Document:

AMERIQUEST MORTGAGE SECURITIES INC.

                                    Depositor

                           AMERIQUEST MORTGAGE COMPANY

                                 Master Servicer

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY

                                     Trustee

                   ___________________________________________

                         POOLING AND SERVICING AGREEMENT
                            Dated as of July 1, 2003
                    _________________________________________

                     Asset-Backed Pass-Through Certificates

                                  Series 2003-7

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SECTION                                                                     PAGE
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                                TABLE OF CONTENTS

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.01.   Defined Terms..................................................9
SECTION 1.02.   Allocation of Certain Interest Shortfalls.....................50
SECTION 1.03    Rights of the NIMS Insurer....................................51

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

SECTION 2.01.   Conveyance of Mortgage Loans..................................52
SECTION 2.02.   Acceptance of REMIC I by the Trustee..........................54
SECTION 2.03.   Repurchase or Substitution of Mortgage Loans by the
                Originator or the Depositor; Payment of Prepayment
                Charge Payment Amounts........................................55
SECTION 2.04.   [Reserved]....................................................59
SECTION 2.05.   Representations, Warranties and Covenants of the
                Master Servicer...............................................59
SECTION 2.06.   Issuance of the REMIC I Regular Interests and the
                Class R-I Interest............................................61
SECTION 2.07.   Conveyance of the REMIC I Regular Interests;
                Acceptance of REMIC II by the Trustee.........................62
SECTION 2.08.   Issuance of Class R Certificates..............................62
SECTION 2.09.   Conveyance of the Class M-2 Interest; Acceptance of
                REMIC III by the Trustee......................................62
SECTION 2.10.   Conveyance of the Class M-3 Interest; Acceptance of
                REMIC IV by the Trustee.......................................62
SECTION 2.11.   Conveyance of the Class M-4 Interest; Acceptance of
                REMIC V by the Trustee........................................63
SECTION 2.12.   Conveyance of the Class M-4 Interest; Acceptance of
                REMIC VI by the Trustee.......................................63
SECTION 2.13.   Conveyance of the Class CE Interest; Acceptance of
                REMIC VII by the Trustee......................................63
SECTION 2.14.   Conveyance of the Class P Interest; Acceptance of
                REMIC VIII by the Trustee.....................................64
SECTION 2.15.   Issuance of Class R-X Certificates............................64

                                      -ii-

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SECTION                                                                     PAGE
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                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

SECTION 3.01.   Master Servicer to Act as Master Servicer.....................65
SECTION 3.02.   Collection of Certain Mortgage Loan Payments..................67
SECTION 3.03.   [Reserved]....................................................68
SECTION 3.04.   Collection Account, Escrow Account and Distribution
                Account.......................................................68
SECTION 3.05.   Permitted Withdrawals From the Collection Account, Escrow
                Account and Distribution Account..............................71
SECTION 3.06.   Investment of Funds in the Collection Account, the Escrow
                Account, the REO Account and the Distribution Account.........75
SECTION 3.07.   Payment of Taxes, Insurance and Other Charges.................76
SECTION 3.08.   Maintenance of Hazard Insurance...............................76
SECTION 3.09.   Maintenance of Mortgage Blanket Insurance.....................77
SECTION 3.10.   Fidelity Bond; Errors and Omissions Insurance.................78
SECTION 3.11.   Enforcement of Due-On-Sale Clauses; Assumption
                Agreements....................................................78
SECTION 3.12.   Realization Upon Defaulted Mortgage Loans.....................79
SECTION 3.13.   Title, Management and Disposition of REO Property.............81
SECTION 3.14.   [Reserved]....................................................84
SECTION 3.15.   Reports of Foreclosure and Abandonment of
                Mortgaged Properties..........................................84
SECTION 3.16.   Optional Purchase of Defaulted Mortgage Loans.................84
SECTION 3.17.   Trustee to Cooperate; Release of Mortgage Files...............85
SECTION 3.18.   Servicing Compensation........................................86
SECTION 3.19.   Statement as to Compliance....................................87
SECTION 3.20.   Independent Public Accountants' Servicing Report..............87
SECTION 3.21.   Access to Certain Documentation...............................88
SECTION 3.22.   [Reserved]....................................................88
SECTION 3.23.   Advance Facility..............................................88

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

SECTION 4.01.   Distributions.................................................90
SECTION 4.02.   Statements to Certificateholders..............................96
SECTION 4.03.   Remittance Reports and Other Reports to the Trustee;
                Advances; Payments in Respect of Prepayment
                Interest Shortfalls...........................................99
SECTION 4.04.   Allocation of Realized Losses................................101

                                     -iii-

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SECTION                                                                     PAGE
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SECTION 4.05.   Compliance with Withholding Requirements.....................103
SECTION 4.06.   Commission Reporting.........................................103
SECTION 4.07.   [Reserved]...................................................104
SECTION 4.08.   [Reserved]...................................................104
SECTION 4.09.   [Reserved]...................................................104
SECTION 4.10    Net WAC Rate Carryover Reserve Account.......................104

                                    ARTICLE V

                                THE CERTIFICATES

SECTION 5.01.   The Certificates.............................................106
SECTION 5.02.   Registration of Transfer and Exchange of Certificates........108
SECTION 5.03.   Mutilated, Destroyed, Lost or Stolen Certificates............113
SECTION 5.04.   Persons Deemed Owners........................................113
SECTION 5.05.   Certain Available Information................................113

                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

SECTION 6.01.   Liability of the Depositor and the Master Servicer...........115
SECTION 6.02.   Merger or Consolidation of the Depositor or the
                Master Servicer..............................................115
SECTION 6.03.   Limitation on Liability of the Depositor, the Master
                Servicer and Others..........................................115
SECTION 6.04.   Limitation on Resignation of the Master Servicer.............116
SECTION 6.05.   Rights of the Depositor in Respect of the Master Servicer....117
SECTION 6.06.   Sub-Servicing Agreements Between the Master
                Servicer and Sub-Servicers...................................118
SECTION 6.07.   Successor Sub-Servicers......................................119
SECTION 6.08.   Liability of the Master Servicer.............................120
SECTION 6.09.   No Contractual Relationship Between Sub-Servicers and the
                NIMS Insurer, the Trustee or Certificateholders..............120
SECTION 6.10.   Assumption or Termination of Sub-Servicing
                Agreements by Trustee........................................120
SECTION 6.11.   Sub-Servicing Accounts.......................................121

                                   ARTICLE VII

                                     DEFAULT

SECTION 7.01.   Master Servicer Events of Default............................122
SECTION 7.02.   Trustee to Act; Appointment of Successor.....................124

                                      -iv-

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SECTION                                                                     PAGE
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SECTION 7.03.   Notification to Certificateholders...........................127
SECTION 7.04.   Waiver of Master Servicer Events of Default..................127

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

SECTION 8.01.   Duties of Trustee............................................127
SECTION 8.02.   Certain Matters Affecting the Trustee........................128
SECTION 8.03.   The Trustee Not Liable for Certificates or Mortgage Loans....130
SECTION 8.04.   Trustee May Own Certificates.................................130
SECTION 8.05.   Trustee's Fees and Expenses..................................130
SECTION 8.06.   Eligibility Requirements for Trustee.........................131
SECTION 8.07.   Resignation and Removal of the Trustee.......................131
SECTION 8.08.   Successor Trustee............................................132
SECTION 8.09.   Merger or Consolidation of Trustee...........................132
SECTION 8.10.   Appointment of Co-Trustee or Separate Trustee................133
SECTION 8.11.   Appointment of Custodians....................................134
SECTION 8.12.   Appointment of Office or Agency..............................134
SECTION 8.13.   Representations and Warranties of the Trustee................134

                                   ARTICLE IX

                                   TERMINATION

SECTION 9.01    Termination Upon Repurchase or Liquidation of All
                Mortgage Loans...............................................135
SECTION 9.02    Additional Termination Requirements..........................137

                                    ARTICLE X

                                REMIC PROVISIONS

SECTION 10.01.  REMIC Administration.........................................139
SECTION 10.02.  Prohibited Transactions and Activities.......................142
SECTION 10.03.  Master Servicer and Trustee Indemnification..................142

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

SECTION 11.01.  Amendment....................................................143
SECTION 11.02.  Recordation of Agreement; Counterparts.......................144
SECTION 11.03.  Limitation on Rights of Certificateholders...................144

                                       -v-

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SECTION                                                                     PAGE
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SECTION 11.04.  Governing Law................................................145
SECTION 11.05.  Notices......................................................145
SECTION 11.06.  Severability of Provisions...................................146
SECTION 11.07.  Notice to Rating Agencies and the NIMS Insurer...............146
SECTION 11.08.  Article and Section References...............................147
SECTION 11.09.  Grant of Security Interest...................................147
SECTION 11.10   Third Party Rights...........................................148
SECTION 11.11   NIMS Insurer's Rights........................................148

                                      -vi-

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EXHIBITS

Exhibit A-1    Form of Class A Certificate
Exhibit A-2    Form of Class M-1 Certificate
Exhibit A-3    Form of Class M-2 Certificate
Exhibit A-4    Form of Class M-3 Certificate
Exhibit A-5    Form of Class M-4 Certificate
Exhibit A-6    Form of Class M-5 Certificate
Exhibit A-7    Form of Class CE Certificate
Exhibit A-8    Form of Class P Certificate
Exhibit A-9    Form of Class R Certificate
Exhibit A-10   Form of Class R-X Certificate
Exhibit B      Form of Lost Note Affidavit
Exhibit C-1    Form of Trustee's Initial Certification
Exhibit C-2    Form of Trustee's Final Certification
Exhibit C-3    Form of Trustee's Receipt of Mortgage Note
Exhibit D      Form of Mortgage Loan Purchase Agreement
Exhibit E      Request for Release
Exhibit F-1    Form of Transferor Representation Letter and Form of Transferee
               Representation Letter in Connection with Transfer of Class CE
               and Class P Certificates Pursuant to Rule 144A Under the 1933 Act
Exhibit F-2    Form of Transfer Affidavit and Agreement and Form of Transferor
               Affidavit in Connection with Transfer of Residual Certificates
Exhibit G      Form of Certification with respect to ERISA and the Code
Exhibit H      Form of Cap Contract Exhibit I Loss Mitigation Action Plan
Exhibit J-1    Form of Certification to Be Provided by the Depositor with Form
               10-K
Exhibit J-2    Form of Certification to Be Provided to Depositor by the Trustee
Exhibit K      Form of Special Sub-Servicing Agreement Exhibit L Statement as to
               Compliance

Schedule 1     Mortgage Loan Schedule
Schedule 2     Prepayment Charge Schedule

                                      -vii-

<PAGE>

                  This Pooling and Servicing Agreement, is dated and effective
as of July 1, 2003, among AMERIQUEST MORTGAGE SECURITIES INC., as Depositor,
AMERIQUEST MORTGAGE COMPANY, as Master Servicer and DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee.

                             PRELIMINARY STATEMENT:

                  The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
each REMIC (as defined herein) created hereunder. The Trust Fund will consist of
a segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement.

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (other than any Master Servicer Prepayment Charge Payment
Amounts, the Net WAC Rate Carryover Reserve Account and the Cap Contract)
subject to this Agreement as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC I." The Class R-I
Interest will be the sole class of "residual interests" in REMIC I for purposes
of the REMIC Provisions (as defined herein). The following table irrevocably
sets forth the designation, the REMIC I Remittance Rate, the initial
Uncertificated Balance and, solely for purposes of satisfying Treasury
regulation section 1.860G- 1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC I Regular Interests (as defined herein). None of the REMIC I
Regular Interests will be certificated.

                    REMIC I                 Initial             Latest Possible
Designation     Remittance Rate      Uncertificated Balance     Maturity Date(1)
-----------     ---------------      ----------------------     ----------------
  I-LTAA          Variable(2)           $588,000,647.70          June 25, 2033
   I-LTA          Variable(2)           $  4,950,000.00          June 25, 2033
  I-LTM1          Variable(2)           $    360,000.00          June 25, 2033
  I-LTM2          Variable(2)           $    300,000.00          June 25, 2033
  I-LTM3          Variable(2)           $    165,000.00          June 25, 2033
  I-LTM4          Variable(2)           $     75,000.00          June 25, 2033
  I-LTM5          Variable(2)           $     75,000.00          June 25, 2033
  I-LTZZ          Variable(2)           $  6,075,013.22          June 25, 2033
   I-LTP          Variable(2)           $        100.00          June 25, 2033
________________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loan with the latest maturity date has been designated as
     the "latest possible maturity date" for each REMIC I Regular Interest.
(2)  Calculated in accordance with the definition of "REMIC I Remittance Rate"
     herein.

<PAGE>

                                    REMIC II
                                    --------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II." The Class R-II Interest will evidence the sole class
of "residual interests" in REMIC II for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial aggregate Certificate Principal
Balance or Uncertificated Balance and, solely for purposes of satisfying
Treasury regulation section 1.860G-1(a)(4)(iii), the "latest possible maturity
date" for the indicated Classes of Certificates and REMIC II Regular Interests.

                                        Initial Aggregate
                                     Certificate Principal
                      Pass-Through   Balance/Uncertificated     Latest Possible
    Designation           Rate               Balance            Maturity Date(1)
------------------    ------------   ----------------------     ----------------
      Class A          Variable(2)      $495,000,000.00          June 25, 2033
     Class M-1         Variable(2)      $ 36,000,000.00          June 25, 2033
Class M-2 Interest     Variable(2)      $ 30,000,000.00          June 25, 2033
Class M-3 Interest     Variable(2)      $ 16,500,000.00          June 25, 2033
Class M-4 Interest     Variable(2)       $ 7,500,000.00          June 25, 2033
Class M-5 Interest     Variable(2)       $ 7,500,000.00          June 25, 2033
 Class CE Interest     Variable(3)       $ 7,500,660.92          June 25, 2033
 Class P Interest         N/A(4)            $ 100.00             June 25, 2033
________________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for each Class of Certificates and
     REMIC II Regular Interests.
(2)  Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3)  The Class CE Interest will accrue interest at its variable Pass-Through
     Rate on the Notional Amount of the Class CE Interest outstanding from time
     to time which shall equal the Uncertificated Balance of the REMIC I Regular
     Interests. The Class CE Interest will not accrue interest on its
     Uncertificated Balance.
(4)  The Class P Interest will not accrue interest.

                                       -2-

<PAGE>

                                    REMIC III
                                    ---------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Class M-2 Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC III." The Class R-III Interest will evidence the sole class
of "residual interests" in REMIC III for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the Class M-2
Certificates.

                                       Initial Aggregate
                                     Certificate Principal      Latest Possible
Designation      Pass-Through Rate          Balance            Maturity Date(1)
------------     -----------------   ---------------------     ----------------
 Class M-2          Variable(2)          $30,000,000.00          June 25, 2033
________________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for each Class of Certificates and
     REMIC III Regular Interests.
(2)  The Class M-2 Certificates will receive 100% of amounts received in respect
     of the Class M-2 Interest.

                                       -3-

<PAGE>

                                    REMIC IV
                                    --------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Class M-3 Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC IV." The Class R-IV Interest will evidence the sole class
of "residual interests" in REMIC IV for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the Class M-3
Certificates.

                                       Initial Aggregate
                                     Certificate Principal      Latest Possible
 Designation     Pass-Through Rate          Balance            Maturity Date(1)
------------     -----------------   ---------------------     -----------------
  Class M-3         Variable(2)          $16,500,000.00          June 25, 2033
________________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for each Class of Certificates and
     REMIC IV Regular Interests.
(2)  The Class M-3 Certificates will receive 100% of amounts received in respect
     of the Class M-3 Interest.

                                       -4-

<PAGE>

                                     REMIC V
                                     -------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Class M-4 Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC V." The Class R-V Interest will evidence the sole class of
"residual interests" in REMIC V for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the Class M-4
Certificates.

                                       Initial Aggregate
                                     Certificate Principal      Latest Possible
Designation     Pass-Through Rate           Balance            Maturity Date(1)
-----------     -----------------    ---------------------     -----------------
 Class M-4         Variable(2)           $7,500,000.00           June 25, 2033
________________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for each Class of Certificates and
     REMIC V Regular Interests.
(2)  The Class M-4 Certificates will receive 100% of amounts received in respect
     of the Class M-4 Interest.

                                       -5-

<PAGE>

                                    REMIC VI
                                    --------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Class M-5 Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC VI." The Class R-VI Interest will evidence the sole class
of "residual interests" in REMIC VI for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the Class M-5
Certificates.

                                      Initial Aggregate
                                    Certificate Principal        Latest Possible
Designation    Pass-Through Rate           Balance              Maturity Date(1)
-----------    -----------------    ---------------------       ----------------
 Class M-5        Variable(2)           $7,500,000.00             June 25, 2033
________________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for each Class of Certificates and
     REMIC VI Regular Interests.
(2)  The Class M-5 Certificates will receive 100% of amounts received in respect
     of the Class M-5 Interest.

                                       -6-

<PAGE>

                                    REMIC VII
                                    ---------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Class CE Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC VII." The Class R-VII Interest will evidence the sole class
of "residual interests" in REMIC VII for purposes of the REMIC Provisions under
federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the Class CE
Certificates.

                                        Initial Aggregate
                                      Certificate Principal     Latest Possible
Designation      Pass-Through Rate           Balance           Maturity Date(1)
-----------      -----------------    ---------------------    -----------------
 Class CE           Variable(2)           $7,500,660.92          June 25, 2033
________________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for each Class of Certificates and
     REMIC VII Regular Interests.
(2)  The Class CE Certificates will receive 100% of amounts received in respect
     of the Class CE Interest.

                                       -7-

<PAGE>

                                   REMIC VIII
                                   ----------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Class P Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC VIII." The Class R-VIII Interest will evidence the sole
class of "residual interests" in REMIC VIII for purposes of the REMIC Provisions
under federal income tax law. The following table irrevocably sets forth the
designation, the Pass-Through Rate, the initial aggregate Certificate Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for the Class P
Certificates.

                                       Initial Aggregate
                                     Certificate Principal      Latest Possible
Designation     Pass-Through Rate           Balance            Maturity Date(1)
-----------     -----------------    ---------------------     -----------------
  Class P             N/A(2)                $ 100.00             June 25, 2033
________________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for each Class of Certificates and
     REMIC VIII Regular Interests.
(2)  The Class P Certificates will receive 100% of amounts received in respect
     of the Class P Interest.

                  As of the Cut-off Date, the Mortgage Loans had an aggregate
Scheduled Principal Balance equal to $600,000,760.92.

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

                                       -8-

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01. Defined Terms.

                  Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months and all calculations on each Regular Interest shall be made
on the basis of a 360-day year and the actual number of days in the month.

                  "Accrued Certificate Interest": With respect to any Class of
Certificates (other than the Class P Certificates and the Residual Certificates)
and each Distribution Date, interest accrued during the related Interest Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution Date
on the Certificate Principal Balance, in the case of the Class A Certificates
and the Mezzanine Certificates, or on the Notional Amount, in the case of the
Class CE Certificates, of such Certificate immediately prior to such
Distribution Date. The Class P Certificates are not entitled to distributions in
respect of interest and, accordingly, will not accrue interest. All
distributions of interest on the Class A Certificates and the Mezzanine
Certificates will be calculated on the basis of a 360-day year and the actual
number of days in the applicable Interest Accrual Period. All distributions of
interest on the Class CE Certificates will be based on a 360-day year consisting
of twelve 30-day months. Accrued Certificate Interest with respect to each
Distribution Date, as to any Class A Certificate, Mezzanine Certificate or Class
CE Certificate, shall be reduced by an amount equal to the portion allocable to
such Certificate pursuant to Section 1.02 hereof of the sum of (a) the aggregate
Prepayment Interest Shortfall, if any, for such Distribution Date to the extent
not covered by payments pursuant to Section 4.03(e) or allocated to the Class CE
Certificates and (b) the aggregate amount of any Relief Act Interest Shortfall,
if any, for such Distribution Date to the extent not allocated to the Class CE
Certificates. In addition, Accrued Certificate Interest with respect to each
Distribution Date, as to any Class CE Certificate, shall be reduced by an amount
equal to the portion allocable to such Class CE Certificate of Realized Losses,
if any, pursuant to Section 4.04 hereof.

                  "Adjustment Date": With respect to each adjustable-rate
Mortgage Loan, the first day of the month in which the Mortgage Rate of such
Mortgage Loan changes pursuant to the related Mortgage Note. The first
Adjustment Date following the Cut-off Date as to each adjustable-rate Mortgage
Loan is set forth in the Mortgage Loan Schedule.

                  "Advance": As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer in respect of any Distribution Date
representing the aggregate of all payments of principal and interest, net of the
Servicing Fee, that were due during the related Due Period on the Mortgage Loans
and that were delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure as
determined pursuant to Section 4.03.

                                       -9-

<PAGE>

                  "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.

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

                  "Applicable Regulations": As to any Mortgage Loan, all
federal, state and local laws, statutes, rules and regulations applicable
thereto.

                  "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom if applicable,
the mortgage recordation information which has not been returned by the
applicable recorder's office and/or the assignee's name), which is sufficient
under the laws of the jurisdiction wherein the related Mortgaged Property is
located to reflect of record the sale of the Mortgage.

