account
in determining distributions in respect of any related Component Deferred Amount
for such date.

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<PAGE>

                   (e) On each Distribution Date, the Subordinate Certificate
Writedown Amount for such date shall effect a corresponding reduction in the
Certificate Principal Amount of the lowest ranking Class of outstanding
Subordinate Certificates, which reduction shall occur on such Distribution Date
after giving effect to distributions made on such Distribution Date.

                   (f) In the event that there is a recovery of an amount in
respect of principal of a Mortgage Loan, which amount had previously been
allocated as a Realized Loss to one or more Classes of Certificates, each
outstanding Class to which any portion of such Realized Loss had previously been
allocated shall be entitled to receive, on the Distribution Date in the month
following the month in which such recovery is received, its pro rata share
(based on the Class Principal Amount thereof) of such recovery, up to the amount
of the portion of such Realized Loss previously allocated to such Class. In the
event that the total amount of such recovery exceeds the amount of Realized Loss
allocated to the outstanding Classes in accordance with the preceding
provisions, each outstanding Class of Certificates shall be entitled to receive
its pro rata share of the amount of such excess, up to the amount of any
unrecovered Realized Loss previously allocated to such Class. Any such recovery
allocated to a Class of Certificates shall not further reduce the Certificate
Principal Amount of such Certificate. Any such amounts not otherwise allocated
to any Class of Certificates, pursuant to this subsection shall be treated as
Principal Prepayments for purposes of this Agreement.

         Section 5.04. Advances by the Trustee.

                   (a) Advances shall be made in respect of each Remittance Date
as provided in the Servicing Agreement and herein. If, on any Determination
Date, the Servicer determines that any Scheduled Payments due during the related
Due Period (other than Balloon Payments) have not been received, the Servicer
will advance such amount, less an amount, if any, to be set forth in an
Officer's Certificate to be delivered to the Trustee on such Determination Date,
in accordance with the terms of the Servicing Agreement. If the Servicer
determines that an Advance is required, it will on the Remittance Date
immediately following such Determination Date remit to the Trustee from its own
funds for deposit in the Certificate Account immediately available funds in an
amount equal to such Advance. The Servicer shall be entitled to be reimbursed
from the Certificate Account for all Advances made by it as provided in Section
4.04.

                   (b) In the event that the Servicer fails for any reason to
make an Advance required to be made pursuant to the Servicing Agreement on or
before the Remittance Date, the Trustee, solely in its capacity as successor
Servicer pursuant to Section 6.14, shall, on or before the related Distribution
Date, deposit in the Certificate Account an amount equal to the excess of (a)
Advances required to be made by the Servicer that would have been deposited in
such Certificate Account over (b) the amount of any Advance made by the Servicer
with respect to such Distribution Date; provided, however, that the Trustee
shall be required to make such Advance only if it is not prohibited by law from
doing so and it has determined that such Advance would be recoverable from
amounts to be received with respect to such Mortgage Loan, including late
payments, Liquidation Proceeds, Insurance Proceeds, or otherwise. The Trustee
shall be entitled to be reimbursed from the Certificate Account for Advances
made by it pursuant to this Section 5.04 as if it were the Servicer.

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<PAGE>

                                   ARTICLE VI

                             CONCERNING THE TRUSTEE;
                                EVENTS OF DEFAULT

         Section 6.01. Duties of Trustee.

                   (a) The Trustee, except during the continuance of an Event of
Default (of which a Responsible Officer of the Trustee shall have actual
knowledge) undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. Any permissive right of the Trustee
provided for in this Agreement shall not be construed as a duty of the Trustee.
If an Event of Default (of which a Responsible Officer of the Trustee shall have
actual knowledge) has occurred and has not otherwise been cured or waived, 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

                   (b) 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 are in the form required by this Agreement; provided,
however, that the Trustee shall not be responsible for the accuracy or content
of any such resolution, certificate, statement, opinion, report, document, order
or other instrument furnished to the Trustee pursuant to this Agreement, and
shall not be required to recalculate or verify any numerical information
furnished to the Trustee pursuant to this Agreement.

                   (c) The Trustee shall not have any liability arising out of
or in connection with this Agreement, except for its negligence or willful
misconduct. No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:

                           (i) 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 consent or direction of Holders of
         Certificates as provided in Section 6.19 hereof;

                           (ii) For all purposes under this Agreement, the
         Trustee shall not be deemed to have notice of any Event of Default
         (other than resulting from a failure by the Servicer (i) to remit funds
         (or to make Advances) or (ii) to furnish information to the Trustee
         when required to do so) unless a Responsible Officer of the Trustee has
         actual knowledge thereof or unless written notice of any event which is
         in fact such a default is received by the Trustee at the Corporate
         Trust Office, and such notice references the Holders of the
         Certificates and this Agreement;

                           (iii) No provision of this Agreement shall require
         the Trustee to expend or risk its own funds or otherwise incur any
         financial liability in the performance of any of its duties hereunder,
         or in the exercise of any of its rights or powers, if it shall have

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<PAGE>

         reasonable grounds for believing that repayment of such funds or
         adequate indemnity against such risk or liability is not reasonably
         assured to it.

                   (d) The Trustee shall have no duty hereunder with respect to
any complaint, claim, demand, notice or other document it may receive or which
may be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided, however,
that the Trustee shall use its best efforts to remit to the Servicer upon
receipt any such complaint, claim, demand, notice or other document (i) which is
delivered to the Corporate Trust Office of the Trustee, (ii) of which a
Responsible Officer has actual knowledge, and (iii) which contains information
sufficient to permit the Trustee to make a determination that the real property
to which such document relates is a Mortgaged Property.

                   (e) The Trustee shall not 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 Certificateholders of any Class holding
Certificates which evidence, as to such Class, Percentage Interests aggregating
not less than 25% as to the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred upon the Trustee under this Agreement.

                   (f) Subject to Section 4.04, the Trustee shall not be held
liable by reason of any insufficiency in any account held by or on behalf of the
Trustee resulting from any investment loss on any Eligible Investment included
therein (except to the extent that the Trustee is the obligor and has defaulted
thereon).

                   (g) Except as otherwise provided herein, the Trustee shall
have no duty (A) to see to 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
re-recording, re-filing or re-depositing of any thereof, (B) to see to any
insurance, (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 Certificate Account, or (D) to confirm or verify the
contents of any reports or certificates of the 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.

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

                   (i) Notwithstanding anything in this Agreement to the
contrary, the Trustee shall not be liable for special, indirect or consequential
losses or damages 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.

         Section 6.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 6.01:

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                   (i) The Trustee may request, and may rely and shall be
         protected in acting or refraining from acting upon any resolution,
         Officer's Certificate, certificate of auditors, Opinion of Counsel or
         any other certificate, statement, instrument, opinion, report, notice,
         request, consent, order, approval, 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 may consult with counsel and any advice of
         its counsel 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 not be personally liable for any
         action taken, suffered or omitted by it in good faith and reasonably
         believed by it to be authorized or within the discretion or rights or
         powers conferred upon it by this Agreement;

                   (iv) Unless an Event of Default shall have occurred and be
         continuing, the Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, consent,
         order, approval, bond or other paper or document (provided the same
         appears regular on its face), unless requested in writing to do so by
         Holders of at least a majority in Class Principal Amount (or Class
         Notional Amount) of each Class of Certificates; 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 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 expense or liability or payment of such estimated expenses
         as a condition to proceeding. The reasonable expense thereof shall be
         paid by the Holders requesting such investigation;

                   (v) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents, custodians, or attorneys, which agents, custodians or
         attorneys shall have any and all of the rights, powers, duties and
         obligations of the Trustee conferred on them by such appointment
         provided that the Trustee shall continue to be responsible for its
         duties and obligations hereunder to the extent provided herein, and
         provided further that the Trustee shall not be responsible for any
         misconduct or negligence on the part of any such agent or attorney
         appointed with due care by the Trustee;

                   (vi) The Trustee shall be under no obligation to exercise any
         of the trusts or powers vested in it by this Agreement or to institute,
         conduct or defend any litigation hereunder or in relation hereto, in
         each case 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;

                   (vii) 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

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         answerable for other than its negligence or willful misconduct in the
         performance of such act; and

                   (viii) The Trustee shall not be required to give any bond or
         surety in respect of the execution of the Trust Fund created hereby or
         the powers granted hereunder.

         Section 6.03. Trustee Not Liable for Certificates. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificate of authentication on the Certificates)
or of any Mortgage Loan, or related document save that the Trustee represents
that, assuming due execution and delivery by the other parties hereto, this
Agreement has been duly authorized, executed and delivered by it and constitutes
its valid and binding obligation, enforceable against it in accordance with its
terms except that such enforceability may be subject to (A) applicable
bankruptcy and insolvency laws and other similar laws affecting the enforcement
of the rights of creditors generally, and (B) general principles of equity
regardless of whether such enforcement is considered in a proceeding in equity
or at law. The Trustee shall not be accountable for the use or application by
the Depositor of funds paid to the Depositor in consideration of the assignment
of the Mortgage Loans to the Trust Fund by the Depositor or for the use or
application of any funds deposited into the Certificate Account, any Escrow
Account or any other fund or account maintained with respect to the
Certificates. The Trustee shall not be responsible for the legality or validity
of this Agreement or the validity, priority, perfection or sufficiency of the
security for the Certificates issued or intended to be issued hereunder. The
Trustee shall have no responsibility for filing any financing or continuation
statement in any public office at any time or to otherwise perfect or maintain
the perfection of any security interest or lien granted to it hereunder or to
record this Agreement.

         Section 6.04. Trustee May Own Certificates. The Trustee and any
Affiliate or agent of the Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates and may transact banking and trust
with the other parties hereto with the same rights it would have if it were not
Trustee or such agent.

         Section 6.05. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be (i) an institution insured by the FDIC and (ii)
a corporation or national banking association, organized and doing business
under the laws of any State or the United States of America, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by federal or state authority. If such corporation or national banking
association 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, the combined capital and surplus of such
corporation or national banking association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time either the Trustee shall cease to be eligible in
accordance with provisions of this Section, the Trustee shall resign immediately
in the manner and with the effect specified in Section 6.06.

         Section 6.06. Resignation and Removal of Trustee.

                   (a) The Trustee may at any time resign and be discharged from
the trust hereby created by giving written notice thereof to the Depositor. Upon
receiving such notice of

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resignation, the Depositor will promptly appoint a successor trustee by written
instrument, one copy of which instrument shall be delivered to the resigning
Trustee one copy to the successor trustee and one copy to the Servicer. If no
successor trustee shall have been so appointed and shall have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.

                   (b) If at any time (i) the Trustee shall cease to be eligible
in accordance with the provisions of Section 6.05 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver
of the Trustee of its property shall be appointed, or any public officer shall
take charge or control of the Trustee of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, (iii) a tax is imposed or
threatened with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund held by the Trustee is located, or (iv) the continued use of the
Trustee would result in a downgrading of the rating by the Rating Agencies of
any Class of Certificates with a rating, then the Depositor shall remove the
Trustee and appoint a successor trustee by written instrument, one copy of which
instrument shall be delivered to the Trustee so removed, one copy to the
successor trustee and one copy to the Servicer.

                   (c) The Holders of more than 50% of the Class Principal
Amount (or Class Notional Amount) of each Class of Certificates may at any time
upon 30 days' written notice to the Trustee and the Depositor remove the Trustee
by such written instrument, signed by such Holders or their attorney-in-fact
duly authorized, one copy of which instrument shall be delivered to the
Depositor, one copy to the Trustee so removed and one copy to the Servicer; the
Depositor shall thereupon use its best efforts to appoint a mutually acceptable
successor trustee in accordance with this Section.

                   (d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 6.07.

Section 6.07. Successor Trustee.