                  "Available Funds": With respect to any Distribution Date, an
amount equal to (1) the sum of (a) the aggregate of the amounts on deposit in
the Collection Account and Distribution Account as of the close of business on
the related Determination Date, (b) the aggregate of any amounts received in
respect of an REO Property withdrawn from any REO Account and deposited in the
Distribution Account for such Distribution Date pursuant to Section 3.13, (c)
the aggregate of any amounts deposited in the Distribution Account by the Master
Servicer in respect of Prepayment Interest Shortfalls for such Distribution Date
pursuant to Section 4.03(e), (d) the aggregate of any Advances made by the
Master Servicer for such Distribution Date pursuant to Section 4.03 and (e) the
aggregate of any advances made by the successor Master Servicer or the Trustee
for such Distribution Date pursuant to Section 7.02(b), reduced (to not less
than zero) by (2) the sum of (x) the portion of the amount described in clause
(1)(a) above that represents (i) Monthly Payments on the Mortgage Loans received
from a Mortgagor on or prior to the Determination Date but due during any Due
Period subsequent to the related Due Period, (ii) Principal Prepayments on the
Mortgage Loans received after the related Prepayment Period (together with any
interest payments received with such Principal Prepayments to the extent they
represent the payment of interest accrued on the Mortgage Loans during a period
subsequent to the related Prepayment Period), (iii) Liquidation Proceeds and
Insurance Proceeds received in respect of the Mortgage Loans after the related
Prepayment Period, (iv) amounts reimbursable or payable to the Depositor, the
Master Servicer, the Trustee, the Originator or any Sub-Servicer pursuant to
Section 3.05 or Section 3.06 or otherwise payable in respect of Extraordinary
Trust Fund Expenses, (v) Stayed Funds, (vi) the Trustee Fee payable from the
Distribution Account pursuant to Section 8.05, (vii) amounts deposited in the
Collection Account or the Distribution Account in error and (viii) the amount of
any Prepayment Charges collected by the Master Servicer and the amount of any
Master Servicer Prepayment Charge Payment Amounts and (y) amounts reimbursable
to the Trustee for an advance made pursuant to Section 7.02(b) which advance the
Trustee has determined to be nonrecoverable from the Stayed Funds in respect of
which it was made.

                                      -10-

<PAGE>

                  "Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.

                  "Bankruptcy Loss": With respect to any Mortgage Loan, a
Realized Loss resulting from a Deficient Valuation or Debt Service Reduction.

                  "Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee. Initially, the Book-Entry Certificates
will be the Class A Certificates and the Mezzanine Certificates.

                  "Book-Entry Custodian": The custodian appointed pursuant to
Section 5.01.

                  "Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan institutions in the State of
California, the State of New York, or in the city in which the Corporate Trust
Office of the Trustee is located, are authorized or obligated by law or
executive order to be closed.

                  "Cap Contract": The cap contract between Deutsche Bank
National Trust Company, as Trustee and the counterparty thereunder, which is for
the benefit of the Holders of the Class A Certificates, a form of which is
attached hereto as Exhibit H.

                  "Certificate": Any one of the Depositor's Asset-Backed
Pass-Through Certificates, Series 2003-7, Class A, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class CE, Class P, Class R and Class R-X, issued
under this Agreement.

                  "Certificate Factor": With respect to any Class of Regular
Certificates as of any Distribution Date, a fraction, expressed as a decimal
carried to six places, the numerator of which is the aggregate Certificate
Principal Balance (or the Notional Amount, in the case of the Class CE
Certificates) of such Class of Certificates on such Distribution Date (after
giving effect to any distributions of principal and allocations of Realized
Losses in reduction of the Certificate Principal Balance (or the Notional
Amount, in the case of the Class CE Certificates) of such Class of Certificates
to be made on such Distribution Date, and the denominator of which is the
initial aggregate Certificate Principal Balance (or the Notional Amount, in the
case of the Class CE Certificates) of such Class of Certificates as of the
Closing Date.

                  "Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Master Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee and the NIMS Insurer may
conclusively rely upon a certificate of the Depositor or the Master Servicer in
determining whether a Certificate is held by an Affiliate thereof. All
references herein to "Holders" or "Certificateholders" shall reflect the rights
of Certificate Owners as they may indirectly exercise such rights through the
Depository and

                                      -11-

<PAGE>

participating members thereof, except as otherwise specified herein; provided,
however, that the Trustee and the NIMS Insurer shall be required to recognize as
a "Holder" or "Certificateholder" only the Person in whose name a Certificate is
registered in the Certificate Register.

                  "Certificate Margin": With respect to the Class A Certificates
and the Mezzanine Certificates and for purposes of the Marker Rate for the
specified REMIC I Regular Interest, as follows:

  Class            REMIC I Regular Interest              Certificate Margin
  -----            ------------------------              ------------------
                                                          (1)           (2)
    A           REMIC I Regular Interest I-LTA          0.350%        0.700%
   M-1          REMIC I Regular Interest I-LTM1         0.850%        1.275%
   M-2          REMIC I Regular Interest I-LTM2         1.950%        2.925%
   M-3          REMIC I Regular Interest I-LTM3         3.300%        4.950%
   M-4          REMIC I Regular Interest I-LTM4         3.750%        5.625%
   M-5          REMIC I Regular Interest I-LTM5         3.750%        5.625%
              ____________
              (1) For each Distribution Date through and including the Optional
                  Termination Date.
              (2) For each Distribution Date thereafter.

                  "Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent.

                  "Certificate Principal Balance": With respect to each Class A
Certificate, Mezzanine Certificate or Class P Certificate as of any date of
determination, the Certificate Principal Balance of such Certificate on the
Distribution Date immediately prior to such date of determination, minus all
distributions allocable to principal made thereon and in the case of a Mezzanine
Certificate, Realized Losses allocated thereto on such immediately prior
Distribution Date (or, in the case of any date of determination up to and
including the first Distribution Date, the initial Certificate Principal Balance
of such Certificate, as stated on the face thereof). With respect to each Class
CE Certificate as of any date of determination, an amount equal to the
Percentage Interest evidenced by such Certificate times the excess, if any, of
(A) the then aggregate Uncertificated Balances of the REMIC I Regular Interests
over (B) the then aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates and the Class P Certificates then
outstanding.

                  "Certificate Register" and "Certificate Registrar": The
register maintained and the registrar appointed pursuant to Section 5.02.

                  "Class": Collectively, all of the Certificates bearing the
same class designation.

                  "Class A Certificate": Any one of the Class A Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-1 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                                      -12-

<PAGE>

                  "Class A Principal Distribution Amount" With respect to any
Distribution Date, the excess of (x) the Certificate Principal Balance of the
Class A Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 65.00% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
$3,000,003.80.

                  "Class CE Certificate": Any one of the Class CE Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-7 and
evidencing a Regular Interest in REMIC VII for purposes of the REMIC Provisions.

                  "Class CE Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class CE Certificates,
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-2 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), and (ii)
the Certificate Principal Balance of the Class M-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
77.00% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus $3,000,003.80.

                  "Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-3 and
evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.

                  "Class M-2 Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class CE Certificates,
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                                      -13-

<PAGE>

                  "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (iii) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 87.00% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
$3,000,003.80.

                  "Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-4 and
evidencing a Regular Interest in REMIC IV for purposes of the REMIC Provisions.

                  "Class M-3 Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class M-3 Certificates,
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date) and (iv) the Certificate
Principal Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 92.50% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus $3,000,003.80.

                  "Class M-4 Certificate": Any one of the Class M-4 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-5 and
evidencing a Regular Interest in REMIC V for purposes of the REMIC Provisions.

                                      -14-

<PAGE>

                  "Class M-4 Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class M-4 Certificates,
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-4 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), and (v)
the Certificate Principal Balance of the Class M-4 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
95.00% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus $3,000,003.80.

                  "Class M-5 Certificate": Any one of the Class M-5 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6 and
evidencing a Regular Interest in REMIC VI for purposes of the REMIC Provisions.

                  "Class M-5 Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class M-5 Certificates,
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class M-5 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), and (vi) the Certificate Principal Balance of the Class M-5
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 97.50% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due

                                      -15-

<PAGE>

during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus $3,000,003.80.

                  "Class P Certificate": Any one of the Class P Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-8, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC VIII.

                  "Class P Interest": An uncertificated interest in the Trust
Fund held by the Trustee on behalf of the Holders of the Class P Certificates,
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

                  "Class R Certificate": Any one of the Class R Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-9 and
evidencing the ownership of the Class R-I Interest and the Class R-II Interest.

                  "Class R-X Certificate": Any one of the Class R-X Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-10 and
evidencing the ownership of the Class R-III Interest, Class R-IV Interest, Class
R-V Interest, Class R-VI Interest, Class R-VII Interest, and the Class R-VIII
Interest.

                  "Class R-I Interest": The uncertificated Residual Interest in
REMIC I.

                  "Class R-II Interest": The uncertificated Residual Interest in
REMIC II.

                  "Class R-III Interest": The uncertificated Residual Interest
in REMIC III.

                  "Class R-IV Interest": The uncertificated Residual Interest in
REMIC IV.

                  "Class R-V Interest": The uncertificated Residual Interest in
REMIC V.

                  "Class R-VI Interest": The uncertificated Residual Interest in
REMIC VI.

                  "Class R-VII Interest": The uncertificated Residual Interest
in REMIC VII.

                  "Class R-VIII Interest": The uncertificated Residual Interest
in REMIC VIII.

                  "Closing Date": July 3, 2003.

                  "Code":  The Internal Revenue Code of 1986.

                                      -16-

<PAGE>

                  "Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.04(a), which shall be
entitled "Ameriquest Mortgage Company, as Master Servicer for Deutsche Bank
National Trust Company, as Trustee, in trust for the registered holders of
Ameriquest Mortgage Securities Inc., Asset-Backed Pass-Through Certificates,
Series 2003-7." The Collection Account must be an Eligible Account.

                  "Commission": The Securities and Exchange Commission.

                  "Compensating Interest": As defined in Section 4.03(e) hereof.

                  "Corporate Trust Office": The principal corporate trust office
of the Trustee, as the case may be, at which at any particular time its
corporate trust business in connection with this Agreement shall be
administered, which office with respect to the Trustee, at the date of the
execution of this instrument is located at 1761 East St. Andrew Place, Santa
Ana, CA 92705-4934, or at such other address as the Trustee may designate from
time to time by notice to the Certificateholders, the Depositor and the Master
Servicer.

                  "Corresponding Certificate": With respect to (A)(i) REMIC I
Regular Interest I-LTA, (ii) REMIC I Regular Interest I-LTM1, (iii) the Class
M-2 Interest and REMIC I Regular Interest I- LTM2, (iv) the Class M-3 Interest
and REMIC I Regular Interest I-LTM3, (v) the Class M-4 Interest and REMIC I
Regular Interest I-LTM4, (vi) the Class M-5 Interest and REMIC I Regular
Interest I-LTM5, (vii) the Class P Interest and REMIC I Regular Interest I-LTP
and (viii) the Class CE Interest (B)(i) the Class A Certificates, (ii) the Class
M-1 Certificates, (iii) the Class M-2 Certificates, (iv) the Class M-3
Certificates,(v) the Class M-4 Certificates, (vi) the Class M-5 Certificates,
(vii) Class P Certificates and (viii) Class CE Certificates, respectively.

                  "Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, calculated after taking into account
distributions of principal on the Mortgage Loans and distribution of the
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date, the numerator of which is the sum of the
aggregate Certificate Principal Balances of the Mezzanine Certificates and the
Class CE Certificates, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period).

                  "Cumulative Loss Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Realized Losses incurred from the Cut-off Date to the last
day of the preceding calendar month and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  "Custodian": A Custodian, which shall initially be Deutsche
Bank National Trust Company.

                  "Cut-off Date": With respect to any Mortgage Loan, the close
of business on July 1, 2003. With respect to all Qualified Substitute Mortgage
Loans, their respective dates of

                                      -17-

<PAGE>

substitution. References herein to the "Cut-off Date," when used with respect to
more than one Mortgage Loan, shall be to the respective Cut-off Dates for such
Mortgage Loans.

                  "Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.

                  "Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding Stated Principal Balance of the
Mortgage Loan, which valuation results from a proceeding initiated under the
Bankruptcy Code.

                  "Definitive Certificates": As defined in Section 5.01(b).

                  "Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.

                  "Delinquency Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate Stated Principal Balance of all Mortgage Loans as of the last day of
the previous calendar month that, as of such last day of the previous calendar
month, are 60 or more days delinquent (measured under the OTS delinquency
calculation methodology), are in foreclosure, have been converted to REO
Properties or have been discharged by reason of bankruptcy, and the denominator
of which is the aggregate Stated Principal Balance of the Mortgage Loans and REO
Properties as of the last day of the previous calendar month; provided, however,
that any Mortgage Loan purchased by the Master Servicer or the NIMS Insurer
pursuant to Section 3.16 shall not be included in either the numerator or the
denominator for purposes of calculating the Delinquency Percentage.

                  "Depositor": Ameriquest Mortgage Securities Inc., a Delaware
corporation, or its successor in interest.

                  "Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository, for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
CEDE & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.

                  "Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated P-1 by Moody's, F-1 by Fitch and A-1 by S&P (or comparable ratings if
Moody's, Fitch and S&P are not the Rating Agencies).

                                      -18-

<PAGE>

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

                  "Determination Date": With respect to each Distribution Date,
the 10th day of the calendar month in which such Distribution Date occurs or, if
such 10th day is not a Business Day, the Business Day immediately preceding such
10th day.

                  "Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I other than
through an Independent Contractor; provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.

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

                  "Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.04(e) which shall be
entitled "Deutsche Bank National Trust Company, as Trustee, in trust for the
registered holders of Ameriquest Mortgage Securities Inc., Asset-Backed
Pass-Through Certificates, Series 2003-7." The Distribution Account must be an
Eligible Account.

                  "Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the next succeeding Business Day, commencing in
August 2003.

                  "Due Date": With respect to each Distribution Date, the first
day of the calendar month in which such Distribution Date occurs, which is the
day of the month on which the Monthly Payment is due on a Mortgage Loan,
exclusive of any days of grace.

                                      -19-

<PAGE>

                  "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 related Due Date.

                  "Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution or trust company the short-term
unsecured debt obligations of which are rated P-1 by Moody's, F-1 by Fitch and
A-1 by S&P (or comparable ratings if Moody's, Fitch and S&P are not the Rating
Agencies) at the time any amounts are held on deposit therein, (ii) an account
or accounts the deposits in which are fully insured by the FDIC or (iii) a trust
account or accounts maintained with the corporate trust department of a federal
or state chartered depository institution or trust company acting in its
fiduciary capacity. Eligible Accounts may bear interest.

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

                  "Escrow Account": The account or accounts created and
maintained pursuant to Section 3.04(c).

                  "Escrow Payments": The amounts constituting taxes, and/or fire
and hazard insurance premiums escrowed by the Mortgagor with the mortgagee
pursuant to a voluntary escrow agreement related to any Mortgage Loan.

                  "Estate in Real Property": A fee simple estate or leasehold
estate in a parcel of land.

                  "Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date
(calculated for this purpose only after assuming that 100% of the Principal
Remittance Amount on such Distribution Date has been distributed) over (ii) the
Overcollateralization Target Amount for such Distribution Date.

                  "Expense Adjusted Net Mortgage Rate": With respect to any
Mortgage Loan (or the related REO Property), as of any date of determination, a
per annum rate of interest equal to the applicable Mortgage Rate thereon as of
the first day of the month preceding the month in which the Distribution Date
occurs minus the sum of (i) the Trustee Fee Rate, (ii) the Servicing Fee Rate
and (iii) the Special Servicing Fee Rate, if applicable.

                  "Expense Adjusted Maximum Mortgage Rate": With respect to any
Mortgage Loan (or the related REO Property), as of any date of determination, a
per annum rate of interest equal to the applicable Maximum Mortgage Rate (or the
Mortgage Rate for such Mortgage Loan in the case of any fixed-rate Mortgage
Loans) as of the first day of the month preceding the month in which the
Distribution Date occurs minus the sum of (i) the Trustee Fee Rate, (ii) the
Servicing Fee Rate and (iii) the Special Servicing Fee Rate, if applicable.

                  "Extraordinary Trust Fund Expense": Any amounts reimbursable
to the Trustee, or any director, officer, employee or agent of the Trustee, from
the Trust Fund pursuant to Section 8.05, any amounts payable from the
Distribution Account in respect of taxes pursuant to Section

                                      -20-

<PAGE>

10.01(g)(iii) and any amounts payable by the Trustee for the recording of the
assignments of mortgage pursuant to Section 2.01.

                  "Fannie Mae": Fannie Mae, formally known as the Federal
National Mortgage Association, or any successor thereto.

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

                  "Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Originator, the Depositor or the Master Servicer pursuant to or
as contemplated by Section 2.03, Section 3.16(a) or Section 9.01), a
determination made by the Master Servicer that all Insurance Proceeds,
Liquidation Proceeds and other payments or recoveries which the Master Servicer,
in its reasonable good faith judgment, expects to be finally recoverable in
respect thereof have been so recovered. The Master Servicer shall maintain
records, prepared by a Servicing Officer, of each Final Recovery Determination
made thereby.

                  "Fitch": Fitch Ratings, or its successor in interest.

                  "Formula Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine Certificates, the lesser of (i) LIBOR plus the
related Certificate Margin and (ii) the Maximum Cap Rate.

                  "Freddie Mac": Freddie Mac, formally known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.

                  "Gross Margin": With respect to each adjustable-rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note that is added
to the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note to determine the Mortgage Rate for such adjustable-rate Mortgage
Loan.

                  "Indenture": An indenture relating to the issuance of notes
which may or may not be guaranteed by the NIMS Insurer.

                  "Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer, the Originator and their respective Affiliates, (b) does not have any
direct financial interest in or any material indirect financial interest in the
Depositor, the Originator, the Master Servicer or any Affiliate thereof, and (c)
is not connected with the Depositor, the Originator, the Master Servicer or any
Affiliate thereof as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions; provided, however,
that a Person shall not fail to be Independent of the Depositor, the Originator,
the Master Servicer or any Affiliate thereof merely because such Person is the
beneficial owner of 1% or less of any class of securities issued by the
Depositor or the Master Servicer or any Affiliate thereof, as the case may be.

                                      -21-

<PAGE>

                  "Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an "independent contractor" with respect to
REMIC I within the meaning of Section 856(d)(3) of the Code if such REMIC were a
real estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as such REMIC
does not receive or derive any income from such Person and provided that the
relationship between such Person and such REMIC is at arm's length, all within
the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other
Person (including the Master Servicer) if the Trustee has received an Opinion of
Counsel to the effect that the taking of any action in respect of any REO
Property by such Person, subject to any conditions therein specified, that is
otherwise herein contemplated to be taken by an Independent Contractor will not
cause such REO Property to cease to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.

                  "Index": With respect to each adjustable-rate Mortgage Loan
and each related Adjustment Date, the average of the interbank offered rates for
six-month United States dollar deposits in the London market as published in THE
WALL STREET JOURNAL and as most recently available as of the first business day
45 days or more prior to such Adjustment Date, as specified in the related
Mortgage Note.

                  "Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy, covering a Mortgage Loan, to the extent such
proceeds are not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing mortgage loans held for its own
account, subject to the terms and conditions of the related Mortgage Note and
Mortgage.

                  "Interest Accrual Period": With respect to any Distribution
Date and the Class A Certificates and the Mezzanine Certificates, the period
commencing on the Distribution Date in the month immediately preceding the month
in which such Distribution Date occurs (or, in the case of the first
Distribution Date, commencing on the Closing Date) and ending on the day
preceding such Distribution Date. With respect to any Distribution Date and the
Class CE Certificates and the REMIC I Regular Interests, the one-month period
ending on the last day of the calendar month preceding the month in which such
Distribution Date occurs.

                  "Interest Carry Forward Amount": With respect to any
Distribution Date and any Class of Class A Certificates or Mezzanine
Certificates, the sum of (i) the amount, if any, by which (a) the Interest
Distribution Amount for such Class of Certificates as of the immediately
preceding Distribution Date exceeded (b) the actual amount distributed on such
Class of Certificates in respect of interest on such immediately preceding
Distribution Date and (ii) the amount of any Interest Carry Forward Amount for
such Class of Certificates remaining unpaid from the previous Distribution Date,
plus accrued interest on such sum calculated at the related Pass-Through Rate
for the most recently ended Interest Accrual Period.

                  "Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates, the Class M-2 Interest, the Class M-3
Interest, the Class M-4 Interest, the

                                      -22-

<PAGE>

Class M-5 Interest and solely for purposes of calculating the Marker Rate, REMIC
I Regular Interest I-LTA, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4 and REMIC I regular Interest I-LTM5 and any Interest Accrual Period
therefor, the second London Business Day preceding the commencement of such
Interest Accrual Period.

                  "Interest Distribution Amount": With respect to any
Distribution Date and any Class A Certificate, any Mezzanine Certificate and any
Class CE Certificate, the aggregate Accrued Certificate Interest on the
Certificates of such Class for such Distribution Date.

                   "Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date that represents interest received or advanced on the Mortgage Loans.