                   (a) Any successor trustee appointed as provided in Section
6.06 shall execute, acknowledge and deliver to the Depositor 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 herein. The predecessor trustee shall deliver to the successor
trustee (or assign to the Trustee its interest under each Custodial Agreement,
to the extent permitted thereunder) all Mortgage Files and documents and
statements related to each Mortgage Files held by it hereunder, and shall duly
assign, transfer, deliver and pay over to the successor trustee the entire Trust
Fund, together with all necessary instruments of transfer and assignment or
other documents properly executed necessary to effect such transfer and such of
the record or copies thereof maintained by the predecessor trustee in the
administration hereof as may be requested by the successor trustee and shall
thereupon be discharged from all duties and responsibilities under this
Agreement. In addition,

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the predecessor trustee shall execute and deliver such other instruments and do
such other things as may reasonably be required to more fully and certainly vest
and confirm in the successor trustee as applicable all such rights, powers,
duties and obligations.

                   (b) No successor trustee shall accept appointment as provided
in this Section unless at the time of such appointment such successor trustee
shall be eligible under the provisions of Section 6.05.

                   (c) Upon acceptance of appointment by a successor trustee as
provided in this Section, the predecessor trustee shall mail notice of the
succession of such trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register and to the Rating Agencies. The
expenses of such mailing shall be borne by the predecessor trustee.

         Section 6.08. Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any Persons succeeding to the business of the Trustee shall
be the successor to the Trustee 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 that such Person shall be
eligible under the provisions of Section 6.05.

         Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian.

                   (a) Notwithstanding any other provisions hereof, at any time,
the Trustee, the Depositor or the Certificateholders evidencing more than 50% of
the Class Principal Amount (or Class Notional Amount) of each Class of
Certificates shall each have the power from time to time to appoint one or more
Persons to act either as co-trustees jointly with the Trustee, or as separate
trustees, or as custodians, for the purpose of holding title to, foreclosing or
otherwise taking action with respect to any Mortgage Loan outside the state
where the Trustee has its principal place of business where such separate
trustee or co-trustee is necessary or advisable (or the Trustee has been advised
by the Servicer that such separate trustee or co-trustee is necessary or
advisable) under the laws of any state in which a property securing a Mortgage
Loan is located or for the purpose of otherwise conforming to any legal
requirement, restriction or condition in any state in which a property securing
a Mortgage Loan is located or in any state in which any portion of the Trust
Fund is located. The separate Trustees, co-trustees, or custodians so appointed
shall be trustees or custodians for the benefit of all the Certificateholders
and shall have such powers, rights and remedies as shall be specified in the
instrument of appointment; provided, however, that no such appointment shall, or
shall be deemed to, constitute the appointee an agent of the Trustee.

                   (b) Every separate trustee, co-trustee, and custodian shall,
to the extent permitted by law, be appointed and act subject to the following
provisions and conditions:

                           (i) all powers, duties, obligations and rights
         conferred upon the Trustee in respect of the receipt, custody and
         payment of moneys shall be exercised solely by the Trustee;

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                           (ii) all other 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, co-trustee, or custodian jointly, except to the extent that
         under any law of any jurisdiction in which any particular act or acts
         are to be performed 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 Fund or
         any portion thereof in any such jurisdiction, shall be exercised and
         performed by such separate trustee, co-trustee, or custodian;

                           (iii) no trustee or custodian hereunder shall be
         personally liable by reason of any act or omission of any other trustee
         or custodian hereunder; and

                           (iv) the Trustee or the Certificateholders evidencing
         more than 50% of the Aggregate Voting Interests of the Certificates may
         at any time accept the resignation of or remove any separate trustee,
         co-trustee or custodian, so appointed by it or them, if such
         resignation or removal does not violate the other terms of this
         Agreement.

                   (c) 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, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VI. 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.

                   (d) Any separate trustee, co-trustee or custodian 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. The Trustee shall not
be responsible for any action or inaction of any separate trustee, co-trustee or
custodian. If any separate trustee, co-trustee or custodian 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.

                   (e) No separate trustee, co-trustee or custodian hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 6.05 hereunder and no notice to Certificateholders of the appointment
shall be required under Section 6.07 hereof.

                   (f) The Trustee agrees to instruct the co-trustees, if any,
to the extent necessary to fulfill the Trustee's obligations hereunder.

                   (g) The Trustee shall pay the reasonable compensation of the
co-trustees to the extent, and in accordance with the standards, specified in
Section 6.12 hereof (which compensation shall not reduce any compensation
payable to the Trustee under such Section).

         Section 6.10.  Authenticating Agents.

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                   (a) The Trustee may appoint one or more Authenticating Agents
which shall be authorized to act on behalf of the Trustee in authenticating
Certificates. Wherever reference is made in this Agreement to the authentication
of Certificates by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication on behalf of the
Trustee by an Authenticating Agent and a certificate of authentication executed
on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent
must be a corporation organized and doing business under the laws of the United
States of America or of any state, having a combined capital and surplus of at
least $15,000,000, authorized under such laws to do a trust business and subject
to supervision or examination by federal or state authorities.

                   (b) Any Person into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any Person succeeding to the corporate
agency business of any Authenticating Agent, shall continue to be the
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

                   (c) Any Authenticating Agent may at any time resign by giving
at least 30 days' advance written notice of resignation to the Trustee and the
Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of resignation
or upon such a termination, or in case at any time any Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section
6.10, the Trustee may appoint a successor Authenticating Agent, shall give
written notice of such appointment to the Depositor and shall mail notice of
such appointment to all Holders of Certificates. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers, duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section 6.10. No Authenticating Agent shall have responsibility or
liability for any action taken by it as such at the direction of the Trustee.
Any Authenticating Agent shall be entitled to reasonable compensation for its
services and, if paid by the Trustee, it shall be a reimbursable expense
pursuant to Section 6.12.

         Section 6.11. Indemnification of Trustee. The Trustee and its
directors, officers, employees and agents shall be entitled to indemnification
from the Trust Fund for any loss, liability or expense incurred without
negligence or willful misconduct on their part (it being understood that the
negligence or willful misconduct of any Custodian shall not constitute
negligence or willful misconduct on the part of the Trustee or its directors,
officers, employees, or agents for such purpose), arising out of, or in
connection with, the acceptance or administration of the trusts created
hereunder or in connection with the performance of the Trustee's duties
hereunder or under any Servicing Agreement or Custodial Agreement, including any
applicable fees and expenses payable pursuant to Section 6.12 and the costs and
expenses of defending themselves against any claim in connection with the
exercise or performance of any of their powers or duties hereunder, provided
that:

                   (i) with respect to any such claim, the Trustee shall have
         given the Depositor and the Holders written notice thereof promptly
         after the Trustee shall have

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<PAGE>

         knowledge thereof; provided that failure to so notify shall not
         relieve the Trust Fund of the obligation to indemnify the Trustee;

                   (ii) while maintaining control over its own defense, the
         Trustee shall cooperate and consult fully with the Depositor in
         preparing such defense; and

                   (iii) notwithstanding anything to the contrary in this
         Section 6.11, the Trust Fund shall not be liable for settlement of any
         such claim by the Trustee entered into without the prior consent of the
         Depositor, which consent shall not be unreasonably withheld.

         The provisions of this Section 6.11 shall survive any termination of
this Agreement and the resignation or removal of the Trustee and shall be
construed to include, but not be limited to any loss, liability or expense under
any environmental law.

         Section 6.12. Compensation of the Trustee. The Trustee shall be
entitled to (i) receive the Trustee Fee at the Trustee Fee Rate and (ii)
reimbursement of all reasonable expenses, disbursements and advancements
incurred or made by the Trustee in accordance with this Agreement (including
fees and expenses of its counsel and all persons not regularly in its
employment), except any such expenses arising from its negligence, bad faith or
willful misconduct. The Custodian shall be compensated as separately agreed with
the Depositor.

         Section 6.13. Collection of Monies. Except as otherwise expressly
provided in this Agreement, the Trustee may demand payment or delivery of, and
shall receive and collect, all money and other property payable to or receivable
by the Trustee pursuant to this Agreement. The Trustee shall hold all such money
and property received by it as part of the Trust Fund and shall distribute it as
provided in this Agreement. If the Trustee shall not have timely received
amounts to be remitted with respect to the Mortgage Loans from the Servicer, the
Trustee shall request the Servicer to make such distribution as promptly as
practicable or legally permitted. If the Trustee shall subsequently receive any
such amount, it may withdraw such request.

         Section 6.14. Trustee To Act; Appointment of Successor.

                   (a) If an Event of Default shall occur, then, in each and
every case, subject to applicable law, so long as any such Event of Default
shall not have been remedied within any period of time prescribed by the
Servicing Agreement, the Trustee, by notice in writing to the Servicer may, and
shall, if so directed by Certificateholders evidencing more than 50% of the
Aggregate Voting Interests, terminate all of the rights and obligations of the
Servicer under the Servicing Agreement and in and to the Mortgage Loans and the
proceeds thereof. Within 90 days following the receipt by the Servicer of such
written notice, all authority and power of the Servicer, and only in its
capacity as Servicer under the Servicing Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under the terms of the Servicing Agreement; and the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the defaulting
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

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complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents or otherwise.

         If any Event of Default shall occur, the Trustee, upon a Responsible
Officer becoming aware of the occurrence thereof, shall promptly notify the
Rating Agencies of the nature and extent of such Event of Default. The Trustee
shall immediately give written notice to the Servicer upon such Servicer's
failure to remit funds on the Remittance Date.

                   (b) On and after the time the Servicer receives a notice of
termination from the Trustee pursuant to Section 6.14(a) or the Trustee receives
the resignation of the Servicer evidenced by an Opinion of Counsel pursuant to
the applicable provisions of the Servicing Agreement, the Trustee, unless
another servicer shall have been appointed, shall be the successor in all
respects to the Servicer in its capacity as such under this Agreement and the
transactions set forth or provided for herein and shall have all the rights and
powers and be subject to all the responsibilities, duties and liabilities
relating thereto and arising thereafter placed on the Servicer under the
Servicing Agreement, including the obligation to make Advances; provided,
however, that any failure to perform such duties or responsibilities caused by
the Servicer's failure to provide information required by the Servicing
Agreement shall not be considered a default by the Trustee hereunder. In
addition, the Trustee shall have no responsibility for any act or omission of
the Servicer prior to the issuance of any notice of termination. In the
Trustee's capacity as such successor, the Trustee shall have the same
limitations on liability herein granted to the Servicer. As compensation
therefor, the Trustee shall be entitled to receive all compensation payable to
the Servicer under the Servicing Agreement, including the applicable portion of
the Servicing Fee.

                   (c) Notwithstanding the above, the Trustee may, if it shall
be unwilling to continue to so act, or shall, if it is unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution servicer, master servicer,
servicing or mortgage servicing institution having a net worth of not less than
$15,000,000 and meeting such other standards for a successor servicer as are set
forth in the Servicing Agreement, as the successor to such Servicer in the
assumption of all of the responsibilities, duties or liabilities of a servicer,
like the Servicer. Any entity designated by the Trustee as a successor servicer
may be an Affiliate of the Trustee; provided, however, that, unless such
Affiliate meets the net worth requirements and other standards set forth herein
for a successor servicer, the Trustee, in its individual capacity shall agree,
at the time of such designation, to be and remain liable to the Trust Fund for
such Affiliate's actions and omissions in performing its duties hereunder. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted to the Servicer. The Trustee
and such successor shall take such actions, consistent with this Agreement, as
shall be necessary to effectuate any such succession and may make other
arrangements with respect to the servicing to be conducted hereunder which are
not inconsistent herewith. The Trustee shall be entitled to be reimbursed from
the Servicer only if the Servicer is terminated for cause (or by the Trust Fund
if the Servicer is unable to fulfill its obligations hereunder) for all costs
associated with the transfer of servicing from the predecessor servicer,
including, without limitation, any costs or expenses associated with the
complete transfer of all servicing data and the completion, correction or

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<PAGE>

manipulation of such servicing data as may be required by the Trustee to correct
any errors or insufficiencies in the servicing data or otherwise to enable the
Trustee to service the Mortgage Loans properly and effectively. The Servicer
shall cooperate with the Trustee and any successor servicer in effecting the
termination of the Servicer's responsibilities and rights hereunder including,
without limitation, notifying Mortgagors of the assignment of the servicing
functions and providing the Trustee and successor servicer, as applicable, all
documents and records in electronic or other form reasonably requested by it to
enable it to assume the Servicer's functions hereunder and the transfer to the
Trustee or such successor servicer, as applicable, all amounts which shall at
the time be or should have been deposited by the Servicer in the Certificate
Account and any other account or fund maintained with respect to the
Certificates or thereafter be received with respect to the Mortgage Loans.
Neither the Trustee nor any other successor servicer shall be deemed to be in
default hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of the
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, (ii) the failure of the Servicer to cooperate as required by the Servicing
Agreement, (iii) the failure of the Servicer to deliver the Mortgage Loan data
to the Trustee as required by the Servicing Agreement or (iv) restrictions
imposed by any regulatory authority having jurisdiction over the Servicer.