                  "Late Collections": With respect to any Mortgage Loan and any
Due Period, all amounts received subsequent to the Determination Date
immediately following such Due Period, whether as late payments of Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.

                  "Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage
Loan is removed from REMIC I by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.16(a) or Section 9.01.
With respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from REMIC I by reason of its being purchased pursuant to
Section 9.01.

                  "Liquidation Proceeds": The amount (other than Insurance
Proceeds or amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the Master Servicer in connection with (i) the
taking of all or a part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage
Loan through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.13, Section 3.16(a) or Section
9.01.

                  "Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the Stated
Principal Balance of the related Mortgage Loan at such date and the denominator
of which is the Value of the related Mortgaged Property.

                  "London Business Day": Any day on which banks in the City of
London are open and conducting transactions in United States dollars.

                                      -23-

<PAGE>

                  "Loss Mitigation Action Plan": The policies and procedures set
forth in Exhibit I hereto relating to the realization on delinquent Mortgage
Loans, which are incorporated by reference into this Agreement shall be deemed a
part hereof.

                  "Lost Note Affidavit": With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost, misplaced or
destroyed and has not been replaced, an affidavit from the Originator certifying
that the original Mortgage Note has been lost, misplaced or destroyed (together
with a copy of the related Mortgage Note) and indemnifying the Trust Fund
against any loss, cost or liability resulting from the failure to deliver the
original Mortgage Note in the form of Exhibit B hereto.

                  "Marker Rate": With respect to the Class CE Interest and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the REMIC I Remittance Rate for REMIC I Regular Interest I-LTA, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I- LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5 and REMIC I Regular Interest I-LTZZ, with the rate on each such REMIC I
Regular Interest (other than REMIC I Regular Interest I-LTZZ) subject to the
related Formula Rate for the purpose of this calculation for such Distribution
Date and with the rate on REMIC I Regular Interest I-LTZZ subject to a cap of
zero for the purpose of this calculation: provided, however, that solely for
this purpose, calculations of the REMIC I Remittance Rate and the related caps
with respect to REMIC I Regular Interest I-LTA, REMIC I Regular Interest I-LTM1,
REMIC I Regular Interest I- LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4 and REMIC I Regular Interest I-LTM5 shall be multiplied
by a fraction, the numerator of which is the actual number of days in the
Interest Accrual Period and the denominator of which is 30.

                  "Master Servicer": Ameriquest Mortgage Company or any
successor master servicer appointed as herein provided, in its capacity as
Master Servicer hereunder.

                  "Master Servicer Event of Default": One or more of the events
described in Section 7.01.

                  "Master Servicer Prepayment Charge Payment Amount": The
amounts payable by the Master Servicer pursuant to Section 2.03(b) in respect of
any waived (or, with respect to subsequent changes of law, any unenforceable)
Prepayment Charges.

                  "Master Servicer Remittance Date": With respect to any
Distribution Date, 3:00 p.m. New York time on the last Business Day preceding
the related Distribution Date.

                  "Master Servicer Reporting Date": With respect to any
Distribution Date, 3:00 p.m. New York time on the 18th day of the calendar month
in which such Distribution Date occurs or, if such 18th day is not a Business
Day, the Business Day immediately succeeding such 18th day.

                  "Master Servicer Termination Test": With respect to any
Distribution Date, the Master Servicer Termination Test will be failed if the
Cumulative Loss Percentage exceeds 4.00%.

                                      -24-

<PAGE>

                  "Maximum Cap Rate": For any Distribution Date with respect to
the Class A Certificates and the Mezzanine Certificates, a per annum rate equal
to the product of (x) the weighted average of the Expense Adjusted Maximum
Mortgage Rates of the Mortgage Loans, weighted based on their Scheduled
Principal Balances as of the first day of the calendar month preceding the month
in which the Distribution Date occurs (after giving effect to unscheduled
collections of principal received during the related Prepayment Period) and (y)
a fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Interest Accrual Period.

                  "Maximum I-LTZZ Uncertificated Interest Deferral Amount": With
respect to any Distribution Date, the excess of (i) accrued interest at the
REMIC I Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest
I-LTM4 and REMIC I Regular Interest I-LTM5 for such Distribution Date, with the
rate on each such REMIC I Regular Interest subject to a cap equal to the related
Formula Rate, provided, however, that solely for this purpose, calculations of
the REMIC I Remittance Rate and the related caps with respect to REMIC I Regular
Interest I-LTA, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4 and
REMIC I Regular Interest I-LTM5 shall be multiplied by a fraction, the numerator
of which is the actual number of days in the Interest Accrual Period and the
denominator of which is 30.

                  "Maximum Mortgage Rate": With respect to each adjustable-rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.

                  "Mezzanine Certificate": Any Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates or Class M-5
Certificates.

                  "Minimum Mortgage Rate": With respect to each adjustable-rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.

                  "Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.02; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.

                  "Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on, or first priority security interest in, a Mortgaged
Property securing a Mortgage Note.

                                      -25-

<PAGE>

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

                  "Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee pursuant to Section 2.01 or Section 2.03(d) of this Agreement, as
held from time to time held as a part of REMIC I, the Mortgage Loans so held
being identified in the Mortgage Loan Schedule.

                  "Mortgage Loan Purchase Agreement": The agreement between the
Originator and the Depositor, regarding the transfer of the Mortgage Loans by
the Originator to or at the direction of the Depositor, substantially in the
form of Exhibit D annexed hereto.

                  "Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC I on such date, attached hereto as Schedule 1. The
Mortgage Loan Schedule shall set forth the following information with respect to
each Mortgage Loan:

                  (1) the Originator's Mortgage Loan identifying number;

                  (2) [reserved];

                  (3) the state and zip code;

                  (4) a code indicating whether the Mortgaged Property is
         owner-occupied;

                  (5) the type of Residential Dwelling constituting the
         Mortgaged Property;

                  (6) the original months to maturity;

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

                  (8) the Mortgage Rate in effect immediately following the
         Cut-off Date;

                  (9) the date on which the first Monthly Payment was due on the
         Mortgage Loan;

                  (10) the stated maturity date;

                  (11) the amount of the Monthly Payment due on the first Due
         Date after the Cut- off Date;

                  (12) the last Due Date on which a Monthly Payment was actually
         applied to the unpaid Stated Principal Balance;

                  (13) the original principal amount of the Mortgage Loan;

                  (14) the Scheduled Principal Balance of the Mortgage Loan as
         of the close of business on the Cut-off Date;

                                      -26-

<PAGE>

                  (15) with respect to each adjustable-rate Mortgage Loan, the
         Gross Margin;

                  (16) a code indicating the purpose of the Mortgage Loan (I.E.,
         purchase, refinance debt consolidation cashout, or refinance debt
         consolidation no cashout);

                  (17) with respect to each adjustable-rate Mortgage Loan, the
         Maximum Mortgage Rate;

                  (18) with respect to each adjustable-rate Mortgage Loan, the
         Minimum Mortgage Rate;

                  (19) the Mortgage Rate at origination;

                  (20) with respect to each adjustable-rate Mortgage Loan, the
         Periodic Rate Cap and the maximum first Adjustment Date Mortgage Rate
         adjustment;

                  (21) a code indicating the documentation program (I.E., Full
         Documentation, Limited Documentation or Stated Income);

                  (22) with respect to each adjustable-rate Mortgage Loan, the
         first Adjustment Date immediately following the Cut-off Date;

                  (23) the risk grade;

                  (24) the Value of the Mortgaged Property;

                  (25) the sale price of the Mortgaged Property, if applicable;
         and

                  (26) the FICO score of the primary Mortgagor.

                  The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current Stated Principal
Balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the
Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the Depositor in
accordance with the provisions of this Agreement. With respect to any Qualified
Substitute Mortgage Loan, the Cut- off Date shall refer to the related Cut-off
Date for such Mortgage Loan, determined in accordance with the definition of
Cut-off Date herein.

                  "Mortgage Note": The original executed note or other evidence
of the indebtedness of a Mortgagor under a Mortgage Loan.

                  "Mortgage Pool": The pool of Mortgage Loans, identified on
Schedule 1 from time to time, and any REO Properties acquired in respect
thereof.

                                      -27-

<PAGE>

                  "Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (i) with
respect to each fixed-rate Mortgage Loan shall remain constant at the rate set
forth in the Mortgage Loan Schedule as the Mortgage Rate in effect immediately
following the Cut-off Date and (ii) with respect to the adjustable-rate Mortgage
Loans, (A) as of any date of determination until the first Adjustment Date
following the Cut-off Date shall be the rate set forth in the Mortgage Loan
Schedule as the Mortgage Rate in effect immediately following the Cut-off Date
and (B) as of any date of determination thereafter shall be the rate as adjusted
on the most recent Adjustment Date equal to the sum, rounded to the nearest
0.125% as provided in the Mortgage Note, of the Index, as most recently
available as of a date prior to the Adjustment Date as set forth in the related
Mortgage Note, plus the related Gross Margin; provided that the Mortgage Rate on
such adjustable-rate Mortgage Loan on any Adjustment Date shall never be more
than the lesser of (i) the sum of the Mortgage Rate in effect immediately prior
to the Adjustment Date plus the related Periodic Rate Cap, if any, and (ii) the
related Maximum Mortgage Rate, and shall never be less than the greater of (i)
the Mortgage Rate in effect immediately prior to the Adjustment Date less the
Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.

                  "Mortgaged Property": The underlying property identified in
the related Mortgage as securing a Mortgage Loan, including any REO Property,
consisting of an Estate in Real Property improved by a Residential Dwelling
(excluding for purposes of construing the representations or warranties made in
the Mortgage Loan Purchase Agreement, any improvements thereupon not considered
by the appraiser in determining the Value of such Mortgaged Property).

                  "Mortgagor":  The obligor on a Mortgage Note.

                  "Net Monthly Excess Cashflow": With respect to any
Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for
such Distribution Date and (ii) the excess of (x) the Available Funds for such
Distribution Date over (y) the sum for such Distribution Date of (A) the Senior
Interest Distribution Amount payable to the holders of the Class A Certificates
and the Interest Distribution Amounts payable to the Mezzanine Certificates and
(B) the Principal Remittance Amount.

                  "Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property) as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.

                  "Net WAC Pass-Through Rate": With respect to the Offered
Certificates and any Distribution Date, a per annum rate equal to the product of
(x) the weighted average of the Expense Adjusted Net Mortgage Rates of the
Mortgage Loans and (y) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related
Interest Accrual Period.

                                      -28-

<PAGE>

                  "Net WAC Rate Carryover Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the sum
of the excess of (i) the amount of interest such Certificates would have accrued
for such Distribution Date had such Pass-Through Rate been calculated at the
Formula Rate over (ii) the amount of interest accrued on such Certificates at
the related Net WAC Pass-Through Rate for such Distribution Date and (B) the
related Net WAC Rate Carryover Amount for the previous Distribution Date not
previously paid, together with interest thereon at a rate equal to the Formula
Rate applicable for such class in each case for the Interest Accrual Period for
the current Distribution Date.

                  "Net WAC Rate Carryover Reserve Account": The Net WAC Rate
Carryover Reserve Account established and maintained pursuant to Section 4.10.

                  "New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or extended on behalf of REMIC I, if
REMIC I has the right to renegotiate the terms of such lease.

                  "NIMS Insurer": Any insurer that is guaranteeing certain
payments under notes secured by collateral which includes, among other things,
all or a portion of the Class CE Certificates, the Class P Certificates and/or
the Residual Certificates.

                  "Nonrecoverable Advance": Any Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Master Servicer, will not or, in the case of
a proposed Advance, would not be ultimately recoverable from related Late
Collections, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or
REO Property as provided herein.

                  "Nonrecoverable Servicing Advance": Any Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, will
not or, in the case of a proposed Servicing Advance, would not be ultimately
recoverable from related Late Collections, Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.

                  "Non-United States Person": Any Person other than a United
States Person.

                  "Notional Amount": With respect to the Class CE Interest and
any Distribution Date, the aggregate Uncertificated Balances of the REMIC I
Regular Interests immediately prior to such Distribution Date.

                  "Officers' Certificate": With respect to the Depositor, a
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the President or a vice president (however denominated), and by the Treasurer,
the Secretary, or one of the assistant treasurers or assistant secretaries. With
respect to the Master Servicer, any officer who is authorized to act for the
Master Servicer in matters relating to this Agreement, and whose action is
binding upon the Master Servicer, initially including those individuals whose
names appear on the list of authorized officers delivered at the closing.

                                      -29-

<PAGE>

                  "Offered Certificate": Any one of the Class A Certificates and
the Mezzanine Certificates, issued under this Agreement.

                  "One-Month LIBOR": With respect to the Class A Certificates,
the Mezzanine Certificates, REMIC I Regular Interest I-LTA, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4 and REMIC I Regular Interest I-LTM5 and
any Interest Accrual Period therefor, the rate determined by the Trustee on the
related Interest Determination Date on the basis of the offered rate for
one-month U.S. dollar deposits, as such rate appears on Telerate Page 3750 as of
11:00 a.m. (London time) on such Interest Determination Date; provided that if
such rate does not appear on Telerate Page 3750, the rate for such date will be
determined on the basis of the offered rates of the Reference Banks for one-
month U.S. dollar deposits, as of 11:00 a.m. (London time) on such Interest
Determination Date. In such event, the Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If on
such Interest Determination Date, two or more Reference Banks provide such
offered quotations, One-Month LIBOR for the related Interest Accrual Period
shall be the arithmetic mean of such offered quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If on such Interest
Determination Date, fewer than two Reference Banks provide such offered
quotations, One-Month LIBOR for the related Interest Accrual Period shall be the
higher of (i) LIBOR as determined on the previous Interest Determination Date
and (ii) the Reserve Interest Rate. Notwithstanding the foregoing, if, under the
priorities described above, LIBOR for an Interest Determination Date would be
based on LIBOR for the previous Interest Determination Date for the third
consecutive Interest Determination Date, the Trustee shall select, after
consultation with the NIMS Insurer, an alternative comparable index (over which
the Trustee has no control), used for determining one-month Eurodollar lending
rates that is calculated and published (or otherwise made available) by an
independent party.

                  "Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor or the Master Servicer
acceptable to the Trustee, if such opinion is delivered to the Trustee, except
that any opinion of counsel relating to (a) the qualification of any Trust REMIC
as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of
Independent counsel.

                  "Optional Termination Date": The first Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to an amount less than 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.

                  "Originator": Ameriquest Mortgage Company, or its successor in
interest, in its capacity as originator under the Mortgage Loan Purchase
Agreement.

                  "Overcollateralized Amount": With respect to any Distribution
Date, the excess, if any, of (a) the aggregate Stated Principal Balances of the
Mortgage Loans and REO Properties immediately following such Distribution Date
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period), over (b) the sum of
the aggregate Certificate Principal Balances of the Class A Certificates, the
Mezzanine Certificates and the Class

                                      -30-

<PAGE>

P Certificates as of such Distribution Date (after giving effect to
distributions to be made on such Distribution Date).

                  "Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the Overcollateralization Target
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date (calculated for this purpose only,
after taking into account the distributions to be made of the Principal
Remittance Amount on such Distribution Date).

                  "Overcollateralization Increase Amount": With respect to any
Distribution Date, the lesser of (a) the Overcollateralization Deficiency Amount
as of such Distribution Date (after taking into account the payment of the
Principal Distribution Amount on such Distribution Date, exclusive of the
payment of any Overcollateralization Increase Amount) and (b) the amount of
Accrued Certificate Interest payable on the Class CE Certificates on such
Distribution Date as reduced by Realized Losses allocated thereto with respect
to such Distribution Date pursuant to Section 4.04.

                  "Overcollateralization Reduction Amount": With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Principal Remittance Amount.

                  "Overcollateralization Target Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date,1.25% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, (ii) on or after
the Stepdown Date provided a Trigger Event is not in effect, the greater of (x)
2.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (y) $3,000,003.80, or (iii) on or after the Stepdown Date and if a
Trigger Event is in effect, the Overcollateralization Target Amount for the
immediately preceding Distribution Date.

                  "Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.

                  "Pass-Through Rate": With respect to the Class A Certificates
and the Mezzanine Certificates and any Distribution Date, the lesser of (x) the
related Formula Rate for such Distribution Date and (y) the Net WAC Pass-Through
Rate for such Distribution Date.

                  With respect to the Class CE Interest and any Distribution
Date, a rate per annum equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (A)
through (I) below, and the denominator of which is the aggregate Uncertificated
Balance of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTA,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular
Interest I-LTM5 and REMIC I Regular Interest I-LTZZ. For purposes of calculating
the Pass-Through Rate for the Class CE Interest, the numerator is equal to the
sum of the following components:

                                      -31-

<PAGE>

                  (A) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTAA minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTAA;

                  (B) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTA minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTA;

                  (C) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM1 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM1;

                  (D) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM2 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM2;

                  (E) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM3 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM3;

                  (F) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM4 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM4;

                  (G) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTM5 minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTM5;

                  (H) the REMIC I Remittance Rate for REMIC I Regular Interest
         I-LTZZ minus the Marker Rate, applied to an amount equal to the
         Uncertificated Balance of REMIC I Regular Interest I-LTZZ; and

                  (I) 100% of the interest on REMIC I Regular Interest I-LTP.

                  With respect to the Class CE Certificates, 100% of the
interest distributable to the Class CE Interest, expressed as a per annum rate.

                  "Percentage Interest": With respect to any Class of
Certificates (other than the Residual Certificates), the undivided percentage
ownership in such Class evidenced by such Certificate, expressed as a
percentage, the numerator of which is the initial Certificate Principal Balance
represented by such Certificate and the denominator of which is the aggregate
initial Certificate Principal Balance of all of the Certificates of such Class.
The Class A Certificates and the Mezzanine Certificates are issuable only in
minimum Percentage Interests corresponding to minimum initial Certificate
Principal Balances of $25,000 and integral multiples of $1.00 in excess thereof.
The Class P Certificates are issuable only in minimum Percentage Interests
corresponding to minimum initial Certificate Principal Balances of $20 and
integral multiples thereof. The Class

                                      -32-

<PAGE>

CE Certificates are issuable only in minimum Percentage Interests corresponding
to minimum initial Certificate Principal Balances of $10,000 and integral
multiples of $1.00 in excess thereof; provided, however, that a single
Certificate of such Class of Certificates may be issued having a Percentage
Interest corresponding to the remainder of the aggregate initial Certificate
Principal Balance of such Class or to an otherwise authorized denomination for
such Class plus such remainder. With respect to any Residual Certificate, the
undivided percentage ownership in such Class evidenced by such Certificate, as
set forth on the face of such Certificate. The Residual Certificates are
issuable in Percentage Interests of 20% and multiples thereof.

                  "Periodic Rate Cap": With respect to each adjustable-rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Mortgage Loan may increase or decrease (without regard to the
Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from
the Mortgage Rate in effect immediately prior to such Adjustment Date.

                  "Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, the Master Servicer, the NIMS
Insurer, the Trustee or any of their respective Affiliates:

                  (i) direct obligations of, or obligations fully guaranteed as
         to timely payment of principal and interest by, the United States or
         any agency or instrumentality thereof, provided such obligations are
         backed by the full faith and credit of the United States;

                  (ii) demand and time deposits in, certificates of deposit of,
         or bankers' acceptances (which shall each have an original maturity of
         not more than 90 days and, in the case of bankers' acceptances, shall
         in no event have an original maturity of more than 365 days or a
         remaining maturity of more than 30 days) denominated in United States
         dollars and issued by, any Depository Institution;

                  (iii) repurchase obligations with respect to any security
         described in clause (i) above entered into with a Depository
         Institution (acting as principal);

                  (iv) securities bearing interest or sold at a discount that
         are issued by any corporation incorporated under the laws of the United
         States of America or any state thereof and that are rated by each
         Rating Agency that rates such securities in its highest long-term
         unsecured rating categories at the time of such investment or
         contractual commitment providing for such investment;

                  (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 30 days after the date of
         acquisition thereof) that is rated by each Rating Agency that rates
         such securities in its highest short-term unsecured debt rating
         available at the time of such investment;

                                      -33-

<PAGE>

                  (vi) units of money market funds, including money market funds
         advised by the Trustee or an Affiliate thereof, that have been rated
         "AAA" by Fitch and "AAAm" by S&P; and

                  (viii) if previously confirmed in writing to the Trustee and
         consented to by the NIMS Insurer, any other demand, money market or
         time deposit, or any other obligation, security or investment, as may
         be acceptable to the Rating Agencies as a permitted investment of funds
         backing securities having ratings equivalent to its highest initial
         rating of the Class A Certificates;

provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.

                  "Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.

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

                  "Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.

                  "Prepayment Assumption": As defined in the Prospectus
Supplement.

                  "Prepayment Charge": With respect to any Prepayment Period,
any prepayment premium, fee or charge payable by the a Mortgagor in connection
with any Principal Prepayment pursuant to the terms of the related Mortgage Note
as from time to time held as a part of the Trust Fund, the Prepayment Charges so
held being identified in the Prepayment Charge Schedule (other than any Master
Servicer Prepayment Charge Payment Amount).

                  "Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges included in the Trust Fund on such date, attached hereto as
Schedule 2 (including the prepayment charge summary attached thereto). The
Prepayment Charge Schedule shall set forth the following information with
respect to each Prepayment Charge:

                  (i) the Master Servicer's Mortgage Loan identifying number;

                  (ii) a code indicating the type of Prepayment Charge;

                                      -34-

<PAGE>

                  (iii) the date on which the first Monthly Payment was due on
         the related Mortgage Loan;

                  (iv) the term of the related Prepayment Charge;

                  (v) the original Stated Principal Balance of the related
         Mortgage Loan;

                  (vi) the Stated Principal Balance of the related Mortgage Loan
         as of the Cut-off Date;

                  The Prepayment Charge Schedule shall be amended from time to
time by the Master Servicer in accordance with the provisions of this Agreement
and a copy of such amended Prepayment Charge Schedule shall be furnished by the
Master Servicer to the NIMS Insurer.

                  "Prepayment Interest Excess": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment Period occurring between the
first day of the calendar month in which such Distribution Date occurs and the
Determination Date of the calendar month in which such Distribution Date occurs,
an amount equal to interest (to the extent received) at the applicable Net
Mortgage Rate on the amount of such Principal Prepayment for the number of days
commencing on the first day of the calendar month in which such Distribution
Date occurs and ending on the last date through which interest is collected from
the related Mortgagor. The Master Servicer may withdraw such Prepayment Interest
Excess from the Collection Account in accordance with Section 3.05(a)(iv).

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a Principal
Prepayment in full during the portion of the related Prepayment Period occurring
between the first day of the related Prepayment Period and the last day of the
calendar month preceding the month in which such Distribution Date occurs, an
amount equal to interest at the applicable Net Mortgage Rate on the amount of
such Principal Prepayment for the number of days commencing on the day after the
last date on which interest is collected from the related Mortgagor and ending
on the last day of the calendar month preceding such Distribution Date. The
obligations of the Master Servicer in respect of any Prepayment Interest
Shortfall are set forth in Section 4.03(e).

                  "Prepayment Period": With respect to any Distribution Date,
the period commencing on the day after the Determination Date in the calendar
month preceding the calendar month in which such Distribution Date occurs (or,
in the case of the first Distribution Date, commencing on July 1, 2003) and
ending on the Determination Date of the calendar month in which such
Distribution Date occurs.

                  "Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the principal portion of all scheduled monthly
payments on the Mortgage Loans due during the related Due Period, whether or not
received on or prior to the related Determination Date; (ii) the principal
portion of all proceeds received in respect of the repurchase of a Mortgage Loan
(or, in the case of a substitution, certain amounts representing a principal
adjustment) during the related Prepayment Period; (iii) the principal portion of
all other unscheduled collections, including

                                      -35-

<PAGE>

Insurance Proceeds, Liquidation Proceeds and all full and partial Principal
Prepayments, received during the related Prepayment Period, to the extent
applied as recoveries of principal on the Mortgage Loans; and (iv) the amount of
any Overcollateralization Increase Amount for such Distribution Date MINUS (v)
the amount of any Overcollateralization Reduction Amount for such Distribution
Date. In no event will the Principal Distribution Amount with respect to any
Distribution Date be (x) less than zero or (y) greater than the then outstanding
aggregate Certificate Principal Balance of the Class A Certificates and the
Mezzanine Certificates.

                  "Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.

                  "Principal Remittance Amount": With respect to any
Distribution Date, the sum of the amounts described in clauses (i) through (iii)
of the definition of Principal Distribution Amount.

                  "Prospectus Supplement": The Prospectus Supplement, dated July
1, 2003, relating to the public offering of the Offered Certificates.

                  "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(a) or Section 9.01, and as confirmed by an Officers' Certificate from the
Master Servicer to the Trustee, an amount equal to the sum of (i) 100% of the
Stated Principal Balance thereof as of the date of purchase (or such other price
as provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Master Servicer, which
payment or advance had as of the date of purchase been distributed pursuant to
Section 4.01, through the end of the calendar month in which the purchase is to
be effected and (y) an REO Property, the sum of (1) accrued interest on such
Stated Principal Balance at the applicable Net Mortgage Rate in effect from time
to time from the Due Date as to which interest was last covered by a payment by
the Mortgagor or an advance by the Master Servicer through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired, plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had
been distributed as or to cover REO Imputed Interest pursuant to Section 4.01,
(iii) any unreimbursed Servicing Advances and Advances and any unpaid Servicing
Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Sections 3.05(a)(v) and 3.16(a), and (v) in the
case of a Mortgage Loan required to be purchased pursuant to Section 2.03,
expenses reasonably incurred or to be incurred by the Master Servicer, the NIMS
Insurer or the Trustee in respect of the breach or defect giving rise to the
purchase obligation, as well as any costs and damages incurred by the Trust Fund
in connection with any violation by such loan of any predatory or abusive
lending law.

                                      -36-

<PAGE>

                  "Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding Stated
Principal Balance, after application of all scheduled payments of principal and
interest due during or prior to the month of substitution, not in excess of the
Scheduled Principal Balance of the Deleted Mortgage Loan as of the Due Date in
the calendar month during which the substitution occurs, (ii) have a Mortgage
Rate not less than (and not more than one percentage point in excess of) the
Mortgage Rate of the Deleted Mortgage Loan, (iii) with respect to any
adjustable-rate Mortgage Loan, have a Maximum Mortgage Rate not less than the
Maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) with respect to any
adjustable-rate Mortgage Loan, have a Minimum Mortgage Rate not less than the
Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) with respect to any
adjustable-rate Mortgage Loan, have a Gross Margin equal to the Gross Margin of
the Deleted Mortgage Loan, (vi) with respect to any adjustable-rate Mortgage
Loan, have a next Adjustment Date not more than two months later than the next
Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the
Deleted Mortgage Loan, (ix) have an Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (x) have a risk grading determined by the
Originator at least equal to the risk grading assigned on the Deleted Mortgage
Loan, (xi) have been underwritten or reunderwritten by the Originator in
accordance with the same underwriting criteria and guidelines as the Deleted
Mortgage Loan, (xii) have a Prepayment Charge provision at least equal to the
Prepayment Charge provision of the Deleted Mortgage Loan, and (xiii) conform to
each representation and warranty set forth in Section 6 of the Mortgage Loan
Purchase Agreement applicable to the Deleted Mortgage Loan. In the event that
one or more mortgage loans are substituted for one or more Deleted Mortgage
Loans, the amounts described in clause (i) hereof shall be determined on the
basis of aggregate Stated Principal Balances, the Mortgage Rates described in
clause (ii) hereof shall be determined on the basis of weighted average Mortgage
Rates, the risk gradings described in clause (x) hereof shall be satisfied as to
each such mortgage loan, the terms described in clause (vii) hereof shall be
determined on the basis of weighted average remaining terms to maturity, the
Loan-to-Value Ratios described in clause (ix) hereof shall be satisfied as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xi) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.

                  "Rating Agency or Rating Agencies": Moody's, Fitch and S&P or
their successors. If such agencies or their successors are no longer in
existence, "Rating Agencies" shall be such nationally recognized statistical
rating agencies, or other comparable Persons, designated by the Depositor,
notice of which designation shall be given to the Trustee and the Master
Servicer.

                  "Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero) equal to (i) the unpaid Stated Principal Balance of such Mortgage Loan as
of the commencement of the calendar month in which the Final Recovery
Determination was made, plus (ii) accrued interest from the Due Date as to which
interest was last paid by the Mortgagor through the end of the calendar month in
which such Final Recovery Determination was made, calculated in the case of each
calendar month during such period (A) at an annual rate equal to the annual rate
at which interest was then accruing on such Mortgage Loan and (B) on a principal
amount equal to the Stated Principal Balance of such Mortgage Loan as of the

                                      -37-

<PAGE>

close of business on the Distribution Date during such calendar month, plus
(iii) any amounts previously withdrawn from the Collection Account in respect of
such Mortgage Loan pursuant to Section 3.05(a)(v) and Section 3.12(c), minus
(iv) the proceeds, if any, received in respect of such Mortgage Loan during the
calendar month in which such Final Recovery Determination was made, net of
amounts that are payable therefrom to the Master Servicer with respect to such
Mortgage Loan pursuant to Section 3.05(a)(ii).

                  With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid Stated Principal Balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Section 3.05(a)(v) and Section 3.12(c), minus
(v) the aggregate of all Advances made by the Master Servicer in respect of such
REO Property or the related Mortgage Loan for which the Master Servicer has been
or, in connection with such Final Recovery Determination, will be reimbursed
pursuant to Section 3.13 out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property, minus (vi) the
total of all net rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such REO Property that has been, or in connection with
such Final Recovery Determination, will be transferred to the Distribution
Account pursuant to Section 3.13.

                  With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the difference between the Stated Principal
Balance of the Mortgage Loan outstanding immediately prior to such Deficient
Valuation and the Stated Principal Balance of the Mortgage Loan as reduced by
the Deficient Valuation.

                  With respect to each Mortgage Loan which has become the
subject of a Debt Service Reduction, the portion, if any, of the reduction in
each affected Monthly Payment attributable to a reduction in the Mortgage Rate
imposed by a court of competent jurisdiction. Each such Realized Loss shall be
deemed to have been incurred on the Due Date for each affected Monthly Payment.

                  "Record Date": With respect to each Distribution Date and any
Book-Entry Certificate, the Business Day immediately preceding such Distribution
Date. With respect to each Distribution Date and any other Class of
Certificates, including any Definitive Certificates, the last Business Day of
the month immediately preceding the month in which such Distribution Date
occurs.

                                      -38-

<PAGE>

                  "Reference Banks": Deutsche Bank, Barclays Bank PLC, The Tokyo
Mitsubishi Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that if any of the foregoing banks are not suitable
to serve as a Reference Bank, then any leading banks selected by the Trustee
(after consultation with the NIMS Insurer) which are engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, (ii) not controlling, under the control
of or under common control with the Depositor or any Affiliate thereof and (iii)
which have been designated as such by the Trustee.

                  "Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.

                  "Regular Certificate": Any Class A Certificate, Mezzanine
Certificate, Class P Certificate or Class CE Certificate.

                  "Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.

                  "Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended or any applicable state law providing similar relief.

                  "Relief Act Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended calendar month as
a result of the application of the Relief Act.

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

                  "REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans and Prepayment Charges as from time to time are subject to this
Agreement, together with the Mortgage Files relating thereto, and together with
all collections thereon and proceeds thereof, (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Trustee's rights
with respect to the Mortgage Loans under all insurance policies required to be
maintained pursuant to this Agreement and any proceeds thereof, (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby) to the extent conveyed pursuant to Section
2.01 and (v) the Collection Account (other than any amounts representing any
Master Servicer Prepayment Charge Payment Amounts), the Distribution Account
(other than any amounts representing any Master Servicer Prepayment Charge
Payment Amounts) and any REO Account and such assets that are deposited therein
from time to time and any investments thereof, together with any and all income,
proceeds and payments with respect thereto. Notwithstanding the foregoing,
however, REMIC I specifically excludes any Master Servicer Prepayment Charge
Payment Amounts, the Net WAC Rate Carryover Reserve Account, the Cap Contract,
all payments and other collections of principal and interest due on the Mortgage
Loans on or before the Cut-off Date, all Prepayment Charges payable in
connection with Principal Prepayments made before the Cut-off Date.

                                      -39-

<PAGE>

                  "REMIC I Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount (subject to adjustment based on the actual number
of days elapsed in the respective Interest Accrual Periods for the indicated
Regular Interests for such Distribution Date) equal to (a) the product of (i)
the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
then outstanding and (ii) the REMIC I Remittance Rate for REMIC I Regular
Interest I-LTAA minus the Marker Rate, divided by (b) 12.

                  "REMIC I Overcollateralization Target Amount": 1.00% of the
Overcollateralization Target Amount.

                  "REMIC I Overcollateralization Amount": With respect to any
date of determination, (i) 1% of the aggregate Uncertificated Balances of the
REMIC I Regular Interests minus (ii) the aggregate of the Uncertificated
Balances of REMIC I Regular Interest I-LTA, REMIC I Regular Interest I-LTM1,
REMIC I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3, REMIC I
Regular Interest I-LTM4 and REMIC I Regular Interest I-LTM5, in each case as of
such date of determination.

                  "REMIC I Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to the product of (i) the aggregate
Stated Principal Balance of the Mortgage Loans and REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Balances of REMIC I Regular Interest I-LTA,
REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4 and REMIC I Regular
Interest I-LTM5 and the denominator of which is the aggregate of the
Uncertificated Balances of REMIC I Regular Interest I-LTA, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest I-LTM5 and
REMIC I Regular Interest I-LTZZ.

                  "REMIC I Regular Interest": Any of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTAA": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTAA
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTA": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and

                                      -40-

<PAGE>

conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM3
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM4": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM4
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTM5": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM5
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTP": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTP
shall be entitled to any Prepayment Charges collected by the Master Servicer and
to a distribution of principal, subject to the terms and conditions hereof, in
an aggregate amount equal to its initial Uncertificated Balance as set forth in
the Preliminary Statement hereto.

                  "REMIC I Regular Interest I-LTZZ": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I.

                                      -41-

<PAGE>

REMIC I Regular Interest I-LTZZ shall accrue interest at the related REMIC I
Remittance Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary Statement hereto.

                  "REMIC I Remittance Rate": With respect to the REMIC I Regular
Interests, the weighted average of the Expense Adjusted Net Mortgage Rates of
the Mortgage Loans.

                  "REMIC II": The segregated pool of assets consisting of all of
the REMIC I Regular Interests conveyed in trust to the Trustee, for the benefit
of the REMIC II Certificateholders pursuant to Section 2.09, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

                  "REMIC II Certificate": Any of the Class A Certificates, Class
M-1 Certificates or Class R Certificate.

                  "REMIC II Certificateholder": The Holder of any REMIC II
Certificate.

                  "REMIC II Regular Interest": Any of the Class M-2 Interest,
the Class M-3 Interest, the Class M-4 Interest, the Class M-5 Interest, the
Class CE Interest or the Class P Interest.

                  "REMIC III": The segregated pool of assets consisting of all
of the Class M-2 Interest conveyed in trust to the Trustee, for the benefit of
the Holders of the Class M-2 Certificates pursuant to Section 2.09, and all
amounts deposited therein, with respect to which a separate REMIC election is to
be made.

                  "REMIC IV": The segregated pool of assets consisting of all of
the Class M-3 Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class M-3 Certificates pursuant to Section 2.10, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

                  "REMIC V": The segregated pool of assets consisting of all of
the Class M-4 Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class M-4 Certificates pursuant to Section 2.11, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

                  "REMIC VI": The segregated pool of assets consisting of all of
the Class M-5 Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class M-5 Certificates pursuant to Section 2.12, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

                  "REMIC VII": The segregated pool of assets consisting of all
of the Class CE Interest conveyed in trust to the Trustee, for the benefit of
the Holders of the Class CE Certificates pursuant to Section 2.13, and all
amounts deposited therein, with respect to which a separate REMIC election is to
be made.

                                      -42-

<PAGE>

                  "REMIC VIII": The segregated pool of assets consisting of all
of the Class P Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Class P Certificates pursuant to Section 2.14, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

                  "REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of the Code, and related provisions, and proposed, temporary
and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time.

                  "Remittance Report": A report in form and substance that is
acceptable to the Trustee and the NIMS Insurer on a magnetic disk or tape
prepared by the Master Servicer pursuant to Section 4.03 with such additions,
deletions and modifications as agreed to by the Trustee and the Master Servicer.

                  "Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."

                  "REO Account": Each of the accounts maintained by the Master
Servicer in respect of an REO Property pursuant to Section 3.13 which account
may be the Collection Account subject to Section 3.13.

                  "REO Disposition": The sale or other disposition of an REO
Property on behalf of REMIC I.

                  "REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of REMIC I,
one month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.

                  "REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
9.01 that is allocable to such REO Property) or otherwise, net of any portion of
such amounts (i) payable pursuant to Section 3.13(c) in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Master Servicer pursuant to Section 3.13(d) for unpaid
Servicing Fees in respect of the related Mortgage Loan and unreimbursed
Servicing Advances and Advances in respect of such REO Property or the related
Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO Property
for such calendar month.

                  "REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of REMIC I through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.13.

                                      -43-

<PAGE>

                  "Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E attached hereto.

                  "Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/16%) of the one-month U.S. dollar lending rates which New York
City banks selected by the Trustee are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Trustee can determine no
such arithmetic mean, the lowest one-month U.S. dollar lending rate which New
York City banks selected by the Trustee are quoting on such Interest
Determination Date to leading European banks.

                  "Residential Dwelling": Any one of the following: (i) an
attached or detached one- family dwelling, (ii) a detached two- to four-family
dwelling, (iii) a one-family dwelling unit in a condominium project or (iv) a
detached or attached one-family dwelling in a planned unit development, none of
which is a co-operative, mobile or manufactured home (unless such mobile or
manufactured home is defined as real property under applicable state law).

                  "Residual Certificate": Any one of the Class R Certificates or
Class R-X Certificates.

                  "Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.

                  "Responsible Officer": When used with respect to the Trustee,
any director, any vice president, any assistant vice president, any associate,
any assistant secretary, any trust officer or any other officer of the Trustee,
customarily performing functions similar to those performed by any of the above
designated officers and, with respect to a particular matter, to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.

                  "Scheduled Principal Balance": With respect to any Mortgage
Loan: (a) as of the Cut-off Date, the outstanding Stated Principal Balance of
such Mortgage Loan as of such date, net of the principal portion of all unpaid
Monthly Payments, if any, due on or before such date; (b) as of any Due Date
subsequent to the Cut-off Date up to and including the Due Date in the calendar
month in which a Liquidation Event occurs with respect to such Mortgage Loan,
the Scheduled Principal Balance of such Mortgage Loan as of the Cut-off Date,
minus the sum of (i) the principal portion of each Monthly Payment due on or
before such Due Date but subsequent to the Cut-off Date, whether or not
received, (ii) all Principal Prepayments received before such Due Date but after
the Cut-off Date, (iii) the principal portion of all Liquidation Proceeds and
Insurance Proceeds received before such Due Date but after the Cut-off Date, net
of any portion thereof that represents principal due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) on a Due
Date occurring on or before the date on which such proceeds were received and
(iv) any Realized Loss incurred with respect thereto as a result of a Deficient
Valuation occurring before such Due Date, but only to the extent such Realized
Loss represents a reduction in the portion of principal of such Mortgage Loan
not yet due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) as of the date of such Deficient Valuation; and (c)
as of any Due Date subsequent to the occurrence of a Liquidation Event with
respect to such

                                      -44-

<PAGE>

Mortgage Loan, zero. With respect to any REO Property: (a) as of any Due Date
subsequent to the date of its acquisition on behalf of the Trust Fund up to and
including the Due Date in the calendar month in which a Liquidation Event occurs
with respect to such REO Property, an amount (not less than zero) equal to the
Scheduled Principal Balance of the related Mortgage Loan as of the Due Date in
the calendar month in which such REO Property was acquired, minus the aggregate
amount of REO Principal Amortization, if any, in respect of such REO Property
for all previously ended calendar months; and (b) as of any Due Date subsequent
to the occurrence of a Liquidation Event with respect to such REO Property,
zero.

                  "Senior Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the sum of (i) the Interest Distribution
Amount for such Distribution Date for the Class A Certificates and (ii) the
Interest Carry Forward Amount with respect to the Class A Certificates.

                  "Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
in respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property and
(iv) the performance of its obligations under Section 3.01, Section 3.04(d),
Section 3.08, Section 3.12 and Section 3.13. The Master Servicer shall not be
required to make any Servicing Advance in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, would
not be ultimately recoverable from related Insurance Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.

                  "Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one month's interest (or in the event of
any payment of interest which accompanies a Principal Prepayment in full made by
the Mortgagor during such calendar month, interest for the number of days
covered by such payment of interest) at the applicable Servicing Fee Rate on the
same principal amount on which interest on such Mortgage Loan accrues for such
calendar month. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.

                  "Servicing Fee Rate": 0.30% per annum.

                  "Servicing Officer": Any employee of the Master Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans, whose name and specimen signature appear on a list of Servicing
Officers furnished by the Master Servicer to the Trustee and the Depositor on
the Closing Date, as such list may from time to time be amended.

                  "Servicing Rights Pledgee": In the event that the Special
Sub-Servicer is designated as the successor Master Servicer pursuant to Section
7.02(a), one or more lenders, selected by the Special Sub-Servicer (in its
capacity as successor Master Servicer), to which the Special Sub- Servicer (in
its capacity as successor Master Servicer) will pledge and assign all of its
right, title and

                                      -45-

<PAGE>

interest in, to and under this Agreement, including Wachovia Bank, National
Association, as the representative of certain lenders.

                  "Servicing Standard": The standards set forth in the first
paragraph of Section 3.01.

                  "Single Certificate": With respect to any Class of
Certificates (other than the Class P Certificates and the Residual
Certificates), a hypothetical Certificate of such Class evidencing a Percentage
Interest for such Class corresponding to an initial Certificate Principal
Balance or Notional Amount of $1,000. With respect to the Class P Certificates
and the Residual Certificates, a hypothetical Certificate of such Class
evidencing a 20% Percentage Interest in such Class.