                   (d) Notwithstanding the foregoing, the parties hereto agree
that the Trustee, in its capacity as successor Servicer, immediately will assume
all of the obligations of the Servicer to make Advances and the Trustee will
assume the other duties of the Servicer as soon as practicable, but in no event
later than 90 days after the Trustee becomes successor Servicer. Notwithstanding
the foregoing, the Trustee, in its capacity as successor Servicer, shall not be
responsible for the lack of information and/or documents that it cannot obtain
through reasonable efforts.

         Section 6.15. Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event of Default
shall not have been remedied, the Trustee, in addition to the rights specified
in Section 6.14, shall have the right, in its own name and as trustee of an
express trust, to take all actions now or hereafter existing at law, in equity
or by statute to enforce its rights and remedies and to protect the interests,
and enforce the rights and remedies, of the Certificateholders (including the
institution and prosecution of all judicial, administrative and other
proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.

         Section 6.16. Waiver of Defaults. More than 50% of the Aggregate Voting
Interests of Certificateholders may waive any default or Event of Default by the
Servicer in the performance of its obligations under the Servicing Agreement,
except that a default in the making of any required deposit to the Certificate
Account that would result in a failure of the Trustee to make any required
payment of principal of or interest on the Certificates may only be waived with
the consent of 100% of the affected Certificateholders. Upon any such waiver of
a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any

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subsequent or other default or impair any right consequent thereon except to
the extent expressly so waived.

         Section 6.17. Notification to Holders. Upon termination of the Servicer
or appointment of a successor to the Servicer, in each case as provided herein,
the Trustee shall promptly mail notice thereof by first class mail to the
Certificateholders at their respective addresses appearing on the Certificate
Register. The Trustee shall also, within 45 days after the occurrence of any
Event of Default known to a Responsible Officer of the Trustee, give written
notice thereof to Certificateholders, unless such Event of Default shall have
been cured or waived prior to the issuance of such notice and within such 45-day
period.

         Section 6.18. Directions by Certificateholders and Duties of Trustee
During Event of Default. Subject to the provisions of Section 8.01 hereof,
during the continuance of any Event of Default, Holders of Certificates
evidencing not less than 25% of the Class Principal Amount or Class Notional
Amount (or Percentage Interest) of each Class of Certificates affected thereby
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Agreement; provided, however, that the Trustee shall be
under no obligation to pursue any such remedy, or to exercise any of the trusts
or powers vested in it by this Agreement (including, without limitation, (i) the
conducting or defending of any administrative action or litigation hereunder or
in relation hereto and (ii) the terminating of the Servicer or any successor
servicer from its rights and duties as servicer under the Servicing Agreement)
at the request, order or direction of any of the Certificateholders, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the cost, expenses and liabilities which may be incurred
therein or thereby; and, provided further, that, subject to the provisions of
Section 8.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee, in accordance with an Opinion of Counsel, determines
that the action or proceeding so directed may not lawfully be taken or if the
Trustee in good faith determines that the action or proceeding so directed would
involve it in personal liability or be unjustly prejudicial to the non-assenting
Certificateholders.

         Section 6.19. Action Upon Certain Failures of the Servicer and Upon
Event of Default. In the event that the Responsible Officer of Trustee shall
have actual knowledge of any action or inaction of the Servicer that would
become an Event of Default upon the Servicer's failure to remedy the same after
notice, the Trustee shall give notice thereof to the Servicer.

                                  ARTICLE VII

                            PURCHASE AND TERMINATION
                                OF THE TRUST FUND

         Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund
Upon Purchase or Liquidation of All Mortgage Loans.

                   (a) The obligations and responsibilities of the Trustee
created hereby (other than the obligation of the Trustee to make payments to
Certificateholders as set forth in Section 7.02) shall terminate on the earlier
of (i) the final payment or other liquidation of the last Mortgage Loan
remaining in the Trust Fund and the disposition of all REO Property and (ii) the
sale of the

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property held by the Trust Fund in accordance with Section 7.01(b); provided,
however, that in no event shall the Trust Fund 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. Any termination of the
Trust Fund shall be carried out in such a manner so that the termination of each
REMIC included therein shall qualify as a "qualified liquidation" under the
REMIC Provisions.

                   (b) On any Distribution Date occurring after the date on
which the aggregate Scheduled Principal Balance of the Mortgage Loans is less
than 5% of the Cut-off Date Aggregate Principal Balance, the Servicer may, upon
15 Business Day prior written direction to the Trustee, cause (i) the Trustee to
sell (or arrange for the sale of) the assets of the Trust Fund and (ii) the
Trust Fund to adopt a plan of complete liquidation pursuant to Section
7.03(a)(i) hereof to sell all of its property. The property of the Trust Fund
shall be sold at a price (the "Termination Price") equal to: (i) 100% of the
unpaid principal balance of each Mortgage Loan on the day of such purchase plus
interest accrued thereon at the applicable Mortgage Rate with respect to any
Mortgage Loan to the Due Date in the Due Period immediately preceding the
related Distribution Date to the date of such repurchase, (ii) the fair market
value of any REO Property and any other property held by any REMIC, such fair
market value to be determined by an appraiser or appraisers appointed by the
Servicer with the consent of the Trustee and (iii) any unreimbursed Servicing
Advances with respect to each Mortgage Loan.

         Section 7.02. Procedure Upon Termination of Trust Fund.

                   (a) Notice of any termination pursuant to the provisions of
Section 7.01, specifying the Distribution Date upon which the final distribution
shall be made, shall be given promptly by the Trustee by first class mail to
Certificateholders mailed (x) no later than five Business Days after the Trustee
has received notice from the Servicer of its intent to exercise its right to
cause the termination of the Trust Fund pursuant to Section 7.01(b) or (y) upon
the final payment or other liquidation of the last Mortgage Loan or REO Property
in the Trust Fund. Such notice shall specify (A) the Distribution Date upon
which final distribution on the Certificates of all amounts required to be
distributed to Certificateholders pursuant to Section 5.02 will be made upon
presentation and surrender of the Certificates at the Corporate Trust Office,
and (B) that the Record Date otherwise applicable to such Distribution Date is
not applicable, distribution being made only upon presentation and surrender of
the Certificates at the office or agency of the Trustee therein specified. The
Trustee shall give such notice to the Servicer and the Certificate Registrar at
the time such notice is given to Holders of the Certificates. Upon any such
termination, the duties of the Certificate Registrar with respect to the
Certificates shall terminate and the Trustee shall terminate the Certificate
Account and any other account or fund maintained with respect to the
Certificates, subject to the Trustee's obligation hereunder to hold all amounts
payable to Certificateholders in trust without interest pending such payment.

                   (b) In the event that all of the Holders do not surrender
their Certificates for cancellation within three 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
one year after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to contact
the remaining Certificateholders concerning

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surrender of such Certificates, and the cost thereof shall be paid out of the
amounts distributable to such Holders. If within two years after the second
notice any Certificates shall not have been surrendered for cancellation, the
Trustee shall, subject to applicable state law relating to escheatment, hold all
amounts distributable to such Holders for the benefit of such Holders. No
interest shall accrue on any amount held by the Trustee and not distributed to a
Certificateholder due to such Certificateholder's failure to surrender its
Certificate(s) for payment of the final distribution thereon in accordance with
this Section.

                   (c) Any reasonable expenses incurred by the Trustee in
connection with any termination or liquidation of the Trust Fund shall be
reimbursed from proceeds received from the liquidation of the Trust Fund.

         Section 7.03. Additional Trust Fund Termination Requirements.

                   (a) Any termination of the Trust Fund shall be effected in
accordance with the following additional requirements, unless the Trustee seeks
(at the request of the Servicer), and subsequently receives, an Opinion of
Counsel (at the expense of the Servicer), addressed to the Trustee to the effect
that the failure of the Trust Fund to comply with the requirements of this
Section 7.03 will not (i) result in the imposition of taxes on the REMIC under
the REMIC Provisions or (ii) cause the REMIC established hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding:

                           (i) The Trustee shall sell all of the assets of the
         Trust Fund for cash and, within 90 days of such sale, shall distribute
         the proceeds of such sale to the Certificateholders in complete
         liquidation of the Trust Fund; and

                           (ii) The Trustee shall attach a statement to the
         final Federal income tax return for the REMIC stating that pursuant to
         Treasury Regulation ss. 1.860F-1, the first day of the 90-day
         liquidation period for the REMIC was the date on which the Trustee sold
         the assets of the Trust Fund.

                   (b) By its acceptance of a Residual Certificate, each Holder
thereof hereby (i) authorizes the Trustee to take the action described in
paragraph (a) above and (ii) agrees to take such other action as may be
necessary to facilitate liquidation of the REMIC created under this Agreement,
which authorization shall be binding upon all successor Residual
Certificateholders.

                                  ARTICLE VIII

                          RIGHTS OF CERTIFICATEHOLDERS

         Section 8.01. Limitation on Rights of Holders.

                   (a) The death or incapacity of any Certificateholder shall
not operate to terminate this Agreement or this Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of this
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them. Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote

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or in any manner otherwise control the operation and management of the Trust
Fund, 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.

                   (b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing 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 an Event
of Default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates evidencing not less than 25% of the Class
Principal Amount (or Class Notional Amount) of Certificates of each Class 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 cost, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for sixty
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 and
no direction inconsistent with such written request has been given such Trustee
during such sixty-day period by such Certificateholders; it being understood and
intended, and being 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 or by
availing 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, or to enforce any
right under this Agreement, except in the manner herein provided and for the
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.

         Section 8.02. Access to List of Holders.

                   (a) If the Trustee is not acting as Certificate Registrar,
the Certificate Registrar will furnish or cause to be furnished to the Trustee,
within fifteen days after receipt by the Certificate Registrar of a request by
the Trustee in writing, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Certificateholders of each Class as
of the most recent Record Date.

                   (b) If three or more Holders or Certificate Owners
(hereinafter referred to as "Applicants") apply in writing to the Trustee, and
such application states that the Applicants desire to communicate with other
Holders with respect to their rights under this Agreement or under the
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, afford such Applicants reasonable
access during the normal business hours of the Trustee to the most recent list
of Certificateholders held by the Trustee or shall, as an alternative, send, at
the Applicants' expense, the written communication proffered by the Applicants
to all Certificateholders at their addresses as they appear in the Certificate
Register.

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<PAGE>

                   (c) Every Holder or Certificate Owner, if the Holder is a
Clearing Agency, by receiving and holding a Certificate, agrees with the
Depositor, the Certificate Registrar and the Trustee that neither the Depositor,
the Certificate Registrar nor the Trustee shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.

         Section 8.03. Acts of Holders of Certificates.

                   (a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders or Certificate Owner, if the Holder is a Clearing Agency, may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee. Such
instrument or instruments (as the action embodies therein and evidenced thereby)
are herein sometimes referred to as an "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agents shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee, if made in the manner provided
in this Section.

                   (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 any notary public or other officer authorized
by law to take acknowledgments or deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his 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 (whether or not such
Certificates shall be overdue and notwithstanding any notation of ownership or
other writing thereon made by anyone other than the Trustee) shall be proved by
the Certificate Register, and neither the Trustee nor the Depositor shall be
affected by any notice to the contrary.