                  "Special Servicing Fee": With respect to each Mortgage Loan
that is delinquent 90 or more days, $200 per month payable until the earlier of
(i) 18 consecutive months and (ii) the delinquency status of such Mortgage Loan
has been reduced to less than 90 days. The Special Servicing Fee will not be
payable to the Master Servicer.

                  "Special Servicing Fee Rate": As to any Distribution Date, a
per annum rate equal to the percentage equivalent of a fraction, the numerator
of which is the aggregate Special Servicing Fee due to the Special Sub-Servicer
for such Distribution Date, and the denominator of which is the Scheduled
Principal Balance of the Specially Serviced Mortgage Loans as of the first day
of the related Due Period.

                  "Special Sub-Servicer": Litton Loan Servicing LP, a Delaware
limited partnership, in its capacity as Special Sub-Servicer of the Specially
Serviced Mortgage Loans.

                  "Specially Serviced Mortgage Loan": As defined in the Special
Sub-Servicing Agreement.

                  "Special Sub-Servicing Agreement": The Special Sub-Servicing
Agreement, dated the Closing Date, between the Master Servicer and the Special
Sub-Servicer, as acknowledged by Credit-Based Asset Servicing and Securitization
LLC and the Trustee, regarding the servicing of the Specially Serviced Mortgage
Loans by the Special Sub-Servicer, substantially in the form attached hereto as
Exhibit K.

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

                  "Startup Day": With respect to each Trust REMIC, the day
designated as such pursuant to Section 10.01(b) hereof.

                  "Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the Master Servicer

                                      -46-

<PAGE>

and distributed pursuant to Section 4.01 on or before such date of
determination, (ii) all Principal Prepayments received after the Cut-off Date,
to the extent distributed pursuant to Section 4.01 on or before such date of
determination, (iii) all Liquidation Proceeds and Insurance Proceeds applied by
the Master Servicer as recoveries of principal in accordance with the provisions
of Section 3.12, to the extent distributed pursuant to Section 4.01 on or before
such date of determination and (iv) any Realized Loss incurred with respect
thereto as a result of a Deficient Valuation made during or prior to the
Prepayment Period for the most recent Distribution Date coinciding with or
preceding such date of determination; and (b) as of any date of determination
coinciding with or subsequent to the Distribution Date on which the proceeds, if
any, of a Liquidation Event with respect to such Mortgage Loan would be
distributed, zero. With respect to any REO Property: (a) as of any date of
determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of REMIC I, minus the sum of (i) if such REO Property was
acquired before the Distribution Date in any calendar month, the principal
portion of the Monthly Payment due on the Due Date in the calendar month of
acquisition, to the extent advanced by the Master Servicer and distributed
pursuant to Section 4.01 on or before such date of determination, and (ii) the
aggregate amount of REO Principal Amortization in respect of such REO Property
for all previously ended calendar months, to the extent distributed pursuant to
Section 4.01 on or before such date of determination; and (b) as of any date of
determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such REO Property
would be distributed, zero.

                  "Stayed Funds": If the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of a Remittance (as
defined in Section 7.02(b)) is prohibited by Section 362 of the federal
Bankruptcy Code, funds that are in the custody of the Master Servicer, a trustee
in bankruptcy or a federal bankruptcy court and should have been the subject of
such Remittance absent such prohibition.

                  "Stepdown Date": The earlier to occur of (i) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates has been reduced to zero and (ii) the later to occur of (a)
the Distribution Date occurring in August 2006 and (b) the first Distribution
Date on which the Credit Enhancement Percentage (calculated for this purpose
only after taking into account distributions of principal on the Mortgage Loans
but prior to any distribution of the Principal Distribution Amount to the
Certificates then entitled to distributions of principal on such Distribution
Date) is equal to or greater than 35.00%.

                  "Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 6.06.

                  "Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 6.11 and is
otherwise acceptable to the Master Servicer.

                  "Sub-Servicing Agreement": The written contract between the
Master Servicer and a Sub-Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 6.06.

                                      -47-

<PAGE>

                  "Substitution Shortfall Amount": As defined in Section
2.03(d).

                  "Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of each REMIC in the Trust Fund due to its classification
as a REMIC under the REMIC Provisions, together with any and all other
information reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.

                  "Telerate Page 3750": The display designated as page "3750" on
the Dow Jones Telerate Capital Markets Report (or such other page as may replace
page 3750 on that report for the purpose of displaying London interbank offered
rates of major banks).

                  "Termination Price":  As defined in Section 9.01.

                  "Terminator":  As defined in Section 9.01.

                  "Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.

                  "Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.

                  "Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.

                  "Trigger Event": A Trigger Event has occurred with respect to
a Distribution Date if:

                  (a) the Delinquency Percentage for the Mortgage Loans exceeds
16.50%; or

                  (b) the percentage equivalent of a fraction, the numerator of
which is the aggregate amount of Realized Losses incurred from the Cut-off Date
to the last day of the related Due Period and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date
exceeds the applicable percentages set forth below with respect to such
Distribution Date:

                  DISTRIBUTION DATE OCCURRING IN         PERCENTAGE
                  ------------------------------         ----------
                  August 2006 through July 2007             2.75%
                  August 2007 through July 2008             4.00%
                  August 2008 through July 2009             5.25%
                  August 2009 through July 2010             5.75%
                  August 2010 and thereafter                6.00%

                                      -48-

<PAGE>

                  "Trust Fund": Collectively, all of the assets of each Trust
REMIC, Master Servicer Prepayment Charge Payment Amounts and the Net WAC Rate
Carryover Reserve Account (including any payments made under the Cap Contract
deposited therein)..

                  "Trust REMIC": Each of REMIC I, REMIC II, REMIC III, REMIC IV,
REMIC V, REMIC VI, REMIC VII and REMIC VIII.

                  "Trustee": Deutsche Bank National Trust Company, a national
banking association, or its successor in interest, or any successor Trustee
appointed as herein provided.

                  "Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it and in the exercise and performance of any of the powers and
duties of the Trustee hereunder, which amount shall equal the Trustee Fee Rate
accrued for one month multiplied by the sum of the aggregate Scheduled Principal
Balance of the Mortgage Loans and any REO Properties as of the second preceding
Due Date (or, in the case of the initial Distribution Date, as of the Cut-off
Date), calculated on the basis of a 360-day year consisting of twelve 30-day
months.

                  "Trustee Fee Rate": 0.004% per annum.

                  "Uncertificated Balance": The amount of any REMIC I Regular
Interest or REMIC II Regular Interest outstanding as of any date of
determination. As of the Closing Date, the Uncertificated Balance of each REMIC
I Regular Interest and REMIC II Regular Interest shall equal the amount set
forth in the Preliminary Statement hereto as its initial uncertificated balance.
On each Distribution Date, the Uncertificated Balance of each REMIC I Regular
Interest and REMIC II Regular Interest shall be reduced by all distributions of
principal made on such REMIC I Regular Interest or REMIC II Regular Interest on
such Distribution Date pursuant to Section 4.01 and, if and to the extent
necessary and appropriate, shall be further reduced on such Distribution Date by
Realized Losses as provided in Section 4.04. The Uncertificated Balance of REMIC
I Regular Interest I-LTZZ shall be increased by interest deferrals as provided
in Section 4.01(a)(1)(B)(i). With respect to the Class CE Interest as of any
date of determination, an amount equal to the excess, if any, of (A) the then
aggregate Uncertificated Balances of the REMIC I Regular Interests over (B) the
then aggregate Certificate Principal Balances of the Class A Certificates, the
Class M-1 Certificates, the Class M-2 Interest, the Class M-3 Interest, the
Class M-4 Interest, the Class M-5 Interest, and the Class P Interest then
outstanding. The Uncertificated Balance of each REMIC I Regular Interest and
REMIC II Regular Interest shall never be less than zero.

                  "Uncertificated Interest": With respect to any REMIC I Regular
Interest or REMIC II Regular Interest for any Distribution Date, one month's
interest at the REMIC I Remittance Rate or REMIC II Remittance Rate applicable
to such REMIC I Regular Interest or REMIC II Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance or Uncertificated
Notional Amount thereof immediately prior to such Distribution Date.
Uncertificated Interest in respect of any REMIC I Regular Interest or REMIC II
Regular Interest shall accrue on the basis of a 360-day year consisting of
twelve 30-day months. Uncertificated Interest with respect to each Distribution
Date, as to any REMIC I Regular Interest, shall be reduced by an amount equal to
the sum of (a) the aggregate Prepayment Interest Shortfall, if any, for such
Distribution Date to the extent not covered

                                      -49-

<PAGE>

by payments pursuant to Section 4.03(e) and (b) the aggregate amount of any
Relief Act Interest Shortfall, if any allocated, in each case, to such REMIC I
Regular Interest pursuant to Section 1.02. In addition, Uncertificated Interest
with respect to each Distribution Date, as to any REMIC I Regular Interest shall
be reduced by Realized Losses, if any, allocated to such REMIC I Regular
Interest pursuant to Section 1.02 and Section 4.04.

                  "Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.08.

                  "United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States, any state thereof or the District of
Columbia (except, in the case of a partnership, to the extent provided in
regulations) provided that, solely for purposes of the restrictions on the
transfer of Residual Certificates, no partnership or other entity treated as a
partnership for United States federal income tax purposes shall be treated as a
United States Person unless all persons that own an interest in such partnership
either directly or through any entity that is not a corporation for United
States federal income tax purposes are required by the applicable operative
agreement to be United States Persons, or an estate whose income is subject to
United States federal income tax regardless of its source, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, which have not yet
been issued, a trust which was in existence on August 20, 1996 (other than a
trust treated as owned by the grantor under subpart E of part I of subchapter J
of chapter 1 of the Code), and which was treated as a United States person on
August 20, 1996 may elect to continue to be treated as a United States person
notwithstanding the previous sentence. The term "United States" shall have the
meaning set forth in Section 7701 of the Code.

                  "Value": With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by an appraisal made for the originator of
the Mortgage Loan at the time of origination of the Mortgage Loan by an
appraiser who met the minimum requirements of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, and (ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage
Loan, provided, however, in the case of a Refinanced Mortgage Loan, such value
of the Mortgaged Property is based solely upon the value determined by an
appraisal made for the originator of such Refinanced Mortgage Loan at the time
of origination of such Refinanced Mortgage Loan by an appraiser who met the
minimum requirements of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989.

                  "Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. With respect to any date
of determination, 98% of all Voting Rights will be allocated among the holders
of the Class A Certificates, the Mezzanine Certificates and the Class CE
Certificates in proportion to the then outstanding Certificate Principal
Balances of their respective Certificates, 1% of all Voting Rights will be
allocated to the holders of the Class P Certificates and 1% of all Voting Rights
will be allocated among the holders of the Residual Certificates. The Voting
Rights allocated to each Class of Certificate shall be allocated among

                                      -50-

<PAGE>

Holders of each such Class in accordance with their respective Percentage
Interests as of the most recent Record Date.

                  SECTION 1.02. Allocation of Certain Interest Shortfalls.

                  For purposes of calculating the amount of Accrued Certificate
Interest and the amount of the Interest Distribution Amount for the Class A
Certificates, the Mezzanine Certificates and the Class CE Certificates for any
Distribution Date, (1) the aggregate amount of any Prepayment Interest
Shortfalls (to the extent not covered by payments by the Master Servicer
pursuant to Section 4.03(e)) and any Relief Act Interest Shortfall incurred in
respect of the Mortgage Loans for any Distribution Date shall be allocated
first, among the Class CE Certificates on a PRO RATA basis based on, and to the
extent of, one month's interest at the then applicable respective Pass-Through
Rate on the respective Notional Amount of each such Certificate and thereafter,
among the Class A Certificates and the Mezzanine Certificates on a PRO RATA
basis based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Certificate Principal
Balance or Notional Amount of each such Certificate and (2) the aggregate amount
of any Realized Losses incurred for any Distribution Date and Net WAC Rate
Carryover Amounts incurred for any Distribution Date shall be allocated among
the Class CE Certificates on a PRO RATA basis based on, and to the extent of,
one month's interest at the then applicable respective Pass-Through Rate on the
respective Notional Amount of each such Certificate.

                  For purposes of calculating the amount of Uncertificated
Interest for the REMIC I Regular Interests for any Distribution Date, the
aggregate amount of any Prepayment Interest Shortfalls (to the extent not
covered by payments by the Master Servicer pursuant to Section 4.03(e)) and
Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Interest payable
to REMIC I Regular Interest I-LTAA and REMIC I Regular Interest I-LTZZ up to an
aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98% and
2%, respectively, and thereafter among REMIC I Regular Interest I- LTA, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4, REMIC I Regular Interest
I-LTM5 and REMIC I Regular Interest I-LTZZ PRO RATA based on, and to the extent
of, one month's interest at the then applicable respective Pass-Through Rate on
the respective Uncertificated Balance of each such REMIC I Regular Interest.

                  SECTION 1.03 Rights of the NIMS Insurer.

                  Each of the rights of the NIMS Insurer set forth in this
Agreement shall exist so long as (i) the NIMS Insurer has undertaken to
guarantee certain payments of notes issued pursuant to an Indenture and (ii) any
series of notes issued pursuant to one or more Indentures remain outstanding or
the NIMS Insurer is owed amounts in respect of its guarantee of payment on such
notes; provided, however, the NIMS Insurer shall not have any rights hereunder
(except pursuant to Section 11.01 in the case of clause (ii) below) during the
period of time, if any, that (i) the NIMS Insurer has not undertaken to
guarantee certain payments of notes issued pursuant to the Indenture or (ii) any
default has occurred and is continuing under the insurance policy issued by the
NIMS Insurer with respect to such notes.

                                      -51-

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION 2.01. Conveyance of Mortgage Loans.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement, all other assets included or to be included in
REMIC I and the Cap Contract. Such assignment includes all interest and
principal received by the Depositor or the Master Servicer on or with respect to
the Mortgage Loans (other than payments of principal and interest due on such
Mortgage Loans on or before the Cut-off Date). The Depositor herewith delivers
to the Trustee an executed copy of the Mortgage Loan Purchase Agreement and the
Trustee, on behalf of the Certificateholders, acknowledges receipt of the same.

                  In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Trustee the following documents or
instruments with respect to each Mortgage Loan so transferred and assigned the
following documents or instruments (a "Mortgage File"):

                  (i) the original Mortgage Note, endorsed in blank, without
         recourse, or in the following form: "Pay to the order of Deutsche Bank
         National Trust Company, as Trustee under the applicable agreement,
         without recourse," with all prior and intervening endorsements showing
         a complete chain of endorsement from the originator to the Person so
         endorsing to the Trustee, or with respect to any lost Mortgage Note, an
         original Lost Note Affidavit; provided however, that such substitutions
         of Lost Note Affidavits for original Mortgage Notes may occur only with
         respect to Mortgage Loans, the aggregate Cut-off Date Principal Balance
         of which is less than or equal to 2.00% of the Pool Balance as of the
         Cut- off Date;

                  (ii) the original Mortgage with evidence of recording thereon,
         and a copy, certified by the appropriate recording office, of the
         recorded power of attorney, if the Mortgage was executed pursuant to a
         power of attorney, with evidence of recording thereon;

                  (iii)    an original Assignment of the Mortgage assigned in
         blank, without recourse;

                  (iv) the original recorded intervening Assignment or
         Assignments of the Mortgage showing a complete chain of assignment from
         the originator to the Person assigning the Mortgage to the Trustee as
         contemplated by the immediately preceding clause (iii) or the original
         unrecorded intervening Assignments;

                                      -52-

<PAGE>

                  (v) the original or copies of each assumption, modification,
         written assurance or substitution agreement, if any; and

                  (vi) the original lenders's title insurance policy or an
         attorney's opinion of title or similar guarantee of title acceptable to
         mortgage lenders generally in the jurisdiction where the Mortgaged
         Property is located, together with all endorsements or riders which
         were issued with or subsequent to the issuance of such policy, or in
         the event such original title policy is unavailable, a written
         commitment or uniform binder or preliminary report of title issued by
         the title insurance or escrow company.

                  If any of the documents referred to in Sections 2.01(ii),
(iii) or (iv) above has as of the Closing Date been submitted for recording but
either (x) has not been returned from the applicable public recording office or
(y) has been lost or such public recording office has retained the original of
such document, the obligations of the Depositor to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Trustee, or to the
appropriate Custodian on behalf of the Trustee, of a copy of each such document
certified by the Originator in the case of (x) above or the applicable public
recording office in the case of (y) above to be a true and complete copy of the
original that was submitted for recording and (2) if such copy is certified by
the Originator, delivery to the Trustee, or to the appropriate Custodian on
behalf of the Trustee, promptly upon receipt thereof of either the original or a
copy of such document certified by the applicable public recording office to be
a true and complete copy of the original. If the original lender's title
insurance policy was not delivered pursuant to Section 2.01(vi) above, the
Depositor shall deliver or cause to be delivered to the Trustee, or to the
appropriate Custodian on behalf of the Trustee, promptly after receipt thereof,
the original lender's title insurance policy. The Depositor shall deliver or
cause to be delivered to the Trustee, or to the appropriate Custodian on behalf
of the Trustee, promptly upon receipt thereof any other original documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.

                  The Master Servicer (in its capacity as Originator) shall
promptly (and in no event later than thirty (30) Business Days, subject to
extension upon a mutual agreement between the Master Servicer and the Trustee,
following the later of (i) the Closing Date, (ii) the date on which the
Originator receives the Assignment from the Custodian and (iii) the date of
receipt by the Master Servicer of the recording information for a Mortgage)
submit or cause to be submitted for recording, at no expense to the Trust Fund
or the Trustee, in the appropriate public office for real property records, each
Assignment referred to in Sections 2.01(iii) and (iv) above and shall execute
each original Assignment referred to in section 2.01(iii) above in the following
form: "Deutsche Bank National Trust Company, as Trustee under the applicable
agreement." In the event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Master Servicer (in its capacity as Originator)
shall promptly prepare or cause to be prepared a substitute Assignment or cure
or cause to be cured such defect, as the case may be, and thereafter cause each
such Assignment to be duly recorded. Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be submitted for
recording (except with respect to any Mortgage Loan located in Maryland) unless
such failure to record would result in a withdrawal or a downgrading by any
Rating Agency of the rating on any Class of Certificates; provided further,
however, each Assignment of

                                      -53-

<PAGE>

Mortgage shall be submitted for recording by the Master Servicer (in its
capacity as Originator) in the manner described above, at no expense to the
Trust Fund or the Trustee, upon the earliest to occur of: (i) reasonable
direction by Holders of Certificates entitled to at least 25% of the Voting
Rights, (ii) failure of the Master Servicer Termination Test, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the
Originator, (iv) the occurrence of a servicing transfer as described in Section
7.02 hereof and (v) if the Originator is not the Master Servicer and with
respect to any one assignment or Mortgage, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Master Servicer is unable to pay the cost
of recording the Assignments of Mortgage, such expense will be paid by the
Trustee and shall be reimbursable to the Trustee as an Extraordinary Trust Fund
Expense.

                  All original documents relating to the Mortgage Loans that are
not delivered to the Trustee, or to the appropriate Custodian on behalf of the
Trustee, are and shall be held by or on behalf of the Originator, the Depositor
or the Master Servicer, as the case may be, in trust for the benefit of the
Trustee on behalf of the Certificateholders. In the event that any such original
document is required pursuant to the terms of this Section to be a part of a
Mortgage File, such document shall be delivered promptly to the Trustee, or to
the appropriate Custodian on behalf of the Trustee. Any such original document
delivered to or held by the Depositor that is not required pursuant to the terms
of this Section to be a part of a Mortgage File, shall be delivered promptly to
the Master Servicer.

                  SECTION 2.02. Acceptance of REMIC I by the Trustee.

                  Subject to the provisions of Section 2.01 and subject to any
exceptions noted on the exception report described in the next paragraph below,
the Trustee acknowledges receipt (or, with respect to Mortgage Loans subject to
a Custodial Agreement, receipt by the respective Custodian as the duly appointed
agent of the Trustee) of the documents referred to in Section 2.01 (other than
such documents described in Section 2.01(v)) above and all interests and all
other assets included in the definition of "REMIC I" under clauses (i), (iii),
(iv) and (v) (to the extent of amounts deposited into the Distribution Account)
and declares that it, or such Custodian as its agent, holds and will hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "REMIC I" in trust for the exclusive use and benefit of all
present and future Certificateholders.

                  On or prior to the Closing Date, the Trustee agrees, for the
benefit of the Certificateholders, to execute and deliver (or cause the
Custodian to execute and deliver) to the Depositor and the NIMS Insurer an
acknowledgment of receipt of the Mortgage Note (with any exceptions noted),
substantially in the form attached as Exhibit C-3 hereto.

                  The Trustee agrees, for the benefit of the Certificateholders,
to review (or cause a Custodian on its behalf to review) each Mortgage Note
within 45 days of the Closing Date and to certify in substantially the form
attached hereto as Exhibit C-1 (or cause the Custodian to certify in the form of
the Initial Certification attached to the Custodial Agreement) that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such

                                      -54-

<PAGE>

documents described in Section 2.01(v)) required to be delivered to it pursuant
to this Agreement are in its possession, (ii) such documents have been reviewed
by it or such Custodian and are not mutilated, torn or defaced unless initialed
by the related borrower and relate to such Mortgage Loan, (iii) based on its or
the Custodian's examination and only as to the foregoing, the information set
forth in the Mortgage Loan Schedule that corresponds to items (1) through (3),
(6), (9), (10), (13), (15) and (19) of the definition of "Mortgage Loan
Schedule" accurately reflects information set forth in the Mortgage File. It is
herein acknowledged that, in conducting such review, the Trustee or such
Custodian was under no duty or obligation (i) to inspect, review or examine any
such documents, instruments, certificates or other papers to determine whether
they are genuine, enforceable, or appropriate for the represented purpose or
whether they have actually been recorded or that they are other than what they
purport to be on their face or (ii) to determine whether any Mortgage File
should include any of the documents specified in clause (v) of Section 2.01.

                  Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor, the Master Servicer and the NIMS Insurer
a final certification in the form annexed hereto as Exhibit C-2 (or shall cause
the Custodian to deliver to the Trustee, the Depositor, the Master Servicer and
the NIMS Insurer a final certification in the form attached to the Custodial
Agreement) evidencing the completeness of the Mortgage Files, with any
applicable exceptions noted thereon, with respect to all of the Mortgage Loans.
Upon the request of the Master Servicer, any exception report related to the
final certification shall be provided in an electronic computer readable format
as mutually agreed upon by the Master Servicer and the Trustee.

                  If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee or any Custodian finds any document or documents constituting a part of
a Mortgage File to be missing, mutilated, torn or defaced or does not conform to
the requirements identified above, at the conclusion of its review the Trustee
(or a Custodian on behalf of the Trustee) shall so notify the Depositor, the
NIMS Insurer and the Master Servicer. In addition, upon the discovery by the
Depositor, the NIMS Insurer, the Master Servicer or the Trustee of a breach of
any of the representations and warranties made by the Originator in the Mortgage
Loan Purchase Agreement in respect of any Mortgage Loan which materially
adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties.

                  The Trustee (or a Custodian on behalf of the Trustee) shall,
at the written request and expense of any Certificateholder, provide a written
report to such Certificateholder, of all Mortgage Files released to the Master
Servicer for servicing purposes.

                  SECTION 2.03. Repurchase or Substitution of Mortgage Loans by
                                the Originator or the Depositor; Payment of
                                Prepayment Charge Payment Amounts.

                  (a) Upon discovery or receipt of notice (including notice
under Section 2.02) of any materially defective document in, or that a document
is missing from, the Mortgage File or of the breach by the Originator of any
representation, warranty or covenant under the Mortgage Loan Purchase Agreement
in respect of any Mortgage Loan which materially adversely affects the value of
such Mortgage Loan or the interest therein of the Certificateholders, the
Trustee shall promptly

                                      -55-

<PAGE>

notify the Originator, the NIMS Insurer and the Master Servicer of such defect,
missing document or breach and request that the Originator deliver such missing
document or cure such defect or breach within 90 days from the date the
Originator was notified of such missing document, defect or breach, and if the
Originator does not deliver such missing document or cure such defect or breach
in all material respects during such period, the Master Servicer (or, in
accordance with Section 6.06(b), the Trustee) shall enforce the obligations of
the Originator under the Mortgage Loan Purchase Agreement to repurchase such
Mortgage Loan from REMIC I at the Purchase Price within 90 days after the date
on which the Originator was notified (subject to Section 2.03(d)) of such
missing document, defect or breach, if and to the extent that the Originator is
obligated to do so under the Mortgage Loan Purchase Agreement. The Purchase
Price for the repurchased Mortgage Loan shall be deposited in the Collection
Account, and the Trustee, upon receipt of written certification from the Master
Servicer of such deposit, shall release to the Originator the related Mortgage
File and shall request the Trustee to (and the Trustee shall) execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Originator shall furnish to it and as shall be necessary to
vest in the Originator any Mortgage Loan released pursuant hereto, and the
Trustee shall not have any further responsibility with regard to such Mortgage
File. In lieu of repurchasing any such Mortgage Loan as provided above, if so
provided in the Mortgage Loan Purchase Agreement, the Originator may cause such
Mortgage Loan to be removed from REMIC I (in which case it shall become a
Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage
Loans in the manner and subject to the limitations set forth in Section 2.03(c).
It is understood and agreed that the obligation of the Originator to cure or to
repurchase (or to substitute for) any Mortgage Loan as to which a document is
missing, a material defect in a document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Trustee on behalf of the
Certificateholders.

                  (b)(i) Promptly upon the earlier of discovery by the Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.

                  (ii)     Notwithstanding the provisions of Section 2.03(b)(i)
above,

                  (A) on the later of (x) the Master Servicer Remittance Date
         next following the earlier of discovery by the Master Servicer or
         receipt of notice by the Master Servicer of the breach of the
         representation made by the Master Servicer in Section 2.05(vii), which
         breach materially and adversely affects the interests of the Holders of
         the Class P Certificates to any Prepayment Charge and (y) the Master
         Servicer Remittance Date next following the Prepayment Period relating
         to such a breach, the Master Servicer shall deposit into the Collection
         Account the amount of the scheduled Prepayment Charge, less any amount
         collected and deposited by the Master Servicer into the Collection
         Account in respect of such Prepayment Charge; and

                  (B) on the later of (x) the Master Servicer Remittance Date
         next following the earlier of discovery by the Master Servicer or
         receipt of notice by the Master Servicer of the

                                      -56-

<PAGE>

         breach of the covenant made by the Master Servicer in Section
         2.05(viii), which breach materially and adversely affects the interests
         of the Holders of the Class P Certificates to any Prepayment Charge and
         (y) the Master Servicer Remittance Date next following the Prepayment
         Period relating to such a breach, the Master Servicer shall deposit
         into the Collection Account, as a Master Servicer Prepayment Charge
         Payment Amount, the amount of the waived Prepayment Charge, but only to
         the extent required under Section 2.03(b)(iii) below.

                  (iii)    If with respect to any Prepayment Period,

                  (A) the dollar amount of Prepayment Charges that are the
         subject of breaches by the Master Servicer of the covenant made by the
         Master Servicer in Section 2.05(viii), which breaches materially and
         adversely affects the interests of the Holders of the Class P
         Certificates to such Prepayment Charges, exceeds

                  (B) 5% of the total dollar amount of Prepayment Charges
         payable by Mortgagors in connection with Principal Prepayments on the
         related Mortgage Loans that occurred during such Prepayment Period,

then the amount required to be paid by the Master Servicer pursuant to Section
2.03(b)(ii)(B) above shall be limited to an amount, that when added to the
amount of Prepayment Charges actually collected by the Master Servicer in
respect of Prepayment Charges relating to Principal Prepayments on the related
Mortgage Loans that occurred during such Prepayment Period, will yield a sum
equal to 95% of the total dollar amount of Prepayment Charges (exclusive of (A)
Prepayment Charges not enforced or collected upon because (i) the enforceability
thereof shall have been limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally or
(ii) the collectability thereof shall have been limited due to acceleration in
connection with a foreclosure or other involuntary payment and (B) Prepayment
Charges waived by the Master Servicer when such waiver does not breach the
covenant set forth in Section 2.05(viii)) payable by Mortgagors in connection
with Principal Prepayments on the related Mortgage Loans that occurred during
such Prepayment Period.

                  (c) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a), in the case of the
Originator or Section 2.03(b), in the case of the Depositor, must be effected
prior to the date which is two years after the Startup Day for REMIC I.

                  As to any Deleted Mortgage Loan for which the Originator or
the Depositor substitutes a Qualified Substitute Mortgage Loan or Loans, such
substitution shall be effected by the Originator or the Depositor, as the case
may be, delivering to the Trustee (or a Custodian on behalf of the Trustee), for
such Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the
Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01, together with an Officers' Certificate providing that each such Qualified
Substitute Mortgage Loan satisfies the definition thereof and specifying the
Substitution Shortfall Amount (as described below), if any, in connection with
such substitution. The Trustee (or a Custodian on behalf of the Trustee) shall
acknowledge

                                      -57-

<PAGE>

receipt for such Qualified Substitute Mortgage Loan or Loans and, within ten
Business Days thereafter, review such documents as specified in Section 2.02 and
deliver to the Depositor, the NIMS Insurer, the Trustee and the Master Servicer,
with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit C-1, with any
applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Depositor, the NIMS Insurer and
the Master Servicer a certification substantially in the form of Exhibit C-2
hereto with respect to such Qualified Substitute Mortgage Loan or Loans, with
any applicable exceptions noted thereon. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution are not part of
REMIC I and will be retained by the Depositor or the Originator, as the case may
be. For the month of substitution, distributions to Certificateholders will
reflect the Monthly Payment due on such Deleted Mortgage Loan on or before the
Due Date in the month of substitution, and the Depositor or the Originator, as
the case may be, shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Mortgage Loan. The Depositor shall give or
cause to be given written notice to the Certificateholders and the NIMS Insurer
that such substitution has taken place, shall amend the Mortgage Loan Schedule
to reflect the removal of such Deleted Mortgage Loan from the terms of this
Agreement and the substitution of the Qualified Substitute Mortgage Loan or
Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the
Trustee and the NIMS Insurer. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and, in the case of a
substitution effected by the Originator, the Mortgage Loan Purchase Agreement,
including all applicable representations and warranties thereof.

                  For any month in which the Depositor or the Originator
substitutes one or more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans, the Master Servicer will determine the amount (the
"Substitution Shortfall Amount"), if any, by which the aggregate Purchase Price
of all such Deleted Mortgage Loans exceeds the aggregate of, as to each such
Qualified Substitute Mortgage Loan, the Scheduled Principal Balance thereof as
of the date of substitution, together with one month's interest on such
Scheduled Principal Balance at the applicable Net Mortgage Rate. On the date of
such substitution, the Depositor or the Originator, as the case may be, will
deliver or cause to be delivered to the Master Servicer for deposit in the
Collection Account an amount equal to the Substitution Shortfall Amount, if any,
and the Trustee, upon receipt of the related Qualified Substitute Mortgage Loan
or Loans and certification by the Master Servicer of such deposit, shall release
to the Depositor or the Originator, as the case may be, the related Mortgage
File or Files and shall request the Trustee to (and the Trustee shall) execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the Depositor or the Originator, as the case may be, shall deliver
to it and as shall be necessary to vest therein any Deleted Mortgage Loan
released pursuant hereto.

                  In addition, the Depositor or the Originator, as the case may
be, shall obtain at its own expense and deliver to the Trustee and the NIMS
Insurer an Opinion of Counsel to the effect that such substitution will not
cause (a) any federal tax to be imposed on any Trust REMIC, including without
limitation, any federal tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup date" under
Section 860G(d)(1) of the Code, or (b) any Trust REMIC to fail to qualify as a
REMIC at any time that any Certificate is outstanding.

                                      -58-

<PAGE>

                  (d) Upon discovery by the Depositor, the NIMS Insurer, the
Originator, the Master Servicer or the Trustee that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the party discovering such fact shall within two Business Days give
written notice thereof to the other parties. In connection therewith, the
Originator or the Depositor shall repurchase or, subject to the limitations set
forth in Section 2.03(c), substitute one or more Qualified Substitute Mortgage
Loans for the affected Mortgage Loan within 90 days of the earlier of discovery
or receipt of such notice with respect to such affected Mortgage Loan. Such
repurchase or substitution shall be made by the Originator. Any such repurchase
or substitution shall be made in the same manner as set forth in Section
2.03(a). The Trustee shall reconvey to the Depositor or the Originator, as the
case may be, the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.

                  SECTION 2.04. [Reserved].

                  SECTION 2.05. Representations, Warranties and Covenants of the
                                Master Servicer.

                  The Master Servicer hereby represents, warrants and covenants
to the Trustee, for the benefit of each of the Trustee, the Certificateholders
and to the Depositor that as of the Closing Date or as of such date specifically
provided herein:

                  (i) The Master Servicer is a corporation duly organized,
         validly existing and in good standing under the laws of the State of
         Delaware and is duly authorized and qualified to transact any and all
         business contemplated by this Agreement to be conducted by the Master
         Servicer in any state in which a Mortgaged Property is located or is
         otherwise not required under applicable law to effect such
         qualification and, in any event, is in compliance with the doing
         business laws of any such State, to the extent necessary to ensure its
         ability to enforce each Mortgage Loan and to service the Mortgage Loans
         in accordance with the terms of this Agreement;

                  (ii) The Master Servicer has the full corporate power and
         authority to service each Mortgage Loan, and to execute, deliver and
         perform, and to enter into and consummate the transactions contemplated
         by this Agreement and has duly authorized by all necessary corporate
         action on the part of the Master Servicer the execution, delivery and
         performance of this Agreement; and this Agreement, assuming the due
         authorization, execution and delivery thereof by the Depositor and the
         Trustee, constitutes a legal, valid and binding obligation of the
         Master Servicer, enforceable against the Master Servicer in accordance
         with its terms, except to the extent that (a) the enforceability
         thereof may be limited by bankruptcy, insolvency, moratorium,
         receivership and other similar laws relating to creditors' rights
         generally and (b) the remedy of specific performance and injunctive and
         other forms of equitable relief may be subject to the equitable
         defenses and to the discretion of the court before which any proceeding
         therefor may be brought;

                  (iii) The execution and delivery of this Agreement by the
         Master Servicer, the servicing of the Mortgage Loans by the Master
         Servicer hereunder, the consummation of any

                                      -59-

<PAGE>

         other of the transactions herein contemplated, and the fulfillment of
         or compliance with the terms hereof are in the ordinary course of
         business of the Master Servicer and will not (A) result in a breach of
         any term or provision of the charter or by-laws of the Master Servicer
         or (B) conflict with, result in a breach, violation or acceleration of,
         or result in a default under, the terms of any other material agreement
         or instrument to which the Master Servicer is a party or by which it
         may be bound, or any statute, order or regulation applicable to the
         Master Servicer of any court, regulatory body, administrative agency or
         governmental body having jurisdiction over the Master Servicer; and the
         Master Servicer is not a party to, bound by, or in breach or violation
         of any indenture or other agreement or instrument, or subject to or in
         violation of any statute, order or regulation of any court, regulatory
         body, administrative agency or governmental body having jurisdiction
         over it, which materially and adversely affects or, to the Master
         Servicer's knowledge, would in the future materially and adversely
         affect, (x) the ability of the Master Servicer to perform its
         obligations under this Agreement or (y) the business, operations,
         financial condition, properties or assets of the Master Servicer taken
         as a whole;

                  (iv) The Master Servicer is an approved seller/servicer for
         Fannie Mae or Freddie Mac in good standing and is a HUD approved
         mortgagee pursuant to Section 203 and Section 211 of the National
         Housing Act;

                  (v) Except as disclosed in the Prospectus Supplement, no
         litigation is pending against the Master Servicer that would materially
         and adversely affect the execution, delivery or enforceability of this
         Agreement or the ability of the Master Servicer to service the Mortgage
         Loans or to perform any of its other obligations hereunder in
         accordance with the terms hereof;

                  (vi) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Master Servicer of, or compliance by the Master
         Servicer with, this Agreement or the consummation of the transactions
         contemplated by this Agreement, except for such consents, approvals,
         authorizations or orders, if any, that have been obtained prior to the
         Closing Date;

                  (vii) The information set forth in the Prepayment Charge
         Schedule attached hereto as Schedule 2 (including the prepayment charge
         summary attached thereto) is complete, true and correct in all material
         respects at the date or dates respecting which such information is
         furnished and each Prepayment Charge is permissible and enforceable in
         accordance with its terms (except to the extent that (i) the
         enforceability thereof may be limited by bankruptcy, insolvency,
         moratorium, receivership and other similar laws relating to creditors'
         rights generally and (ii) the collectability thereof may be limited due
         to acceleration in connection with a foreclosure or other involuntary
         payment;

                  (viii) The Master Servicer will not waive any Prepayment
         Charge or part of a Prepayment Charge unless, (i) the enforceability
         thereof shall have been limited by bankruptcy, insolvency, moratorium,
         receivership and other similar laws relating to creditors' rights
         generally or (ii) the collectability thereof shall have been limited
         due to acceleration in connection with a foreclosure or other
         involuntary payment or (iii) in the Master Servicer's

                                      -60-

<PAGE>

         reasonable judgment as described in Section 3.01 hereof, (x) such
         waiver relates to a default or a reasonably foreseeable default, (y)
         such waiver would maximize recovery of total proceeds taking into
         account the value of such Prepayment Charge and related Mortgage Loan
         and (z) doing so is standard and customary in servicing similar
         Mortgage Loans (including any waiver of a Prepayment Charge in
         connection with a refinancing of a Mortgage Loan that is related to a
         default or a reasonably foreseeable default). In no event will the
         Master Servicer waive a Prepayment Charge in connection with a
         refinancing of a Mortgage Loan that is not related to a default or a
         reasonably foreseeable default;

                  (ix) The information set forth in the "monthly tape" provided
         to the Trustee or any of its affiliates is true and correct in all
         material respects;

                  (x) With respect to each Mortgage Loan, the Assignment is in
         recordable form; (except that the name of the assignee and the
         recording information with respect to such Mortgage Loan is blank) and
         each Mortgage Loan was originated in the name of the Master Servicer or
         an affiliate thereof; and

                  (xi) The Master Servicer has fully furnished and will continue
to fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans Union
Credit Information Company or their successors on a monthly basis.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee or to a Custodian, as the case may be, and
shall inure to the benefit of the Trustee, the Depositor and the
Certificateholders. Upon discovery by any of the Depositor, the NIMS Insurer,
the Master Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan, Prepayment Charge or the interests therein of
the Certificateholders, the party discovering such breach shall give prompt
written notice (but in no event later than two Business Days following such
discovery) to the NIMS Insurer and the Trustee. Subject to Section 7.01, the
obligation of the Master Servicer set forth in Section 2.03(b) to cure breaches
(or in the case of the representations, warranties and covenants set forth in
Section 2.05(vii) and Section 2.05(viii) above, to otherwise remedy such
breaches pursuant to Section 2.03(b)) shall constitute the sole remedies against
the Master Servicer available to the Certificateholders, the Depositor or the
Trustee on behalf of the Certificateholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.05. The
preceding sentence shall not, however, limit any remedies available to the
Certificateholders, the Depositor or the Trustee on behalf of the
Certificateholders (other than in the case of the representations, warranties
and covenants set forth in Section 2.05(vii) and Section 2.05(viii) above)
pursuant to the Mortgage Loan Purchase Agreement signed by the Master Servicer
in its capacity as Originator, respecting a breach of the representations,
warranties and covenants of the Master Servicer in its capacity as Originator
contained in such Mortgage Loan Purchase Agreement.

                  SECTION 2.06. Issuance of the REMIC I Regular Interests and
                                the Class R-I Interest.

                                      -61-

<PAGE>

                  The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the Mortgage Files, subject to the provisions of
Section 2.01 and Section 2.02, together with the assignment to it of all other
assets included in REMIC I, the receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor, has executed, authenticated and delivered to or upon the order
of the Depositor, the Class R-I Interest in authorized denominations. The
interests evidenced by the Class R-I Interest, together with the REMIC I Regular
Interests, constitute the entire beneficial ownership interest in REMIC I. The
rights of the Class R Certificateholders and REMIC II (as holder of the REMIC I
Regular Interests) to receive distributions from the proceeds of REMIC I in
respect of the Class R-I Interest and the REMIC I Regular Interests,
respectively, and all ownership interests evidenced or constituted by the Class
R-I Interest and the REMIC I Regular Interests, shall be as set forth in this
Agreement.

                  SECTION 2.07. Conveyance of the REMIC I Regular Interests;
                                Acceptance of REMIC II by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests for the benefit of the Class R
Certificateholders (as holder of the Class R-I Interest and the Class R-II
Interest) and REMIC II (as holder of the REMIC I Regular Interests). The Trustee
acknowledges receipt of the REMIC I Regular Interests and declares that it holds
and will hold the same in trust for the exclusive use and benefit of all present
and future Class R Certificateholders (as holder of the Class R-I Interest and
the Class R-II Interest) and REMIC II (as holder of the REMIC I Regular
Interests). The rights of the Class R Certificateholders and REMIC II (as holder
of the REMIC I Regular Interest) to receive distributions from the proceeds of
REMIC II in respect of the Class R-II Interest and REMIC II Regular Interests,
respectively, and all ownership interests evidenced or constituted by the Class
R-II Interest and the REMIC II Regular Interests, shall be as set forth in this
Agreement.

                  SECTION 2.08. Issuance of Class R Certificates.

                  The Trustee acknowledges the assignment to it of the REMIC I
Regular Interests and, concurrently therewith and in exchange therefor, pursuant
to the written request of the Depositor executed by an officer of the Depositor
or the Trustee has executed, authenticated and delivered to or upon the order of
the Depositor, the Class R Certificates in authorized denominations. The
interests evidenced by the Class R Certificates, together with the REMIC II
Certificates, constitute the entire beneficial ownership interest in REMIC II.