                   (d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by 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 thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Trustee in reliance thereon, whether or not notation of such action is made upon
such Certificate.

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                                   ARTICLE IX

                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

         Section 9.01. Trustee To Retain Possession of Certain Insurance
Policies and Documents. The Trustee shall retain possession and custody of the
originals of the Primary Mortgage Insurance Policies or certificates 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, the Trustee (or the applicable custodian 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.

         Section 9.02. Preparation of Tax Returns and Other Reports.

                   (a) The Trustee shall prepare in accordance with the
provisions of Article X, or cause to be prepared on behalf of the Trust Fund,
based upon information calculated in accordance with this Agreement pursuant to
instructions given by the Depositor, and shall file, federal tax returns and
appropriate state income tax returns and such other returns as may be required
by applicable law relating to the Trust Fund, and shall forward copies to the
Depositor of all such returns and Form 1099 information and such other
information within the control of the Trustee as the Depositor may reasonably
request in writing, and shall forward to each Certificateholder such forms and
furnish such information within the control of the Trustee as are required by
the Code and the REMIC Provisions to be furnished to them, and will prepare, to
the extent that they are familiar with applicable state requirements, and will
file, annual reports (other than tax returns), if any, required by applicable
state authorities, will file copies of this Agreement with the appropriate state
authorities as may be required by applicable law, and will prepare and
disseminate to Certificateholders Form 1099 (or otherwise furnish information
within the control of the Trustee) to the extent required by applicable law.

                   (b) The Trustee shall prepare and file with the Internal
Revenue Service ("IRS"), on behalf of the REMIC established hereby, an
application for an employer identification number on IRS Form SS-4 or by any
other acceptable method and will also file the IRS form 8811. The Trustee, upon
receipt from the IRS of the Notice of Taxpayer Identification Number Assigned,
shall promptly forward copies of such notices to the Depositor.

                   (c) Within 15 days after each Distribution Date, the Trustee
shall 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, 2002, the Trustee shall, in accordance with industry standards, file
a Form 15 Suspension Notification with respect to the Trust Fund, if applicable.
Prior to March 30, 2002, the Trustee shall prepare or cause to be prepared Form
10Ks and Form 10-Qs (f necessary), or monthly reports on Form 8-K, in substance
conforming to industry standards, on behalf of the Trust Fund as may be required
by applicable law, for filing with the Securities and Exchange Commission (the
"SEC"). The Depositor hereby grants to the Trustee a limited power of attorney
to execute and file each such document on behalf of the Depositor. Such power of

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<PAGE>

attorney shall continue until either the earlier of (i) receipt by the Trustee
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
Trustee, from time to time upon request, such further information, reports, and
financial statements within its control related to this Agreement and the
Mortgage Loans as the Trustee reasonably deems appropriate to prepare and file
all necessary reports with the SEC. The Trustee agrees to use its best
commercial efforts to seek to terminate such filing obligations after the period
during which such filings are required under the Securities and Exchange Act of
1934. The Trustee shall have no responsibility to file any items other than
those specified in this section.

         Section 9.03. Release of Mortgage Files.

                   (a) Upon receipt from the Servicer of a certification of a
Servicing Officer stating that all amounts received in connection with such
payment that are required to be deposited in the Certificate Account have been
or will be so deposited (except in the case of a Mortgage Loan as to which the
related Mortgaged Property is located in California, as to which a statement
will suffice that the Servicer reasonably expects that payment in full will be
received promptly) the Trustee or the applicable Custodian, shall promptly
release the related Mortgage File to the Servicer and the Trustee shall have no
further responsibility with regard to such Mortgage File. Upon any such payment
in full, and the Servicer, to the extent such authority is delegated to the
Servicer under the Servicing Agreement, 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 therefore 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 Certificate Account.

                   (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with Accepted Servicing
Practices and the Servicing Agreement, the Trustee shall execute such documents
as shall be prepared and furnished to the Trustee by the Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Trustee or the Custodian, shall, upon request of the
Servicer, and delivery to the Trustee or the applicable Custodian, of a trust
receipt signed by a Servicing Officer substantially in the form of Exhibit C,
release the related Mortgage File held in its possession or control to the
Servicer. Such trust receipt shall obligate the Servicer to return the Mortgage
File to the Trustee or Custodian, as applicable, when the need therefore by the
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
herein above specified, the trust receipt shall be released by the Trustee or
the Custodian, as applicable, to the Servicer.

                                   ARTICLE X

                              REMIC ADMINISTRATION

         Section 10.01. REMIC Administration.

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                   (a) As set forth in the Preliminary Statement hereto, the
Trustee shall elect REMIC status in accordance with the REMIC Provisions with
respect to the Trust Fund. The Trustee shall make such election on Form 1066 or
other appropriate federal tax or information return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued. For
the purposes of such election, each Certificate, other than the Class R
Certificate, is hereby designated as a regular interest in the REMIC. The Class
R Certificate is hereby designated as the sole residual interest in the REMIC.

                   (b) The Closing Date is hereby designated as the "Startup
Day" of the REMIC within the meaning of section 86OG(a)(9) of the Code. The
latest possible maturity date for purposes of Treasury Regulation 1.86OG-1(a)(4)
will be the Latest Possible Maturity Date.

                   (c) The Trustee shall pay any and all tax related expenses
(not including taxes) of the REMIC, including but not limited to any
professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to the REMIC that involve the Internal Revenue
Service or state tax authorities, but only to the extent that (i) such expenses
are ordinary or routine expenses, including expenses of a routine audit but not
expenses of litigation (except as described in (ii)); or (ii) such expenses or
liabilities (including taxes and penalties) are attributable to the negligence
or willful misconduct of the Trustee in fulfilling its duties hereunder
(including its duties as tax return preparer). The Trustee shall be entitled to
reimbursement of expenses to the extent provided in clause (i) above from the
Certificate Account.

                   (d) The Trustee shall prepare, sign and file, all of the
REMIC's federal and state tax and information returns as the REMIC's direct
representative. The expenses of preparing and filing such returns shall be borne
by the Trustee. If any Disqualified Organization acquires any Ownership Interest
in a Residual Certificate, then the Trustee will upon request provide to the
Internal Revenue Service, and to the persons specified in Sections 860E(e)(3)
and (6) of the Code, such information as required in Section 860D(a)(6)(B) of
the code needed to compute the tax imposed under Section 860E(e) of the Code on
transfers of residual interests to disqualified organizations. The Trustee shall
be entitled to additional compensation from such person for the cost of
providing such information.

                   (e) The Trustee shall perform on behalf of the REMIC all
reporting and other tax compliance duties that are the responsibility of the
REMIC 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, if required by the Code, the REMIC Provisions, or other such
guidance, the Trustee shall provide (i) to the Treasury or other governmental
authority such information as is necessary for the application of any tax
relating to the transfer of a Residual Certificate to any disqualified person or
organization and (ii) to the Certificateholders such information or reports as
are required by the Code or REMIC Provisions.

                   (f) The Trustee and the Holders of Certificates shall take
any action or cause the REMIC to take any action necessary to create or maintain
the status of the REMIC as a REMIC under the REMIC Provisions and shall assist
each other as necessary to create or maintain such status. Neither the Trustee
nor the Holder of any Residual Certificate shall take any action, cause the
REMIC to take any action or fail to take (or fail to cause to be taken) any
action that, under

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the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of the REMIC as a REMIC or (ii) result in the imposition of
a tax upon the REMIC (including but not limited to the tax on prohibited
transactions as defined in Code Section 860F(a)(2) and the tax on prohibited
contributions set forth on Section 860G(d) of the Code) (either such event, an
"Adverse REMIC Event") unless the Trustee has received an Opinion of Counsel (at
the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition of
such a tax. In addition, prior to taking any action with respect to the REMIC or
the assets therein, or causing the REMIC to take any action, which is not
expressly permitted under the terms of this Agreement any Holder of a Residual
Certificate will consult with the Trustee, or their respective designees, in
writing, with respect to whether such action could cause an Adverse REMIC Event
to occur with respect to the REMIC, and no such Person shall take any such
action or cause the REMIC to take any such action as to which the Trustee has
advised it in writing that an Adverse REMIC Event could occur.

                   (g) Each Holder of a Residual Certificate shall pay when due
any and all taxes imposed on the REMIC by federal or state governmental
authorities. To the extent that such Trust taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the Residual
Certificate in the REMIC or, if no such amounts are available, out of other
amounts held in the Certificate Account, and shall reduce amounts otherwise
payable to holders of regular interests in the REMIC, as the case may be.

                   (h) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to the REMIC on a calendar year and on
an accrual basis.

                   (i) No additional contributions of assets shall be made to
the REMIC, except as expressly provided in this Agreement with respect to
eligible substitute mortgage loans.

                   (j) The Trustee shall not enter into any arrangement by which
the REMIC will receive a fee or other compensation for services.

                   (k) Upon the request of any Rating Agency, the Trustee shall
deliver to such Rating Agency an Officer's Certificate stating the Trustee's
compliance with the provisions of this Section 10.01 applicable to it.

         Section 10.02. Prohibited Transactions and Activities. Neither the
Depositor nor the Trustee shall sell, dispose of, or substitute for any of the
Mortgage Loans, except in a disposition pursuant to (i) the foreclosure of a
Mortgage Loan, (ii) the bankruptcy of the Trust Fund, (iii) the termination of
the REMIC pursuant to Article VII of this Agreement, (iv) a substitution
pursuant to Article II of this Agreement or (v) a repurchase of Mortgage Loans
pursuant to Article II of this Agreement, nor acquire any assets for the REMIC,
nor sell or dispose of any investments in the Certificate Account for gain, nor
accept any contributions to the REMIC after the Closing Date, unless it has
received an Opinion of Counsel (at the expense of the party causing such sale,
disposition, or substitution) that such disposition, acquisition, substitution,
or acceptance will not (a) affect adversely the status of the REMIC as a REMIC
or of the Certificates other than the Residual Certificates as the regular
interests therein, (b) affect the distribution of interest or principal on the
Certificates, (c) result in the encumbrance of the assets transferred or
assigned to

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the Trust Fund (except pursuant to the provisions of this Agreement) or (d)
cause the REMIC to be subject to a tax on prohibited transactions or prohibited
contributions pursuant to the REMIC Provisions.

         Section 10.03. Indemnification with Respect to Certain Taxes and Loss
of REMIC Status.

                   (a) In the event that the REMIC fails to qualify as a REMIC,
loses its status as a REMIC, or incurs federal, state or local taxes as a result
of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Trustee of its duties and
obligations set forth herein, the Trustee shall indemnify the Holder of the
Residual Certificate against any and all losses, claims, damages, liabilities or
expenses ("Losses") resulting from such negligence; provided, however, that the
Trustee shall not be liable for any such Losses attributable to the action or
inaction of the Depositor, or the Holder of such Residual Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such Residual Certificate on which the Trustee has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of such Residual Certificate now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall the Trustee
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than arising
out of a negligent performance by the Trustee of its duties and obligations set
forth herein, and (3) for any special or consequential damages to
Certificateholders (in addition to payment of principal and interest on the
Certificates).

         Section 10.04. REO Property.

                   (a) Notwithstanding any other provision of this Agreement,
the Trustee hereunder, shall not (except to the extent provided in the Servicing
Agreement) permit the Servicer to, rent, lease, or otherwise earn income on
behalf of the REMIC with respect to any REO Property which might 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 REMIC of any
"income from non-permitted assets" within the meaning of section 860F(a)(2) of
the Code or any "net income from foreclosure property" which is subject to tax
under the REMIC Provisions unless the Servicer has advised the Trustee in
writing to the effect that, under the REMIC Provisions, such action would not
adversely affect the status of the REMIC as a REMIC and any income generated for
the REMIC by the REO Property would not result in the imposition of a tax upon
the REMIC.