                  SECTION 2.09. Conveyance of the Class M-2 Interest; Acceptance
                                of REMIC III by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the Class M-2 Interest for the benefit of the Class R-X
Certificateholders (as holder of the Class R-III Interest) and REMIC III (as
holder of the Class M-2 Interest). The Trustee acknowledges receipt of the Class
M-2 Interest and declares that it holds and

                                      -62-

<PAGE>

will hold the same in trust for the exclusive use and benefit of all present and
future Class R-X Certificateholders (as holder of the Class R-III Interest) and
REMIC III (as holder of the Class M-2 Interest). The rights of the Class R-X
Certificateholders and REMIC III (as holder of the Class M-2 Interest) to
receive distributions from the proceeds of REMIC III in respect of the Class
R-III Interest and the Class M-2 Interest, respectively, and all ownership
interests evidenced or constituted by the Class R-III Interest and the Class M-2
Certificates, shall be as set forth in this Agreement.

                  SECTION 2.10. Conveyance of the Class M-3 Interest; Acceptance
                                of REMIC IV by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the Class M-3 Interest for the benefit of the Class R-X
Certificateholders (as holder of the Class R-IV Interest) and REMIC IV (as
holder of the Class M-3 Interest). The Trustee acknowledges receipt of the Class
M-3 Interest and declares that it holds and will hold the same in trust for the
exclusive use and benefit of all present and future Class R-X Certificateholders
(as holder of the Class R-IV Interest) and REMIC IV (as holder of the Class M-3
Interest). The rights of the Class R-X Certificateholders and REMIC IV (as
holder of the Class M-3 Interest) to receive distributions from the proceeds of
REMIC IV in respect of the Class R-IV Interest and the Class M-3 Interest,
respectively, and all ownership interests evidenced or constituted by the Class
R-IV Interest and the Class M-3 Certificates, shall be as set forth in this
Agreement.

                  SECTION 2.11. Conveyance of the Class M-4 Interest; Acceptance
                                of REMIC V by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the Class M-4 Interest for the benefit of the Class R-X
Certificateholders (as holder of the Class R-V Interest) and REMIC V (as holder
of the Class M-4 Interest). The Trustee acknowledges receipt of the Class M-4
Interest and declares that it holds and will hold the same in trust for the
exclusive use and benefit of all present and future Class R-X Certificateholders
(as holder of the Class R-V Interest) and REMIC V (as holder of the Class M-4
Interest). The rights of the Class R-X Certificateholders and REMIC V (as holder
of the Class M-4 Interest) to receive distributions from the proceeds of REMIC V
in respect of the Class R-V Interest and the Class M-4 Interest, respectively,
and all ownership interests evidenced or constituted by the Class R-V Interest
and the Class M-4 Certificates, shall be as set forth in this Agreement.

                  SECTION 2.12. Conveyance of the Class M-4 Interest; Acceptance
                                of REMIC VI by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the Class M-5 Interest for the benefit of the Class R-X
Certificateholders (as holder of the Class R-VI Interest) and REMIC VI (as
holder of the Class M-5 Interest). The Trustee acknowledges receipt of the Class
M-5 Interest and declares that it holds and will hold the same in trust for the
exclusive use and benefit of all present and future Class R-X

                                      -63-

<PAGE>

Certificateholders (as holder of the Class R-VI Interest) and REMIC VI (as
holder of the Class M-5 Interest). The rights of the Class R-X
Certificateholders and REMIC VI (as holder of the Class M-5 Interest) to receive
distributions from the proceeds of REMIC VI in respect of the Class R-VI
Interest and the Class M-5 Interest, respectively, and all ownership interests
evidenced or constituted by the Class R-VI Interest and the Class M-5
Certificates, shall be as set forth in this Agreement.

                  SECTION 2.13. Conveyance of the Class CE Interest; Acceptance
                                of REMIC VII by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the Class CE Interest for the benefit of the Class R-X Certificateholders
(as holder of the Class R-VII Interest) and REMIC VII (as holder of the Class CE
Interest). The Trustee acknowledges receipt of the Class CE Interest and
declares that it holds and will hold the same in trust for the exclusive use and
benefit of all present and future Class R-X Certificateholders (as holder of the
Class R-VII Interest) and REMIC VII (as holder of the Class CE Interest). The
rights of the Class R-X Certificateholders and REMIC VII (as holder of the Class
CE Interest) to receive distributions from the proceeds of REMIC VII in respect
of the Class R-VII Interest and the Class CE Interest, respectively, and all
ownership interests evidenced or constituted by the Class R-VII Interest and the
Class CE Certificates, shall be as set forth in this Agreement.

                  SECTION 2.14. Conveyance of the Class P Interest; Acceptance
                                of REMIC VIII by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the Class P Interest for the benefit of the Class R-X Certificateholders
(as holder of the Class R-VIII Interest) and REMIC VIII (as holder of the Class
P Interest). The Trustee acknowledges receipt of the Class P Interest and
declares that it holds and will hold the same in trust for the exclusive use and
benefit of all present and future Class R-X Certificateholders (as holder of the
Class R-VIII Interest) and REMIC VIII (as holder of the Class P Interest). The
rights of the Class R-X Certificateholders and REMIC VIII (as holder of the
Class P Interest) to receive distributions from the proceeds of REMIC VIII in
respect of the Class R-VIII Interest and the Class P Interest, respectively, and
all ownership interests evidenced or constituted by the Class R-VIII Interest
and the Class P Certificates, shall be as set forth in this Agreement.

                  SECTION 2.15. Issuance of Class R-X Certificates.

                  The Trustee acknowledges the assignment to it of the Class M-2
Interest, Class M-3 Interest, Class M-4 Interest, Class M-5 Interest, Class CE
Interest and Class P Interest and, concurrently therewith and in exchange
therefor, pursuant to the written request of the Depositor executed by an
officer of the Depositor or the Trustee has executed, authenticated and
delivered to or upon the order of the Depositor, the Class R-X Certificates in
authorized denominations. The interests evidenced by the Class R-X Certificates,
together with the Class M-2 Certificates, Class M- 3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class CE Certificates and Class P

                                      -64-

<PAGE>

Certificates, constitute the entire beneficial ownership interest in REMIC III,
REMIC IV, REMIC V, REMIC VI, REMIC VII and REMIC VIII, respectively.

                                      -65-

<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

                  SECTION 3.01. Master Servicer to Act as Master Servicer.

                  The Master Servicer shall service and administer the Mortgage
Loans on behalf of the Trustee and in the best interests of and for the benefit
of the Certificateholders (as determined by the Master Servicer in its
reasonable judgment) in accordance with (i) the terms of the respective Mortgage
Loans and any insurance policies related thereto, (ii) all Applicable
Regulations, (iii) the terms of this Agreement, (iv) the Loss Mitigation Action
Plan, if applicable, and (v) to the extent consistent with the preceding
requirements, in the same manner in which it services and administers similar
mortgage loans for its own portfolio, giving due consideration to customary and
usual standards of practice of prudent mortgage lenders and loan servicers
administering similar mortgage loans but without regard to:

                  (i) any relationship that the Master Servicer, any
         Sub-Servicer or any Affiliate of the Master Servicer or any
         Sub-Servicer may have with the related Mortgagor;

                  (ii) the ownership of any Certificate by the Master Servicer
         or any Affiliate of the Master Servicer;

                  (iii) the Master Servicer's obligation to make Advances or
         Servicing Advances; or

                  (iv) the Master Servicer's or any Sub-Servicer's right to
         receive compensation for its services hereunder or with respect to any
         particular transaction (the "Servicing Standard").

                  Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 6.06, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee, in accordance with the servicing
standards set forth above, (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, or of forbearance, or
of modification and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties, (ii) to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure to convert the ownership of
such properties, and to hold or cause to be held title to such properties, in
the name of the Trust Fund, on behalf of the Trustee and the Certificateholders,
(iii) to market, sell and transfer title of REO Properties held in the name of
the Trust Fund to third party purchasers upon terms and conditions the Master
Servicer deems reasonable under the Servicing Standard, (4) to bring or respond
to civil actions or complaints (in its own name or that of the Trust Fund or the
Trustee on behalf of the Trust Fund) related to any Mortgage Loan, Mortgaged
Property or REO Property held by the Trust Fund

                                      -66-

<PAGE>

and (5) execute any other document necessary or appropriate to enable the Master
Servicer to carry out its servicing and administrative duties hereunder
consistent with the Servicing Standard.

                  At the written request of the Master Servicer, the Trustee
shall execute and furnish to the Master Servicer such documents as are necessary
or appropriate to enable the Master Servicer to carry out its servicing and
administrative duties hereunder. By execution of this Agreement, the Trustee, on
behalf of the Trust Fund, hereby grants to the Master Servicer a power of
attorney to execute any and all documents necessary to carry out any and all
servicing duties described in this Agreement (including the taking of and
transferring title of REO Properties to third parties held in the name of the
Trustee for the benefit of the Trust) and expressly confirms that this paragraph
along with the face page and a copy of the signature page (duly executed) to
this Agreement shall constitute the power of attorney for evidentiary and/or
recording purposes. The Trustee shall not be liable for the actions of the
Master Servicer or any Sub-Servicers under such powers of attorney.

                  Subject to Section 3.04(d) hereof, in accordance with the
Servicing Standard, the Master Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.04(d), and further as provided in Section
3.05(a). Any cost incurred by the Master Servicer or by Sub-Servicers in
effecting the timely payment of taxes and assessments on a Mortgaged Property
shall not, for the purpose of calculating distributions to Certificateholders,
be added to the unpaid Stated Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.

                  Consistent with the terms of this Agreement, the Master
Servicer may waive, modify or vary any term of any Mortgage Loan or consent to
the postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if such waiver, modification, postponement or
indulgence is in conformity with the Servicing Standard; PROVIDED, HOWEVER,
that:

                  (A) the Master Servicer shall not make future advances (except
         as provided in Section 4.03);

                  (B) the Master Servicer shall not permit any modification with
         respect to any Mortgage Loan that would change the Mortgage Rate, defer
         or forgive the payment of any principal or interest payments, reduce
         the outstanding Stated Principal Balance (except for reductions
         resulting from actual payments of principal) or extend the final
         maturity date on such Mortgage Loan (unless as provided in Section
         3.02, (i) the Mortgagor is in default with respect to the Mortgage Loan
         or (ii) such default is, in the judgment of the Master Servicer,
         reasonably foreseeable); and

                  (C) the Master Servicer shall not consent to (i) partial
         releases of Mortgages, (ii) alterations, (iii) removal, demolition or
         division of properties subject to Mortgages, (iv) modification or (v)
         second mortgage subordination agreements with respect to any Mortgage
         Loan that would: (i) affect adversely the status of any Trust REMIC as
         a REMIC,(ii) cause any Trust REMIC to be subject to a tax on
         "prohibited transactions" or "contributions" pursuant to the REMIC
         Provisions, or (iii) both (x) effect an exchange or reissuance of such

                                      -67-

<PAGE>

         Mortgage Loan under Section 1001 of the Code (or Treasury regulations
         promulgated thereunder) and (y) cause any Trust REMIC constituting part
         of the Trust Fund to fail to qualify as a REMIC under the Code or the
         imposition of any tax on "prohibited transactions" or "contributions"
         after the Startup Day under the REMIC Provisions.

                  To the extent consistent with the terms of this Agreement,
including Section 2.03 and Section 2.05, the Master Servicer may waive (or
permit a Sub-Servicer to waive) a Prepayment Charge only under the following
circumstances: (i) such waiver is standard and customary in servicing similar
Mortgage Loans and (ii) such waiver relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of the Master
Servicer, maximize recovery of total proceeds taking into account the value of
such Prepayment Charge and the related Mortgage Loan.

                  The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement. All references to Master Servicer in this Agreement shall be deemed
to include any Sub-Servicer duly appointed by the Master Servicer pursuant to
this Agreement.

                  SECTION 3.02. Collection of Certain Mortgage Loan Payments.

                  The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, penalty interest, or (ii) extend the due dates
for the Monthly Payments due on a Mortgage Note for a period of not greater than
180 days; provided that any extension pursuant to clause (ii) above shall not
affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder. The NIMS Insurer's prior written consent shall be
required for any modification, waiver or amendment if the amendment if the
aggregate number of outstanding Mortgage Loans which have been modified, waived
or amended exceeds 5% of the number of Mortgage Loans as of the Cut-off Date. In
the event of any such arrangement pursuant to clause (ii) above, the Master
Servicer shall make timely advances on such Mortgage Loan during such extension
pursuant to Section 4.03 and in accordance with the amortization schedule of
such Mortgage Loan without modification thereof by reason of such arrangements.

                  Notwithstanding the foregoing, in the event that any Mortgage
Loan is in default or, in the judgment of the Master Servicer, such default is
reasonably foreseeable, the Master Servicer, consistent with the Servicing
Standard, may also waive, modify or vary any term of such Mortgage Loan
(including modifications that would change the Mortgage Rate, forgive the
payment of principal or interest or extend the final maturity date of such
Mortgage Loan), accept payment from the related Mortgagor of an amount less than
the Stated Principal Balance in final satisfaction of such Mortgage Loan, or
consent to the postponement of strict compliance with any such term or otherwise
grant indulgence to any Mortgagor (any and all such waivers, modifications,
variances, forgiveness of principal or interest, postponements, or indulgences
collectively referred to herein as

                                      -68-

<PAGE>

"forbearance"), PROVIDED, HOWEVER, that in determining which course of action
permitted by this sentence it shall pursue, the Master Servicer shall adhere to
the Loss Mitigation Action Plan. The Master Servicer's analysis supporting any
forbearance and the conclusion that any forbearance meets the standards of
Section 3.01 and the Loss Mitigation Action Plan shall be reflected in writing
in the Mortgage File.

                  In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances
that were made by the Master Servicer in a manner not consistent with the terms
of the related Mortgage Note and this Agreement, the Master Servicer, upon
discovery or receipt of notice thereof, immediately shall deliver to the Trustee
for deposit in the Distribution Account from its own funds the amount of any
such shortfall and shall indemnify and hold harmless the Trust Fund, the
Trustee, the Depositor and any successor master servicer in respect of any such
liability. Such indemnities shall survive the termination or discharge of this
Agreement.

                  SECTION 3.03. [Reserved].

                  SECTION 3.04. Collection Account, Escrow Account and
                                Distribution Account.

                  (a) COLLECTION ACCOUNT. On behalf of the Trust Fund, the
Master Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain in the name of the Trustee one
or more accounts (such account or accounts, the "Collection Account") in
accordance with this Section 3.04, held in trust for the benefit of the Trustee
and the Certificateholders.

                  (b) DEPOSITS TO THE COLLECTION ACCOUNT. On behalf of the Trust
Fund, the Master Servicer shall deposit or cause to be deposited in the clearing
account (which account must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Master Servicer's receipt thereof, and shall
thereafter deposit in the Collection Account, in no event more than two Business
Days after the deposit of such funds into the clearing account, as and when
received or as otherwise required hereunder, and retain therein, the following
payments and collections received or made by it subsequent to the Cut-off Date
with respect to the Mortgage Loans, or payments (other than Principal
Prepayments) received by it on or prior to the Cut-off Date but allocable to a
Due Period subsequent thereto:

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

                  (ii) all payments on account of interest on the Mortgage Loans
         and REO Properties adjusted to the Net Mortgage Rate;

                  (iii) all Insurance Proceeds and Liquidation Proceeds (other
         than proceeds to be held in the Escrow Account and applied to the
         restoration or repair of the Mortgaged

                                      -69-

<PAGE>

         Property or released to the Mortgagor in accordance with the Servicing
         Standard) and any amounts received in respect of the rental of any REO
         Property prior to REO Disposition;

                  (iv) all proceeds related to the purchase, substitution or
         repurchase of any Mortgage Loan or REO Property in accordance with
         Section 2.03;

                  (v) any amounts required to be deposited by the Master
         Servicer pursuant to Section 3.09 in connection with the deductible
         clause in any blanket hazard insurance policy, such deposit being made
         from the Master Servicer's own funds, without reimbursement therefor;

                  (vi) any amounts required to be deposited by the Master
         Servicer pursuant to Section 3.06 in connection with any losses
         realized on Permitted Investments with respect to funds held in the
         Collection Account;

                  (vii) all amounts required to be deposited in connection with
         shortfalls in principal amount of Qualified Substitute Mortgage Loans
         pursuant to Section 2.03 (for purposes of this clause (vii), the
         Cut-off Date with respect to any Qualified Substitute Mortgage Loan
         shall be deemed to be the date of substitution); and

                  (viii) all Prepayment Charges collected by the Master
         Servicer, all Prepayment Charges payable by the Master Servicer
         pursuant to Section 2.03(b)(ii)(A) and all Master Servicer Prepayment
         Charge Payment Amounts payable by the Master Servicer pursuant to
         Section 2.03(b)(ii)(B) as limited by Section 2.03(b)(iii).

                  The foregoing requirements for deposit to the Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, assumption fees, insufficient funds charges, modification fees and
other ancillary fees (but not Prepayment Charges) need not be deposited by the
Master Servicer in the Collection Account and shall upon collection, belong to
the Master Servicer as additional compensation for its servicing activities. In
the event the Master Servicer shall deposit in the Collection Account any amount
not required to be deposited therein, it may at any time withdraw such amount
from the Collection Account, any provision herein to the contrary
notwithstanding.

                  (c) ESCROW ACCOUNT. The Master Servicer shall segregate and
hold all funds collected and received pursuant to each Mortgage Loan which
constitute Escrow Payments separate and apart from any of its own funds and
general assets and shall establish and maintain in the name of the Trustee one
or more accounts (such account or accounts, the "Escrow Account") held in trust
for the benefit of the Certificateholders and the Trustee.

                  (d) DEPOSITS TO THE ESCROW ACCOUNT. The Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Escrow Account,
in no event

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<PAGE>

more than two Business Days after the deposit of such funds into the clearing
account, as and when received or as otherwise required hereunder, and retain
therein:

                  (i) all Escrow Payments collected on account of the Mortgage
         Loans, for the purpose of effecting timely payment of any such items as
         required under the terms of this Agreement; and

                  (ii) all Insurance Proceeds which are to be applied to the
         restoration or repair of any Mortgaged Property.

                  (e) DISTRIBUTION ACCOUNT. On behalf of the Trust Fund, the
Trustee shall segregate and hold all funds collected and received pursuant to
this Agreement separate and apart from any of its own funds and general assets
and shall establish and maintain in the name of the Trust Fund one or more
segregated accounts (such account or accounts, the "Distribution Account"), held
in trust for the benefit of the Certificateholders.

                  (f) TRUSTEE DEPOSITS TO THE DISTRIBUTION ACCOUNT. Upon
receipt, the Trustee shall deposit or cause to be deposited into the
Distribution Account all payments of any nature received from the Master
Servicer in accordance with this Agreement. The Trustee shall deposit in the
Distribution Account any amounts required to be deposited pursuant to Section
3.06 in connection with losses realized on Permitted Investments with respect to
funds held in the Distribution Account. Furthermore, promptly upon receipt of
any Stayed Funds, whether from the Master Servicer, a trustee in bankruptcy, or
federal bankruptcy court or other source, the Trustee shall deposit such funds
in the Distribution Account, subject to withdrawal thereof pursuant to Section
7.02(b) or as otherwise permitted hereunder.

                  (g) MASTER SERVICER TRANSFER OF FUNDS TO THE DISTRIBUTION
ACCOUNT. On behalf of the Trust Fund, the Master Servicer shall deliver to the
Trustee in immediately available funds for deposit in the Distribution Account
by 3:00 p.m. (New York time) on the Master Servicer Remittance Date, (i) that
portion of Available Funds (calculated without regard to the references in
clause (2) of the definition thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account, (ii) without duplication, the amount of all Prepayment
Charges collected by the Master Servicer, all Prepayment Charges payable by the
Master Servicer pursuant to Section 2.03(b)(ii)(A) and all Master Servicer
Prepayment Charge Payment Amounts payable by the Master Servicer pursuant to
Section 2.03(b)(ii)(B), subject to Section 2.03(b)(iii) (in each case to the
extent not related to Principal Prepayments occurring after the related
Prepayment Period) and (iii) any amounts reimbursable to an Advancing Person
pursuant to Section 3.23 and the terms of the related Advance Facility.

                  In addition, the Master Servicer shall deliver to the Trustee
from time to time as required by this Agreement, for deposit and the Trustee
shall so deposit, in the Distribution Account:

                  (i) any Advances, as required pursuant to Section 4.03;

                  (ii) any amounts required to be deposited pursuant to Section
         3.13 in connection with any REO Property;

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<PAGE>

                  (iii) any amounts to be paid in connection with a purchase of
         Mortgage Loans and REO Properties pursuant to Section 3.16 and Section
         9.01;

                  (iv) any Compensating Interest as required pursuant to Section
         4.03(e);

                  (v) any Stayed Funds, as soon as permitted by the federal
         bankruptcy court having jurisdiction in such matters;

                  (vi) any amounts required to be paid by the Master Servicer
         pursuant to Section 3.06 in connection with any losses realized on
         Permitted Investments with respect to funds held in the Collection
         Account; and

                  (v) any amounts required to be paid to the Trustee from the
         assets of the Trust Fund on deposit in the Collection Account pursuant
         to this Agreement, including but not limited to amounts required to be
         paid to the Trustee pursuant to Section 7.02 and Section 8.05.