                   (b) The Trustee shall, or (to the extent provided in the
Servicing Agreement) cause the Servicer to make reasonable efforts to sell any
REO Property for its fair market value. In any event, however, the Trustee
shall, or shall cause the Servicer to, dispose of any REO Property within three
years from the end of the calendar year of its acquisition by the Trust Fund
unless the Trustee has received a grant of extension from the Internal Revenue
Service to the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, the REMIC may hold REO Property for
a longer period without adversely affecting the REMIC status of the REMIC or
causing the imposition of a Federal or state tax upon the REMIC. If the Trustee
has received such an extension, then (a) the Trustee shall

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provide a copy of such extension to the Servicer and (b) the Trustee or the
Servicer shall continue to attempt to sell the REO Property for its fair market
value for such period longer than three years as such extension permits (the
"Extended Period"). If the Trustee has not received such an extension and the
Trustee, or the Servicer, acting on behalf of the Trustee hereunder is unable to
sell the REO Property within 33 months after its acquisition by the Trust Fund
or if the Trustee has received such an extension, and the Trustee, or the
Servicer acting on behalf of the Trustee hereunder, is unable to sell the REO
Property within the period ending three months before the close of the Extended
Period, the Servicer shall before the end of the three year period or the
Extended Period, as applicable, (i) purchase such REO Property at a price equal
to the REO Property's fair market value or (ii) auction the REO Property to the
highest bidder (which may be the Servicer) in an auction reasonably designed to
produce a fair price prior to the expiration of the three-year period or the
Extended Period, as the case may be.

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

         Section 11.01. Binding Nature of Agreement; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

         Section 11.02. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto 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. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.

         Section 11.03. Amendment.

                   (a) This Agreement may be amended from time to time by the
Depositor and the Trustee, without notice to or the consent of any of the
Holders, (i) to cure any ambiguity, (ii) to cause the provisions herein to
conform to or be consistent with or in furtherance of the statements made with
respect to the Certificates, the Trust Fund or this Agreement in any Offering
Document; or to correct or supplement any provision herein which may be
inconsistent with any other provisions herein, (iii) to make any other
provisions with respect to matters or questions arising under this Agreement or
(iv) to add, delete, or amend any provisions to the extent necessary or
desirable to comply with any requirements imposed by the Code and the REMIC
Provisions. No such amendment effected pursuant to the preceding sentence shall,
as evidenced by an Opinion of Counsel, adversely affect the status of any REMIC
created pursuant to this Agreement, nor shall such amendment effected pursuant
to clause (iii) of such sentence adversely affect in any material respect the
interests of any Holder. Prior to entering into any amendment without the
consent of Holders pursuant to this paragraph, the Trustee may require an
Opinion of Counsel (at the expense of the party requesting such amendment) to
the effect that such amendment is permitted under this paragraph. Any such
amendment shall be deemed not to adversely affect in any material respect any
Holder if the Trustee receives written confirmation from each Rating Agency that
such amendment will not cause such Rating Agency to reduce,

                                       86
<PAGE>

qualify or withdraw the then current rating assigned to the Certificates (and
any Opinion of Counsel requested by the Trustee in connection with any such
amendment may rely expressly on such confirmation as the basis therefor).

                   (b) This Agreement may also be amended from time to time by
the Depositor, and the Trustee with the consent of the Holders of not less than
66 2/3% of the Class Principal Amount (or Percentage Interest) of each Class of
Certificates affected thereby 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; provided, however, that no
such amendment shall be made unless the Trustee receives an Opinion of Counsel,
at the expense of the party requesting the change, that such change will not
adversely affect the status of the REMIC as a REMIC or cause a tax to be imposed
on the REMIC; and provided further, that no such amendment may (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 or (ii) reduce the aforesaid
percentages of Class Principal Amount (or Percentage Interest) of Certificates
of each Class, the Holders of which are required to consent to any such
amendment without the consent of the Holders of 100% of the Class Principal
Amount (or Class Notional Amount) of each Class of Certificates affected
thereby. For purposes of this paragraph, references to "Holder" or "Holders"
shall be deemed to include, in the case of any Class of Book-Entry Certificates,
the related Certificate Owners.

                   (c) Promptly after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment to
each Holder, the Depositor and to the Rating Agencies.

                   (d) It shall not be necessary for the consent of Holders
under this Section 11.03 to approve the particular form of any proposed
amendment, but 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 Holders shall be subject to such
reasonable regulations as the Trustee may prescribe.

                   (e) Notwithstanding anything to the contrary in any Servicing
Agreement, the Trustee shall not consent to any amendment of any Servicing
Agreement except pursuant to the standards provided in this Section with respect
to amendment of this Agreement.

         Section 11.04. Voting Rights. Except to the extent that the consent of
all affected Certificateholders is required pursuant to this Agreement, with
respect to any provision of this Agreement requiring the consent of
Certificateholders representing specified percentages of aggregate outstanding
Certificate Principal Amount (or Notional Amount), Certificates owned by the
Depositor, the Trustee or the Servicer or Affiliates thereof are not to be
counted so long as such Certificates are owned by the Depositor, the Trustee or
the Servicer or Affiliates thereof.

         Section 11.05. Provision of Information.

                   (a) For so long as any of the Certificates of any Series or
Class are "restricted securities" within the meaning of Rule 144(a)(3) under the
Act, each of the Depositor and the Trustee agree to cooperate with each other to
provide to any Certificateholders and to any

                                       87
<PAGE>

prospective purchaser of Certificates designated by such Certificateholder, upon
the request of such Certificateholder or prospective purchaser, any information
required to be provided to such holder or prospective purchaser to satisfy the
condition set forth in Rule 144A(d)(4) under the Act. Any reasonable,
out-of-pocket expenses incurred by the Trustee in providing such information
shall be reimbursed by the Depositor.

                   (b) The Trustee will provide to any person to whom a
Prospectus was delivered, upon the request of such person specifying the
document or documents requested, (i) a copy (excluding exhibits) of any report
on Form 8-K or Form 10-K filed with the Securities and Exchange Commission
pursuant to Section 6.20(c) and (ii) a copy of any other document incorporated
by reference in the Prospectus. Any reasonable out-of-pocket expenses incurred
by the Trustee in providing copies of such documents shall be reimbursed by the
Depositor.

                   (c) On each Distribution Date, the Trustee shall deliver or
cause to be delivered by first class mail to the Depositor, Attention: Contract
Finance, a copy of the report delivered to Certificateholders pursuant to
Section 4.03.

         Section 11.06. Governing Law. 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 WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.

         Section 11.07. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered to such party at the relevant address, facsimile number or electronic
mail address set forth below (or at such other address, facsimile number or
electronic mail address as such party may designate from time to time by written
notice in accordance with this Section 11.07): (a) in the case of the Depositor,
Structured Asset Securities Corporation, 200 Vesey Street, 12th Floor, New York,
New York 10285, Attention: Mark Zusy and (b) in the case of the Trustee, 180
East Fifth Street, St. Paul, Minnesota 55101, Attention: Corporate Trust
Services (SASCO 2001-SB1), telecopy number (651) 244-0089, or as to each party
such other address as may hereafter be furnished by such party to the other
parties in writing. Any notice required or permitted to be mailed to a Holder
shall be given by first class mail, postage prepaid, at the address of such
Holder 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, whether or not the Holder 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 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 11.09. Indulgences; No Waivers. Neither the failure nor any
delay on the part of a party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege

                                       88
<PAGE>

preclude any other or further exercise of the same or of any other right,
remedy, power or privilege, nor shall any waiver of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of such right,
remedy, power or privilege with respect to any other occurrence. No waiver shall
be effective unless it is in writing and is signed by the party asserted to have
granted such waiver.

         Section 11.10. Headings Not To Affect Interpretation. The headings
contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.

         Section 11.11. Benefits of Agreement. Nothing in this Agreement or in
the Certificates, express or implied, shall give to any Person, other than the
parties to this Agreement and their successors hereunder and the Holders of the
Certificates, any benefit or any legal or equitable right, power, remedy or
claim under this Agreement, except to the extent specified in Sections 11.14 and
11.15.

         Section 11.12. Special Notices to the Rating Agencies.

                   (a) The Depositor shall give prompt notice to the Rating
Agencies of the occurrence of any of the following events of which it has
notice:

                           (i) any amendment to this Agreement pursuant to
         Section 11.03;

                           (ii) the occurrence of any Event of Default described
         in Section 6.14;

                           (iii) any notice of termination given to the Servicer
         and any resignation of the Servicer in each case under the Servicing
         Agreement;

                           (iv) the appointment of any successor to the Servicer
         the Servicing Agreement; and

                           (v) the making of a final payment pursuant to Section
         7.02.

                   (b) All notices to the Rating Agencies provided for this
         Section shall be in writing and sent by first class mail, telecopy or
         overnight courier, as follows:

         If to Moody's, to:

         Moody's Investor Service
         99 Church Street
         New York, New York  10007
         Attention:  Residential Mortgage Surveillance

         If to S&P, to:

         Standard & Poor's Credit Market Services
         55 Water Street, 41st Floor
         New York, New York 10041

                                       89
<PAGE>

         Attn:  Residential Mortgage Surveillance

                   (c) The Trustee shall provide or make available to the Rating
Agencies reports prepared pursuant to Section 4.03. In addition, the Trustee
shall, at the expense of the Trust Fund, make available to each Rating Agency
such information as such Rating Agency may reasonably request regarding the
Certificates or the Trust Fund, to the extent that such information is
reasonably available to the Trustee.

         Section 11.13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.

         Section 11.14. Transfer of Servicing. The Seller agrees that it shall
provide written notice to the Trustee and the Servicer thirty days prior to any
transfer or assignment by the Seller of its rights under any Servicing Agreement
or of the servicing thereunder or delegation of its rights or duties thereunder
or any portion thereof to any Person other than the initial Servicer under such
Servicing Agreement; provided that the Seller shall not be required to provide
prior notice of any transfer of servicing that occurs within three months
following the Closing Date to an entity that is a Servicer on the Closing Date.
In addition, the ability of the Seller to transfer or assign its rights and
delegate its duties under any Servicing Agreement or to transfer the servicing
thereunder to a successor servicer shall be subject to the following conditions:

                   (i) Satisfaction of the conditions to such transfer as set
         forth in the Servicing Agreement including, without limitation, receipt
         of written consent of the Seller to such transfer;

                   (ii) Such successor servicer must be qualified to service
         loans for Fannie Mae or FHLMC;

                   (iii) Such successor servicer must satisfy the
         seller/servicer eligibility standards in the Servicing Agreement,
         exclusive of any experience in mortgage loan origination;

                   (iv) Such successor servicer must execute and deliver to the
         Trustee, an agreement, in form and substance reasonably satisfactory to
         the Trustee, that contains an assumption by such successor servicer of
         the due and punctual performance and observance of each covenant and
         condition to be performed and observed by the Servicer under the
         Servicing Agreement or, in the case of a transfer of servicing to a
         party that is already a Servicer pursuant to this Agreement, an
         agreement to add the related Mortgage Loans to the Servicing Agreement
         already in effect with the Servicer;

                   (v) If the successor servicer is not a Servicer of Mortgage
         Loans at the time of transfer, there must be delivered to the Trustee a
         letter from each Rating Agency to the effect that such transfer of
         servicing will not result in a qualification, withdrawal or downgrade
         of the then-current rating of any of the Certificates;

                   (vi) The Seller shall, at its cost and expense, take such
         steps, or cause the terminated Servicer to take such steps, as may be
         necessary or appropriate to effectuate

                                       90
<PAGE>

         and evidence the transfer of the servicing of the Mortgage Loans to
         such successor servicer, including, but not limited to, the following:
         (A) to the extent required by the terms of the Mortgage Loans and by
         applicable federal and state laws and regulations, the Seller shall
         cause the prior Servicer to timely mail to each obligor under a
         Mortgage Loan any required notices or disclosures describing the
         transfer of servicing of the Mortgage Loans to the successor servicer;
         (B) prior to the effective date of such transfer of servicing, the
         Seller shall cause the prior Servicer to transmit to any related
         insurer notification of such transfer of servicing; (C) on or prior to
         the effective date of such transfer of servicing, the Seller shall
         cause the prior Servicer to deliver to the successor servicer all
         Mortgage Loan Documents and any related records or materials; (D) on or
         prior to the effective date of such transfer of servicing, the Seller
         shall cause the prior Servicer to transfer to the successor servicer,
         or, if such transfer occurs after a Remittance Date but before the next
         succeeding Deposit Date, to the Servicer, all funds held by the
         Servicer in respect of the Mortgage Loans; (E) on or prior to the
         effective date of such transfer of servicing, the Seller shall cause
         the prior Servicer to, after the effective date of the transfer of
         servicing to the successor servicer, continue to forward to such
         successor servicer, within one Business Day of receipt, the amount of
         any payments or other recoveries received by the prior Servicer, and to
         notify the successor servicer of the source and proper application of
         each such payment or recovery; and (F) the Seller shall cause the prior
         Servicer to, after the effective date of transfer of servicing to the
         successor servicer, continue to cooperate with the successor servicer
         to facilitate such transfer in such manner and to such extent as the
         successor servicer may reasonably request.

         Section 11.15. Statements to Fannie Mae. On or before 12:00 noon (New
York time) on the day that is four (and in some instances three, but never less
than three) Business Days prior to the remittance date (the "Report Date"), U.S.
Bank National Association (the "Securities Administrator") shall prepare and
remit to Fannie Mae at its e-mail address at bond_admin@fanniemae.com a
statement (which statement may be satisfied by the Distribution Statement
described below) setting forth the principal, interest and balance factors for
the Certificates, for the next succeeding Distribution Date.

         On or before the Distribution Date, the Securities Administrator shall
prepare a statement as to such distribution (the "Distribution Statement"),
based substantially on information provided by the Servicer in the related
remittance reports, and shall a) send to Fannie Mae at its e-mail address at
bond_admin@fanniemae.com and b) make such statement available at its website
located at http://www.usbank.com/corp_trust/inv_info_reporting_search.html to
the Depositor, Fannie Mae, the Trustee and each Certificateholder, setting
forth:

                   (a) the class factor for each Class of Securities;

                   (b) the aggregate Scheduled Principal Balance of Pool 1, Pool
2, Pool 3 and Pool 4;

                   (c) the Available Distribution Amount, the APO Principal
Distribution Amount and the Principal Prepayment amount for such Distribution
Date;

                                       91
<PAGE>

                   (d) the amount of such distribution to the Certificateholders
of Certificates of such Class to be applied to reduce the Certificate Principal
Amount thereof, separately identifying the amounts, if any, of any payoffs,
Principal Prepayments made by the Mortgagor, Liquidation Proceeds, condemnation
proceeds, and Insurance Proceeds;

                   (e) the amount of such distribution to the Certificateholders
of such Class allocable to interest, and the Designated Rate applicable to each
Class (separately identifying (a) the amount of such interest accrued during the
calendar month preceding the month of such Distribution Date, and (b) the amount
of interest from previous calendar months;

                   (f) the amount of the Servicing Fee to be paid to each
Servicer, the Trustee's fee to be paid to the Securities Administrator, and the
security guarantee fee to be paid to the security guarantor on such Distribution
Date;

                   (g) if applicable, the aggregate amount of outstanding
Servicing Advances included in such distribution, the aggregate amount of
Servicing Advances reimbursed during the calendar month preceding the
Distribution Date and the aggregate amount of unreimbursed Servicing Advances at
the close of business on such Remittance Date;

                   (h) if applicable, the aggregate amount of outstanding
Trustee's advances included in such distribution, and the aggregate amount of
Trustee's advances reimbursed during the calendar month preceding the
Distribution Date;

                   (i) the number and aggregate Scheduled Principal Balance of
the Mortgage Loans outstanding as of the last Business Day of the calendar month
preceding such Distribution Date;

                   (j) the number and aggregate Scheduled Principal Balance of
Mortgage Loans, as reported to the Trustee by the Servicer, (i) that are
current, 30 days contractually delinquent, 60 days contractually delinquent, 90
days contractually delinquent or 120 days or more contractually delinquent),
(ii) as to which foreclosure proceedings have been commenced, and (iii) as to
which the Mortgagor is subject to a bankruptcy proceeding;

                   (k) with respect to any mortgaged property acquired on behalf
of Certificateholders through foreclosure or deed in lieu of foreclosure during
the preceding calendar month, the Scheduled Principal Balance of the related
Mortgage Loan as of the last Business Day of the calendar month preceding the
Distribution Date;

                   (l) the aggregate Security Principal Balance of each Class of
Certificate (and, in the case of any Certificate with no principal balance, the
notional amount of such Class) after giving effect to the distribution to be
made on such Distribution Date, and separately identifying any reduction thereof
on account of Realized Losses;

                   (m) the aggregate amount of (i) payoffs and Principal
Prepayments made by Mortgagors, (ii) Liquidation Proceeds, condemnation proceeds
and Insurance Proceeds, and (iii) Realized Losses incurred during the related
Prepayment Period;

                   (n) the aggregate amount of any Mortgage Loan that has been
repurchased from the Trust Fund;

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<PAGE>

                   (o) the aggregate shortfall, if any, allocated to each Class
of Certificates at the close of business on such Distribution Date;

                   (p) the Designated Rate for each Class of Certificates
applicable to such Distribution Date;

                   (q) the Senior Percentage, the Senior Prepayment Percentage,
the Subordinate Percentage and the Subordinate Prepayment Percentage, if any,
for all Classes issued by the related underlying trust for such Distribution
Date;

                   (r) in the case of a Trust with respect to which one or more
REMIC elections have been or will be made, any reports required to be provided
to the Certificateholders by the REMIC Provisions; and

                   (s) 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.

                                       93
<PAGE>

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

                                   STRUCTURED ASSET SECURITIES
                                     CORPORATION, as Depositor

                                   By: /s/ Ellen V. Kiernan
                                      -----------------------------------------
                                        Name: Ellen V. Kiernan
                                        Title:   Vice President

                                   U.S. BANK NATIONAL ASSOCIATION,
                                        as Trustee

                                   By: /s/ Eve D. Kaplan
                                      -----------------------------------------
                                        Name: Eve D. Kaplan
                                        Title:   Vice President

Solely for purposes of Sections 2.05 and 11.14,
accepted and agreed to by:

LEHMAN CAPITAL, A DIVISION OF
     LEHMAN BROTHERS HOLDINGS INC.

By: /s/ Stanley Labanowski
   ----------------------------------
     Name: Stanley Labanowski
     Title:   Senior Vice President

<PAGE>

                                    EXHIBIT A

                              FORMS OF CERTIFICATES

                                   [See Tab #]

                                      A-1

<PAGE>

                                   EXHIBIT B-1

                      FORM OF TRUSTEE INITIAL CERTIFICATION

                                                             ------------
                                                                [Date]

Structured Asset Securities Corporation
200 Vesey Street
New York, New York 10285

         RE:       Trust Agreement, dated as of June 1, 2001, (the "Trust
                   Agreement"), between Structured Asset Securities Corporation,
                   as Depositor and U.S. Bank National Association, as Trustee,
                   with respect to Structured Asset Securities Corporation
                   Mortgage Pass-Through Certificates, Series 2001-SB1

Ladies and Gentlemen:

         In accordance with Section 2.01(a) of the Trust Agreement, subject to
review of the contents thereof, the undersigned, as Trustee, hereby certifies
that it has received the documents listed in Section 2.01(b) of the Trust
Agreement for each Mortgage File pertaining to each Mortgage Loan listed on
Schedule A, to the Trust Agreement.

         Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Trust
Agreement. This Certificate is subject in all respects to the terms of Section
2.02 of the Trust Agreement and the Trust Agreement sections cross-referenced
therein.

                                   U.S. TRUST NATIONAL ASSOCIATION,
                                   as Trustee

                                   By: ________________________
                                       Name:
                                       Title:

                                      B-1

<PAGE>

                                   EXHIBIT B-2

                      FORM OF TRUSTEE INTERIM CERTIFICATION

                                                                  -------------
                                                                     [Date]

Structured Asset Securities Corporation
200 Vesey Street
New York, New York 10285

         RE:       Trust Agreement, dated as of June 1, 2001, (the "Trust
                   Agreement"), between Structured Asset Securities Corporation,
                   as Depositor, and U.S. Bank National Association, as Trustee,
                   with respect to Structured Asset Securities Corporation
                   Mortgage Pass-Through Certificates, Series 2001-SB1

Ladies and Gentlemen:

         In accordance with Section 2.02(b) of the Trust Agreement, the
undersigned, as Trustee, hereby certifies that as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or
listed on the attachment hereto) it has received:

                  (i) with respect to each Mortgage Loan, the original Mortgage
         Note endorsed without recourse in proper form to the order of the
         Trustee;

                  (ii) the original of any guarantee executed in connection with
         the Mortgage Note, assigned to the Trustee;

                  (iii) with respect to each Mortgage Loan other than a
         Cooperative Loan, the original recorded Mortgage with evidence of
         recording indicated thereon. If, in connection with any Mortgage Loan,
         the Depositor cannot deliver the Mortgage with evidence of recording
         thereon on or prior to the Closing Date because of a delay caused by
         the public recording office where such Mortgage has been delivered for
         recordation or because such Mortgage has been lost, the Depositor shall
         deliver or cause to be delivered to the Trustee (or its custodian), in
         the case of a delay due to recording, a true copy of such Mortgage,
         pending delivery of the original thereof, together with an Officer's
         Certificate of the Depositor certifying that the copy of such Mortgage
         delivered to the Trustee (or its custodian) is a true copy and that the
         original of such Mortgage has been forwarded to the public recording
         office, or, in the case of a Mortgage that has been lost, a copy
         thereof (certified as provided for under the laws of the appropriate
         jurisdiction) and a written Opinion of Counsel, memorandum of law or
         other written assurance acceptable to the Trustee and the Depositor
         that an original recorded Mortgage is not required to enforce the
         Trustee's interest in the Mortgage Loan;

                                     B-2-1

<PAGE>

                  (iv) The original of each assumption, modification or
         substitution agreement, if any, relating to the Mortgage Loans, or, as
         to any assumption, modification or substitution agreement which cannot
         be delivered on or prior to the Closing Date because of a delay caused
         by the public recording office where such assumption, modification or
         substitution agreement has been delivered for recordation, a photocopy
         of such assumption, modification or substitution agreement, pending
         delivery of the original thereof, together with an Officer's
         Certificate of the Depositor certifying that the copy of such
         assumption, modification or substitution agreement delivered to the
         Trustee (or its custodian) is a true copy and that the original of such
         agreement has been forwarded to the public recording office;

                  (v) with respect to each Non-MERS Mortgage Loan other than a
         Cooperative Loan, the original Assignment of Mortgage for each Mortgage
         Loan;

                  (vi) If applicable, such original intervening assignments of
         the Mortgage, notice of transfer or equivalent instrument (each, an
         "Intervening Assignment"), as may be necessary to show a complete chain
         of assignment from the originator, or, in the case of an Intervening
         Assignment that has been lost, a written Opinion of Counsel acceptable
         to the Trustee that such original Intervening Assignment is not
         required to enforce the Trustee's interest in the Mortgage Loans;

                  (vii) the original Primary Mortgage Insurance Policy or
         certificate, if private mortgage guaranty insurance is required;

                  (viii) with respect to each Mortgage Loan other than a
         Cooperative Loan, the original mortgagee title insurance policy or
         attorney's opinion of title and abstract of title;

                  (ix) the original of any security agreement, chattel mortgage
         or equivalent executed in connection with the Mortgage or as to any
         security agreement, chattel mortgage or their equivalent that cannot be
         delivered on or prior to the Closing Date because of a delay caused by
         the public recording office where such document has been delivered for
         recordation, a photocopy of such document, pending delivery of the
         original thereof, together with an Officer's Certificate of the
         Depositor certifying that the copy of such security agreement, chattel
         mortgage or their equivalent delivered to the Trustee (or its
         custodian) is a true copy and that the original of such document has
         been forwarded to the public recording office;

                  (x) with respect to any Cooperative Loan, the Cooperative Loan
         Documents; and

                  (xi) in connection with any pledge of Additional Collateral,
         the original additional collateral pledge and security agreement
         executed in connection therewith, assigned to the Trustee.

                                     B-2-2

<PAGE>

         The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
the attachment hereto, it has reviewed the documents listed above and has
determined that each such document appears regular on its face and appears to
relate to the Mortgage Loan identified in such document.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is qualified
in all respects by the terms of said Trust Agreement including, but not limited
to, Section 2.02(b).

                                   U.S. BANK NATIONAL ASSOCIATION,
                                   as Trustee

                                     By:_______________________________
                                     Name:
                                     Title:

                                     B-2-3

<PAGE>

                                   EXHIBIT B-3

                       FORM OF TRUSTEE FINAL CERTIFICATION

                                                                   -------------
                                                                      [Date]

Structured Asset Securities Corporation
200 Vesey Street
New York, New York 10285

         Re:      Trust Agreement, dated as of June 1, 2001, (the "Trust
                  Agreement"), between Structured Asset Securities Corporation,
                  as Depositor, and U.S. Bank National Association, as Trustee,
                  with respect to Structured Asset Securities Corporation
                  Mortgage Pass-Through Certificates, Series 2001-SB1

Ladies and Gentlemen:

         In accordance with Section 2.02(d) of the Trust Agreement, the
undersigned, as Trustee, hereby certifies that as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or
listed on the attachment hereto) it has received the applicable documents listed
in Section 2.02(b) of the Trust Agreement.

         The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
the attachment hereto, it has reviewed the documents listed above and has
determined that each such document appears to be complete and, based on an
examination of such documents, the information set forth in the Mortgage Loan
Schedule is correct.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is qualified
in all respects by the terms of said Trust Agreement.

                                   U.S. BANK NATIONAL ASSOCIATION,
                                   as Trustee

                                   By:________________________________
                                     Name:
                                     Title:

                                     B-3-1

<PAGE>

                                   EXHIBIT B-4

                               FORM OF ENDORSEMENT

         Pay to the order of U.S. Bank National Association, as trustee (the
"Trustee") under the Trust Agreement dated as of June 1, 2001, between
Structured Asset Securities Corporation, as Depositor and the Trustee relating
to Structured Asset Securities Corporation Mortgage Pass-Through Certificates,
Series 2001-SB1, without recourse.

                         --------------------------------------
                              [current signatory on note]

                         By:___________________________________
                              Name:
                              Title:

                                    B-4-1

<PAGE>
                                    EXHIBIT C

                  REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT

                                                                    ----------
                                                                       Date

[Addressed to Trustee
or, if applicable, custodian]

         In connection with the administration of the mortgages held by you as
Trustee under a certain Trust Agreement dated as of June 1, 2001 between
Structured Asset Securities Corporation, as Depositor and you, as Trustee (the
"Trust Agreement"), the undersigned Servicer hereby requests a release of the
Mortgage File held by you as Trustee with respect to the following described
Mortgage Loan for the reason indicated below.

         Mortgagor's Name:

         Address:

         Loan No.:

         Reason for requesting file:

         1. Mortgage Loan paid in full. (The Servicer hereby certifies that all
amounts received in connection with the loan have been or will be credited to
the Certificate Account (pursuant to the Trust Agreement.)

         2. The Mortgage Loan is being foreclosed.

         3. Mortgage Loan substituted. (The Servicer hereby certifies that a
Qualifying Substitute Mortgage Loan has been assigned and delivered to you along
with the related Mortgage File pursuant to the Trust Agreement.)

         4. Mortgage Loan repurchased. (The Servicer hereby certifies that the
Purchase Price has been credited to the Certificate Account (whichever is
applicable) pursuant to the Trust Agreement.)

         5. Other. (Describe)

         6. California Mortgage Loan expected to be paid in full.

         The undersigned acknowledges that the above Mortgage File will be held
by the undersigned in accordance with the provisions of the Trust Agreement and
will be returned to you within ten (10) days of our receipt of the Mortgage
File, except if the Mortgage Loan has

                                      C-1

<PAGE>

been paid in full, or repurchased or substituted for a Qualifying Substitute
Mortgage Loan (in which case the Mortgage File will be retained by us
permanently) and except if the Mortgage Loan is being foreclosed or is a
California Mortgage Loan specified in #6 above (in which case the Mortgage File
will be returned when no longer required by us for such purpose).

         Capitalized terms used herein shall have the meanings ascribed to them
in the Trust Agreement.

                                -------------------------------------
                                     [Name of Servicer]

                                By:__________________________________
                                     Name:
                                     Title: Servicing Officer

                                      C-2

<PAGE>

                                   EXHIBIT D-1

          FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)

STATE OF                            )
                                    )  ss.:
COUNTY OF                           )

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

         1. That he [she] is [title of officer] ________________________ of
[name of Purchaser] _________________________________________ (the "Purchaser"),
a _______________________ [description of type of entity] duly organized and
existing under the laws of the [State of __________] [United States], on behalf
of which he [she] makes this affidavit.

         2. That the Purchaser's Taxpayer Identification Number is
______________.

         3. That the Purchaser is not a "disqualified organization" within the
meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code") and will not be a "disqualified organization" as of
__________________ [date of transfer], and that the Purchaser is not acquiring a
Residual Certificate (as defined in the Agreement) for the account of, or as
agent (including a broker, nominee, or other middleman) for, any person or
entity from which it has not received an affidavit substantially in the form of
this affidavit. For these purposes, a "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of any
of the foregoing (other than an instrumentality if all of its activities are
subject to tax and a majority of its board of directors is not selected by such
governmental entity), any cooperative organization furnishing electric energy or
providing telephone service to persons in rural areas as described in Code
Section 1381(a)(2)(C), any "electing large partnership" within the meaning of
Section 775 of the Code, or any organization (other than a farmers' cooperative
described in Code Section 521) that is exempt from federal income tax unless
such organization is subject to the tax on unrelated business income imposed by
Code Section 511.

         4. That the Purchaser either (x) is not, and on __________________
[date of transfer] will not be, an employee benefit plan subject to Section 406
or Section 407 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Code, the trustee of any such plan or
a person acting on behalf of any such plan or investing the assets of any such
plan to acquire a Residual Certificate; (y) is an insurance company that is
purchasing the Certificate with funds contained in an "insurance company general
account" as defined in Section V(e) of Prohibited Transaction Class Exemption
("PTCE") 95-60 and the purchase and holding of the Certificate are covered under
Section I and III of PTCE 95-60; or (z) herewith delivers to the Trustee and
shall deliver to the Depositor an opinion of counsel (a "Benefit Plan Opinion")
satisfactory to the Trustee and the Depositor, and upon which the Trustee and
the Depositor shall be entitled to rely, to the effect that the purchase or
holding of

                                     D-1-1

<PAGE>

such Residual Certificate by the Investor will not result in the assets of the
Trust Fund being deemed to be plan assets and subject to the prohibited
transaction provisions of ERISA or the Code and will not subject the Trustee or
the Depositor to any obligation in addition to those undertaken by such entities
in the Trust Agreement, which opinion of counsel shall not be an expense of the
Trustee or the Depositor.

         5. That the Purchaser hereby acknowledges that under the terms of the
Trust Agreement (the "Agreement") between Structured Asset Securities
Corporation, as Depositor, and U.S. Bank National Association, as Trustee, dated
as of June 1, 2001, no transfer of a Residual Certificate shall be permitted to
be made to any person unless the Depositor and the Trustee have received a
certificate from such transferee containing the representations in paragraphs 3,
4 and 5 hereof.

         6. That the Purchaser does not hold REMIC residual securities as
nominee to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations (such
entity, a "Book-Entry Nominee").

         7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to such Residual Certificate, and that the Purchaser has
provided financial statements or other financial information requested by the
transferor in connection with the transfer of the Residual Certificate in order
to permit the transferor to assess the financial capability of the Purchaser to
pay such taxes.

         8. That the Purchaser will not transfer a Residual Certificate to any
person or entity (i) as to which the Purchaser has actual knowledge that the
requirements set forth in paragraph 3, paragraph 6 or paragraph 10 hereof are
not satisfied or that the Purchaser has reason to believe does not satisfy the
requirements set forth in paragraph 7 hereof, and (ii) without obtaining from
the prospective Purchaser an affidavit substantially in this form and providing
to the Trustee a written statement substantially in the form of Exhibit G to the
Agreement.

         9. That the Purchaser understands that, as the holder of a Residual
Certificate, the Purchaser may incur tax liabilities in excess of any cash flows
generated by the interest and that it intends to pay taxes associated with
holding such Residual Certificate as they become due.

         10. That the Purchaser (i) is a U.S. Person or (ii) is a Non-U.S.
Person that holds a Residual Certificate in connection with the conduct of a
trade or business within the United States and has furnished the transferor and
the Trustee with an effective Internal Revenue Service Form W-8 ECI (Certificate
of Foreign Person's Claim for exception From Withholding on Income Effectively
Connected with the Conduct of a Trade or Business in the United States) or
successor form at the time and in the manner required by the Code. "Non-U.S.
Person" means any person other than (i) a citizen or resident of the United
States; (ii) a corporation (or entity treated as a corporation for tax purposes)
created or organized in the United States or under the laws of the United States
or of any state thereof, including, for this purpose, the District of Columbia;
(iii) a partnership (or entity treated as a partnership for tax purposes)
organized in the United States or under the laws of the United States or of any
state thereof, including, for this purpose, the District of Columbia (unless
provided otherwise by future Treasury regulations);

                                     D-1-2

<PAGE>

(iv) an estate whose income is includible in gross income for United States
income tax purposes regardless of its source; (v) 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 U.S. Persons have authority to control all substantial
decisions of the trust; (vi) and, to the extent provided in Treasury
regulations, certain trusts in existence prior to August 20, 1996 that are
treated as United States persons prior to such date and elect to continue to be
treated as United States persons.

         11. That the Purchaser agrees to such amendments of the Trust
Agreement as may be required to further effectuate the restrictions on transfer
of any Residual Certificate to such a "disqualified organization," an agent
thereof, a Book-Entry Nominee, or a person that does not satisfy the
requirements of paragraph 7 and paragraph 10 hereof.

         12. That the Purchaser consents to the designation of the Trustee as
its agent to act as "tax matters person" of the Trust Fund pursuant to the Trust
Agreement.

                                     D-1-3

<PAGE>

         IN WITNESS WHEREOF, the Purchaser 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 Purchaser]

                           By:___________________________________
                                Name:
                                Title:

                  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 Purchaser, 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 Purchaser.

                  Subscribed and sworn before me this _____ day of __________,
20__.

NOTARY PUBLIC

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

COUNTY OF_____________________

STATE OF_______________________

My commission expires the _____ day of __________, 20__.

                                     D-1-4

<PAGE>

                                   EXHIBIT D-2

          FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)

                                                         ------------------
                                                                Date

                  Re:      Structured Asset Securities Corporation
                           Mortgage Pass-Through Certificates
                           Series 2001-SB1
                           ------------------------------------------------

                  _______________________ (the "Transferor") has reviewed the
attached affidavit of _____________________________ (the "Transferee"), and has
no actual knowledge that such affidavit is not true and has no reason to believe
that the information contained in paragraph 7 thereof is not true, and has no
reason to believe that the Transferee has the intention to impede the assessment
or collection of any federal, state or local taxes legally required to be paid
with respect to a Residual Certificate. In addition, the Transferor has
conducted a reasonable investigation at the time of the transfer and found that
the Transferee had historically paid its debts as they came due and found no
significant evidence to indicate that the Transferee will not continue to pay
its debts as they become due.

                                      Very truly yours,

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

                                     D-2-1

<PAGE>

                                    EXHIBIT E

                               SERVICING AGREEMENT

                                  [See Tab # ]

                                      E-1

<PAGE>

                                    EXHIBIT F

                     FORM OF RULE 144A TRANSFER CERTIFICATE

         Re:      Structured Asset Securities Corporation
                  Mortgage Pass-Through Certificates
                  Series 2001-SB1
                  ------------------------------------------------

                  Reference is hereby made to the Trust Agreement dated as of
June 1, 2001 (the "Trust Agreement") between Structured Asset Securities
Corporation, as Depositor, and U.S. Bank National Association, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Trust Agreement.

                  This letter relates to $_________ initial Certificate
Principal Amount of Class Certificates which are held in the form of Definitive
Certificates registered in the name of (the "Transferor"). The Transferor has
requested a transfer of such Definitive Certificates for Definitive Certificates
of such Class registered in the name of [insert name of transferee].

                  In connection with such request, and in respect of such
Certificates, the Transferor hereby certifies that such Certificates are being
transferred in accordance with (i) the transfer restrictions set forth in the
Trust Agreement and the Certificates and (ii) Rule 144A under the Securities Act
to a purchaser that the Transferor reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A purchasing for its own
account or for the account of a "qualified institutional buyer", which purchaser
is aware that the sale to it is being made in reliance upon Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction.

                  This certificate and the statements contained herein are made
for your benefit and the benefit of the Placement Agent and the Depositor.

                               ----------------------------------------
                                    [Name of Transferor]

                               By:_____________________________________
                                    Name:
                                    Title:

Dated: __________________, ________

                                      F-1

<PAGE>

                                    EXHIBIT G

                         FORM OF PURCHASER'S LETTER FOR
                        INSTITUTIONAL ACCREDITED INVESTOR

                                                             ------------------
                                                                    Date

Dear Sirs:

         In connection with our proposed purchase of $______________ principal
amount of Mortgage Pass-Through Certificates, Series 2001-SB1 (the "Privately
Offered Certificates") of Structured Asset Securities Corporation (the
"Depositor") which are held in the form of Definitive Certificates, we confirm
that:

(1)      We understand that the Privately Offered Certificates have not been,
         and will not be, registered under the Securities Act of 1933, as
         amended (the "Securities Act"), and may not be sold except as permitted
         in the following sentence. We agree, on our own behalf and on behalf of
         any accounts for which we are acting as hereinafter stated, that if we
         should sell any Privately Offered Certificates within two years of the
         later of the date of original issuance of the Privately Offered
         Certificates or the last day on which such Privately Offered
         Certificates are owned by the Depositor or any affiliate of the
         Depositor (which includes the Placement Agent) we will do so only (A)
         to the Depositor, (B) to "qualified institutional buyers" (within the
         meaning of Rule 144A under the Securities Act) in accordance with Rule
         144A under the Securities Act ("QIBs"), (C) pursuant to the exemption
         from registration provided by Rule 144 under the Securities Act, or (D)
         to an institutional "accredited investor" within the meaning of Rule
         501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act
         that is not a QIB (an "Institutional Accredited Investor") which, prior
         to such transfer, delivers to the Trustee under the Trust Agreement
         dated as of June 1, 2001 between the Depositor and U.S. Bank National
         Association, as Trustee (the "Trustee"), a signed letter in the form of
         this letter; and we further agree, in the capacities stated above, to
         provide to any person purchasing any of the Privately Offered
         Certificates from us a notice advising such purchaser that resales of
         the Privately Offered Certificates are restricted as stated herein.

(2)      We understand that, in connection with any proposed resale of any
         Privately Offered Certificates to an Institutional Accredited Investor,
         we will be required to furnish to the Trustee and the Depositor a
         certification from such transferee in the form hereof to confirm that
         the proposed sale is being made pursuant to an exemption from, or in a
         transaction not subject to, the registration requirements of the
         Securities Act. We further understand that the Privately Offered
         Certificates purchased by us will bear a legend to the foregoing
         effect.

                                      G-1

<PAGE>

(3)      We are acquiring the Privately Offered Certificates for investment
         purposes and not with a view to, or for offer or sale in connection
         with, any distribution in violation of the Securities Act. We have such
         knowledge and experience in financial and business matters as to be
         capable of evaluating the merits and risks of our investment in the
         Privately Offered Certificates, and we and any account for which we are
         acting are each able to bear the economic risk of such investment.

(4)      We are an Institutional Accredited Investor and we are acquiring the
         Privately Offered Certificates purchased by us for our own account or
         for one or more accounts (each of which is an Institutional Accredited
         Investor) as to each of which we exercise sole investment discretion.

(5)      We have received such information as we deem necessary in order to
         make our investment decision.

(6)      If we are acquiring ERISA-Restricted Certificates, we understand that
         in accordance with ERISA, the Code and the Exemption, no Plan and no
         person acting on behalf of such a Plan may acquire such Certificate
         except in accordance with Section 3.03(d) of the Trust Agreement.

         Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Trust Agreement.

                                      G-2

<PAGE>

         You and the Depositor are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.

                                  Very truly yours,

                                  ----------------------------------
                                       [Purchaser]

                                  By________________________________
                                       Name:
                                       Title:

                                      G-3

<PAGE>

                                    EXHIBIT H

                       [FORM OF ERISA TRANSFER AFFIDAVIT]

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

                  The undersigned, being first duly sworn, deposes and says as
follows:

         1. The undersigned is the ______________________ of (the "Investor"), a
[corporation duly organized] and existing under the laws of __________, on
behalf of which he makes this affidavit.

         2. The Investor either (x) is not, and on ___________ [date of
transfer] will not be, an employee benefit plan subject to Section 406 or
Section 407 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"), the trustee of any such plan or a person acting on behalf of any such
plan or investing the assets of any such plan; (y) if the Certificate has been
the subject of an ERISA-Qualifying Underwriting, is an insurance company that is
purchasing the Certificate with funds contained in an "insurance company general
account" as defined in Section V(e) of Prohibited Transaction Class Exemption
("PTCE") 95-60 and the purchase and holding of the Certificate are covered under
Section I and III of PTCE 95-60; or (z) herewith delivers to the Trustee and
shall deliver to the Depositor an opinion of counsel (a "Benefit Plan Opinion")
satisfactory to the Trustee and the Depositor, and upon which the Trustee and
the Depositor shall be entitled to rely, to the effect that the purchase or
holding of such Certificate by the Investor will not result in the assets of the
Trust Fund being deemed to be plan assets and subject to the prohibited
transaction provisions of ERISA or the Code and will not subject the Trustee or
the Depositor to any obligation in addition to those undertaken by such entities
in the Trust Agreement, which opinion of counsel shall not be an expense of the
Trustee or the Depositor.

         3. The Investor hereby acknowledges that under the terms of the Trust
Agreement (the "Agreement") between Structured Asset Securities Corporation, as
Depositor and U.S. Bank National Association, as Trustee, dated as of June 1,
2001, no transfer of the ERISA-Restricted Certificates shall be permitted to be
made to any person unless the Depositor and Trustee have received a certificate
from such transferee in the form hereof.

                                      H-1

<PAGE>

                  IN WITNESS WHEREOF, the Investor has caused this instrument to
be executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this ____ day of _______________, 20__.

                            ----------------------------------------
                                 [Investor]

                            By:_____________________________________
                                 Name:
                                 Title:

ATTEST:

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

STATE OF                            )
                                    )  ss.:
COUNTY OF                           )

                  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 the _________________ of the Investor, and
acknowledged 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

                            My commission expires the
                            ____ day of __________,
                            20__.

                                      H-2

<PAGE>

                                    EXHIBIT I

                            MONTHLY REMITTANCE ADVICE

                                      I-1

<PAGE>

                                    EXHIBIT J

                      MONTHLY ELECTRONIC DATA TRANSMISSION

                                      J-1

<PAGE>

                                    EXHIBIT K

                              CUSTODIAL AGREEMENTS

                               [See Tabs # and #]

                                      K-1

<PAGE>

                                    EXHIBIT L

                                   [RESERVED].

                                      L-1

<PAGE>

                                    EXHIBIT M

                                   [RESERVED].

                                      M-1

<PAGE>

                                   EXHIBIT N-1

                          FORM OF TRANSFER CERTIFICATE
                  FOR TRANSFER FROM RESTRICTED GLOBAL SECURITY
                         TO REGULATION S GLOBAL SECURITY
                      (Transfers pursuant to ss. 3.03(h)(B)
                                of the Agreement)
      --------------------------------------------------------------------

         Re:      Structured Asset Securities Corporation Mortgage Loan Trust
                  Mortgage Pass-Through Certificates, Series 2001-SB1

         Reference is hereby made to the Trust Agreement (the "Agreement")
between Structured Asset Securities Corporation, as Depositor and U.S. Bank
National Association, as Trustee (the "Trustee"), dated as of June 1, 2001.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Agreement.

         This letter relates to U.S. $ aggregate principal amount of Securities
which are held in the form of a Restricted Global Security with DTC in the name
of [name of transferor] (the "Transferor") to effect the transfer of the
Securities in exchange for an equivalent beneficial interest in a Regulation S
Global Security.

         In connection with such request, the Transferor does hereby certify
that such transfer has been effected in accordance with the transfer
restrictions set forth in the Agreement and the Securities and in accordance
with Rule 904 of Regulation S, and that:

                  a. the offer of the Securities was not made to a person in the
                  United States;

                  b. at the time the buy order was originated, the transferee
                  was outside the United States or the Transferor and any person
                  acting on its behalf reasonably believed that the transferee
                  was outside the United States;

                  c. no directed selling efforts have been made in contravention
                  of the requirements of Rule 903 or 904 of Regulation S, as
                  applicable;

                  d. the transaction is not part of a plan or scheme to evade
                  the registration requirements of the United States Securities
                  Act of 1933, as amended; and

                  e. the transferee is not a U.S. person (as defined in
                  Regulation S).

         You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.

                                      N-1

<PAGE>

                                                     --------------------------
                                                     [Name of Transferor]

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

Date:                                   ,
     -----------------------------------  ------

                                      N-2

<PAGE>

                                   EXHIBIT N-2

                    FORM OF TRANSFER CERTIFICATE FOR TRANSFER
                        FROM REGULATION S GLOBAL SECURITY
                          TO RESTRICTED GLOBAL SECURITY
                      (Transfers pursuant to ss. 3.03(h)(C)
                                of the Agreement)
      ---------------------------------------------------------------------

         Re:      Structured Asset Securities Corporation Mortgage Pass-Through
                  Certificates, Series 2001-SB1

         Reference is hereby made to the Trust Agreement (the "Agreement")
between Structured Asset Securities Corporation, as Depositor and U.S. Bank
National Association, as Trustee, dated as of June 1, 2001. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Agreement.

         This letter relates to U.S. $ aggregate principal amount of Securities
which are held in the form of a Regulations S Global Security in the name of
[name of transferor] (the "Transferor") to effect the transfer of the Securities
in exchange for an equivalent beneficial interest in a Restricted Global
Security.

         In connection with such request, and in respect of such Securities, the
Transferor does hereby certify that such Securities are being transferred in
accordance with (i) the transfer restrictions set forth in the Agreement and the
Securities and (ii) Rule 144A under the United States Securities Act of 1933, as
amended, to a transferee that the Transferor reasonably believes is purchasing
the Securities for its own account or an account with respect to which the
transferee exercises sole investment discretion, the transferee and any such
account is a qualified institutional buyer within the meaning of Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction.

                                -----------------------------------------------
                                [Name of Transferor]

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

Date:                         ,
     -------------------------  ------

                                     N-2-1

<PAGE>

                                   SCHEDULE A

                               ALL MORTGAGE LOANS

                               (by Mortgage Pool)

       [To be retained at the Washington, D.C. office of McKee Nelson LLP]

                                    Sch A-1

<PAGE>

                                   SCHEDULE B

                      MORTGAGE LOANS WITH RETAINED INTEREST

       [To be retained at the Washington, D.C. office of McKee Nelson LLP]

                                    Sch A-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}]]