                  Funds held in the Collection Account pursuant to Section
3.04(b) may at any time be delivered by the Master Servicer to the Trustee for
deposit into the Distribution Account and for all purposes of this Agreement
shall be deemed to be a part of the Collection Account until the Business Day
prior to the Distribution Date; provided, however, that the Trustee shall have
the sole authority to withdraw any funds held pursuant to this paragraph. In the
event the Master Servicer shall deliver to the Trustee for deposit in the
Distribution Account any amount not required to be deposited therein, it may at
any time request that the Trustee withdraw such amount from the Distribution
Account and remit to it any such amount, any provision herein to the contrary
notwithstanding.

                  (h) INVESTMENT OF ACCOUNT FUNDS. Funds on deposit in the
Collection Account, the Distribution Account, any REO Account and any Escrow
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.06. Any investment earnings or interest paid
on funds deposited in the Collection Account, any REO Account and any Escrow
Account (subject to Section 3.05(b)) shall accrue to the benefit of the Master
Servicer and the Master Servicer shall be entitled to retain and withdraw such
interest from each such account on a daily basis. Any investment earnings or
interest paid on funds deposited in the Distribution Account, shall accrue to
the benefit of the Trustee and the Trustee shall be entitled to retain and
withdraw such interest from each such account on a daily basis.

                  Funds on deposit in the Net WAC Rate Reserve Carryover Account
may be invested in Permitted Investments in accordance with Section 3.06 and
Section 4.10 (with respect to the Net WAC Rate Carryover Reserve Account) and
any investment earnings or interest paid shall accrue to the benefit of the
party designated in such section.

                  (i) CREATION, LOCATION AND SUBSEQUENT TRANSFERS OF ACCOUNTS.
Each account created pursuant to this Agreement must be an Eligible Account. On
or prior to the Closing Date, the Master Servicer and the Trustee shall give
notice, to each other, the NIMS Insurer and the Depositor of the location of any
account created by it pursuant to this Agreement. From time to time, the Master
Servicer and the Trustee may each transfer any account created by it to a
different

                                      -72-

<PAGE>

depository institution provided that upon such transfer the written notice is
provided to all other parties listed in the preceding sentence.

                  SECTION 3.05. Permitted Withdrawals From the Collection
                                Account, Escrow Account and Distribution
                                Account.

                  (a) COLLECTION ACCOUNT. The Master Servicer may, from time to
time, withdraw from the Collection Account for the following purposes or as
described in Section 4.03:

                  (i) to remit to the Trustee for deposit in the Distribution
         Account the amounts required to be so remitted pursuant to Section
         3.04(g) or permitted to be so remitted pursuant to the last paragraph
         of Section 3.04(g);

                  (ii) subject to Section 3.12(c), to reimburse itself for (a)
         any unpaid Servicing Fees, (b) any unreimbursed Servicing Advances and
         (c) any unreimbursed Advances, the Master Servicer's right to reimburse
         itself pursuant to this subclause (ii) being limited to any Late
         Collections, Liquidation Proceeds, and Insurance Proceeds received on
         the related Mortgage Loan and any amounts received in respect of the
         rental of the related REO Property prior to an REO Disposition that
         represent payments of principal and/or interest respecting which any
         such advance was made;

                  (iii) to reimburse itself for (a) any unpaid Servicing Fees to
         the extent not recoverable under Section 3.05(a)(ii) and (b) any unpaid
         Advances or Servicing Advances that have been deemed Nonrecoverable
         Advances or Nonrecoverable Servicing Advances;

                  (iv)     to pay to itself any Prepayment Interest Excess;

                  (v) to reimburse itself for any amounts paid pursuant to
         Section 3.12(b) (and not otherwise previously reimbursed);

                  (vi) to pay to itself as servicing compensation any interest
         earned on funds in the Collection Account;

                  (vii) subject to Section 4.03(b), to reimburse the Master
         Servicer in respect of any unreimbursed Advances to the extent of funds
         held in the Collection Account for future distribution that were not
         included in Available Funds for the preceding Distribution Date;

                  (viii) to reimburse the Master Servicer or the Depositor for
         expenses incurred by or reimbursable to the Master Servicer or the
         Depositor, as the case may be, pursuant to Section 6.03;

                  (ix) to remit to the Trustee any amounts that the Trustee is
         permitted to be paid or reimbursed from the assets of the Trust Fund
         pursuant to the terms of this Agreement, including the terms of Section
         7.02(a) and Section 8.05 of this Agreement;

                                      -73-

<PAGE>

                  (x) to reimburse the NIMS Insurer, the Master Servicer (if the
         Master Servicer is not an Affiliate of the Originator) or the Trustee,
         as the case may be, for enforcement expenses reasonably incurred in
         respect of the breach or defect giving rise to the purchase obligation
         under Section 2.03 of this Agreement that were included in the Purchase
         Price of the Mortgage Loan, including any expenses arising out of the
         enforcement of the purchase obligation;

                  (xi) to pay to the Master Servicer, the Depositor or the
         Originator, as the case may be, with respect to each Mortgage Loan that
         has previously been purchased or replaced pursuant to Section 2.03 or
         Section 3.16(a) all amounts received thereon subsequent to the date of
         purchase or substitution, as the case may be;

                  (xi) to transfer funds in the Collection Account maintained at
         a particular depository to the Collection Account maintained at a
         different depository, pursuant to Section 3.04(i);

                  (xii)    [reserved];

                  (xii) if Litton Loan Servicing LP is not the Special
         Sub-Servicer, to pay any successor Special Sub-Servicer the Special
         Servicing Fee; and

                  (xiii) to clear and terminate the Collection Account upon the
         termination of this Agreement.

                  On each Business Day as of the commencement of which the
balance on deposit in the Collection Account exceeds $75,000 following any
withdrawals pursuant to the next succeeding sentence, the amount of such excess
shall be remitted to the Trustee, but only if the Collection Account constitutes
an Eligible Account solely pursuant to clause (ii) of the definition of
"Eligible Account." If the balance on deposit in the Collection Account exceeds
$75,000 as of the commencement of business on any Business Day and the
Collection Account constitutes an Eligible Account solely pursuant to clause
(ii) of the definition of "Eligible Account," the Master Servicer shall, on or
before 3:00 p.m. New York time on such Business Day, withdraw from the
Collection Account any and all amounts payable or reimbursable to the Depositor,
the Master Servicer, the Trustee or any Sub-Servicer pursuant to Section 3.05
and shall pay such amounts to the Persons entitled thereto.

                  The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Master Servicer shall deposit in
the Collection Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.

                  The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (vii),
(viii) and (xi) above. The Master Servicer shall provide written notification to
the Trustee and the

                                      -74-

<PAGE>

NIMS Insurer on or prior to the next succeeding Master Servicer Reporting Date,
upon making any withdrawals from the Collection Account pursuant to subclause
(viii) above.

                  (b)      ESCROW ACCOUNT.  The Master Servicer may, from time
to time, withdraw from the Escrow Account for the following purposes:

                  (i) to effect payments of ground rents, taxes, assessments,
         water rates, hazard insurance premiums and comparable items;

                  (ii) to reimburse the Master Servicer for any Servicing
         Advance made by the Master Servicer with respect to a related Mortgage
         Loan but only from amounts received on the related Mortgage Loan which
         represent late payments or Late Collections of Escrow Payments
         thereunder;

                  (iii) to refund to the Mortgagor any funds as may be
         determined to be overages;

                  (iv) for transfer to the Collection Account in accordance with
         the terms of this Agreement;

                  (v) for application to restoration or repair of the Mortgaged
         Property;

                  (vi) to pay to the Master Servicer, or to the Mortgagor to the
         extent required by the related Mortgage Loan or Applicable Regulations,
         any interest paid on the funds deposited in the Escrow Account;

                  (vii) to clear and terminate the Escrow Account on the
         termination of this Agreement; and

                  (viii) to transfer to the Collection Account any Insurance
         Proceeds.

                  In the event the Master Servicer shall deposit in an Escrow
Account any amount not required to be deposited therein, it may at any time
withdraw such amount from such Escrow Account, any provision herein to the
contrary notwithstanding. As part of its servicing duties, the Master Servicer
shall pay to the Mortgagor interest on funds in the Escrow Account, to the
extent required by the related Mortgage Loan or Applicable Regulations, and to
the extent that interest earned on funds in the Escrow Account is insufficient,
shall pay such interest from its own funds, without any reimbursement therefor.
The Master Servicer may pay to itself any excess interest on funds in the Escrow
Account, to the extent such action is in conformity with the Servicing Standard,
is permitted by law and such amounts are not required to be paid to Mortgagors
or used for any of the other purposes set forth above.

                  (c)      DISTRIBUTION ACCOUNT.  The Trustee shall, from time
to time, make withdrawals from the Distribution Account, for any of the
following purposes:

                  (i) to make distributions to Certificateholders in accordance
         with Section 4.01;

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<PAGE>

                  (ii) to pay to itself and the Trustee amounts to which it is
         entitled pursuant to Section 8.05;

                  (iii) to pay itself any interest income earned on funds
         deposited in the Distribution Account pursuant to Section 3.06;

                  (iv) to reimburse itself pursuant to Section 7.01 and Section
         7.02(b);

                  (v) to pay any amounts in respect of taxes pursuant to Section
         10.01(g)(iii); and

                  (vi) to clear and terminate the Distribution Account pursuant
         to Section 9.01.

                  SECTION 3.06. Investment of Funds in the Collection Account,
                                the Escrow Account, the REO Account and the
                                Distribution Account.

                  (a) The Master Servicer may direct any depository institution
maintaining the Collection Account, the Escrow Account (subject to Section
3.05(b)), and the REO Account and the Trustee may direct any depository
institution maintaining the Distribution Account, (for purposes of this Section
3.06, each an "Investment Account"), to invest the funds in such Investment
Account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Trustee is the obligor thereon, and (ii) no later than the date on which
such funds are required to be withdrawn from such Investment Account pursuant to
this Agreement, if the Trustee is the obligor thereon. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds in an Investment Account shall be made in the name of the Trustee (in
its capacity as such) or in the name of a nominee of the Trustee. The Trustee
shall be entitled to sole possession (except with respect to investment
direction of funds held in the Collection Account, the Escrow Account, and the
REO Account) over each such investment and (except with respect to the income on
funds held in the Collection Account, the Escrow Account and the REO Account)
the income thereon, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the Trustee or its agent, together
with any document of transfer necessary to transfer title to such investment to
the Trustee or its nominee. In the event amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the Trustee shall:

                  (i) consistent with any notice required to be given
         thereunder, demand that payment thereon be made on the last day such
         Permitted Investment may otherwise mature hereunder in an amount equal
         to the lesser of (1) all amounts then payable thereunder and (2) the
         amount required to be withdrawn on such date; and

                  (ii) demand payment of all amounts due thereunder promptly
         upon determination by a Responsible Officer of the Trustee that such
         Permitted Investment would not constitute a Permitted Investment in
         respect of funds thereafter on deposit in the Investment Account.

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<PAGE>

                  (b) All income in the nature of interest from the investment
of funds in the Collection Account, the Escrow Account (subject to Section
3.05(b)) and the REO Account shall be for the benefit of the Master Servicer as
compensation for the Master Servicer's services pursuant to this Agreement. The
Master Servicer shall deposit in the Collection Account, the Escrow Account, and
the REO Account from its own funds the amount of any loss incurred in respect of
any such Permitted Investment made with funds in such account immediately upon
realization of such loss.

                  (c) All income in the nature of interest or earnings from the
investment of funds in the Distribution Account shall be for the benefit of the
Trustee as compensation for the Trustee's services pursuant to this Agreement.
The Trustee shall deposit in the Distribution Account from its own funds the
amount of any loss incurred on Permitted Investments in the Distribution
Account.

                  (d) Funds on deposit in the Net WAC Rate Carryover Reserve
Account may be invested in Permitted Investments in accordance with this Section
3.06 and Section 4.10 (with respect to the Net WAC Rate Carryover Reserve
Account) and any investment earnings or interest paid shall accrue to the
benefit of the party designated in such section and the party so designated
shall deposit in the related account from its own funds the amount of any loss
incurred on Permitted Investments in such account.

                  (e) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the NIMS Insurer or the Holders of Certificates
representing more than 50% of the Voting Rights allocated to any Class of
Certificates, shall take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
proceedings.

                  (f) The Trustee or its Affiliates are permitted to receive
compensation that could be deemed to be in the Trustee's economic self-interest
for (i) serving as investment adviser, administrator, shareholder, servicing
agent, custodian or sub-custodian with respect to certain of the Permitted
Investments, (ii) using Affiliates to effect transactions in certain Permitted
Investments and (iii) effecting transactions in certain Permitted Investments.
Such compensation shall not be considered an amount that is reimbursable or
payable pursuant to Section 3.05.

                  SECTION 3.07. Payment of Taxes, Insurance and Other Charges.

                  With respect to each Mortgage Loan, the Master Servicer shall
maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates and other charges which are or may become a lien upon
the Mortgaged Property and the status of fire and hazard insurance coverage and,
as to those Mortgage Loans subject to a voluntary escrow agreement, shall
obtain, from time to time, all bills for the payment of such charges (including
renewal premiums) and shall effect payment thereof prior to the applicable
penalty or termination date and at a time appropriate for securing maximum
discounts allowable, employing for such purpose deposits of the Mortgagor in the
Escrow Account which shall have been estimated and accumulated by the Master
Servicer in amounts sufficient for such purposes, as allowed under the terms of
the Mortgage or Applicable

                                      -77-

<PAGE>

Regulations. The Master Servicer assumes full responsibility for the timely
payment of all such bills and shall effect timely payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make Servicing Advances from its own
funds to effect such payments. To the extent that the Mortgage does not provide
for Escrow Payments, the Master Servicer shall use reasonable efforts consistent
with the Servicing Standard to determine that any such payments are made by the
Mortgagor and shall ensure that the Mortgaged Property is not lost to a tax lien
as a result of nonpayment and that such Mortgaged Property is not left
uninsured.

                  SECTION 3.08. Maintenance of Hazard Insurance.

                  The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
Stated Principal Balance of such Mortgage Loan, (ii) the amount necessary to
fully compensate for any damage or loss to the improvements that are a part of
such property on a replacement cost basis and (iii) the maximum insurable value
of the improvements which are a part of such Mortgaged Property, in each case in
an amount not less than such amount as is necessary to avoid the application of
any coinsurance clause contained in the related hazard insurance policy. The
Master Servicer shall also cause to be maintained fire insurance with extended
coverage on each REO Property in an amount which is at least equal to the lesser
of (i) the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding Stated Principal Balance of the related
Mortgage Loan, plus accrued interest at the Mortgage Rate and related Servicing
Advances (each measured at the time it became an REO Property). The Master
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under any such hazard policies. Any
amounts to be collected by the Master Servicer under any such policies (other
than amounts to be applied to the restoration or repair of the property subject
to the related Mortgage or amounts to be released to the Mortgagor in accordance
with the procedures that the Master Servicer would follow in servicing loans
held for its own account, subject to the terms and conditions of the related
Mortgage and Mortgage Note) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 3.05, if received in respect of a
Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to Section
3.13, if received in respect of an REO Property. Any cost incurred by the Master
Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid Stated
Principal Balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards, the
Master Servicer will cause to be maintained a flood insurance policy in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the unpaid Stated Principal Balance of the related Mortgage Loan; (ii) the
maximum amount of such insurance available for the related Mortgaged Property
under the national flood insurance program (assuming that the area in which such
Mortgaged Property is located is participating in such program) and (iii) the
maximum insurable value of the improvements which are part of the related
Mortgaged Property.

                                      -78-

<PAGE>

                  SECTION 3.09. Maintenance of Mortgage Blanket Insurance.

                  In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of A:V
or better in Best's Key Rating Guide (or such other rating that is comparable to
such rating, or if Litton Loan Servicing LP is the successor Master Servicer, a
General Policy Rating of B-VI or better) insuring against hazard losses on all
of the Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first two sentences of Section 3.08, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Master Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property or REO Property a policy complying
with the first two sentences of Section 3.08, and there shall have been one or
more losses which would have been covered by such policy, deposit to the
Collection Account from its own funds the amount not otherwise payable under the
blanket policy because of such deductible clause. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Master
Servicer agrees to prepare and present, on behalf of itself, the Trustee and
Certificateholders, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy.

                  SECTION 3.10. Fidelity Bond; Errors and Omissions Insurance.

                  The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Fannie Mae or Freddie Mac, unless the Master Servicer has obtained a waiver
of such requirements from Fannie Mae or Freddie Mac. The Master Servicer shall
provide the Trustee and the NIMS Insurer (upon reasonable request) with copies
of any such insurance policies and fidelity bond. The Master Servicer shall be
deemed to have complied with this provision if an Affiliate of the Master
Servicer has such errors and omissions and fidelity bond coverage and, by the
terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Master Servicer. Any such errors and omissions policy
and fidelity bond shall by its terms not be cancelable without thirty days'
prior written notice to the Trustee. The Master Servicer shall also cause each
Sub-Servicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.

                  SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
                                Agreements.

                  The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Master Servicer shall not exercise any such rights if
prohibited by law from doing so. If the Master Servicer reasonably believes it
is unable under applicable law to enforce such "due-on-sale"

                                      -79-

<PAGE>

clause, or if any of the other conditions set forth in the proviso to the
preceding sentence apply, the Master Servicer is authorized to enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Master Servicer
is also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided that no such substitution shall be effective unless such
person satisfies the underwriting criteria of the Master Servicer. In connection
with any assumption or substitution, the Master Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Master Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Master Servicer in respect of an assumption or
substitution of liability agreement will be retained by the Master Servicer as
additional servicing compensation. In connection with any such assumption, no
material term of the Mortgage Note (including but not limited to the related
Mortgage Rate and the amount of the Monthly Payment) may be amended or modified,
except as otherwise required pursuant to the terms thereof or otherwise
permitted under Section 3.01. The Master Servicer shall notify the Trustee and
any respective Custodian that any such substitution or assumption agreement has
been completed by forwarding to the Trustee or to such Custodian, as the case
may be, the executed original of such substitution or assumption agreement,
which document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof.

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.11,
the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.

                  SECTION 3.12. Realization Upon Defaulted Mortgage Loans.

                  (a) The Master Servicer shall, consistent with the Servicing
Standard and the Loss Mitigation Action Plan, foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.02. The Master Servicer shall be responsible for all costs and
expenses incurred by it in any such proceedings; provided, however, that such
costs and expenses will be recoverable as Servicing Advances by the Master
Servicer as contemplated in Section 3.05 and Section 3.13. The foregoing is
subject to the provision that, in any case in which Mortgaged Property shall
have suffered damage from an Uninsured Cause, the Master Servicer shall not be
required to expend its own funds toward

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the restoration of such property unless it shall determine in its discretion
that such restoration will increase the proceeds of liquidation of the related
Mortgage Loan after reimbursement to itself for such expenses.

                  (b) Notwithstanding the foregoing provisions of this Section
3.12 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Fund or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Master Servicer has
also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:

                  (1) such Mortgaged Property is in compliance with applicable
         environmental laws or, if not, that it would be in the best economic
         interest of the Trust Fund to take such actions as are necessary to
         bring the Mortgaged Property into compliance therewith; and

                  (2) there are no circumstances present at such Mortgaged
         Property relating to the use, management or disposal of any hazardous
         substances, hazardous materials, hazardous wastes, or petroleum-based
         materials for which investigation, testing, monitoring, containment,
         clean-up or remediation could be required under any federal, state or
         local law or regulation, or that if any such materials are present for
         which such action could be required, that it would be in the best
         economic interest of the Trust Fund to take such actions with respect
         to the affected Mortgaged Property.

                  Notwithstanding the foregoing, if such environmental audit
reveals, or if the Master Servicer has actual knowledge or notice, that such
Mortgaged Property contains such toxic or hazardous wastes or substances, the
Master Servicer shall not foreclose or accept a deed in lieu of foreclosure
without the prior written consent of the NIMS Insurer.

                  The cost of the environmental audit report contemplated by
this Section 3.12 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05(a)(v), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

                  If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master

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Servicer shall take such action as it deems to be in the best economic interest
of the Trust Fund. The cost of any such compliance, containment, cleanup or
remediation shall be advanced by the Master Servicer, subject to the Master
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05(a)(v), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

                  (c) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: FIRST, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and Advances, pursuant to Section 3.05(a)(ii); SECOND, to accrued and
unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Distribution Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and THIRD, as a recovery of principal of the Mortgage Loan. If
the amount of the recovery so allocated to interest is less than the full amount
of accrued and unpaid interest due on such Mortgage Loan, the amount of such
recovery will be allocated by the Master Servicer as follows: FIRST, to unpaid
Servicing Fees; and SECOND, to the balance of the interest then due and owing.
The portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.05(a)(ii).

                  SECTION 3.13. Title, Management and Disposition of REO
                                Property.

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. Pursuant to the power of attorney granted in Section
3.01, the Master Servicer is hereby authorized to transfer the title of any REO
Property taken in the name of the Trustee to a third party purchaser pursuant to
this Section 3.13 without further documentation of its authority as
attorney-in-fact for the Trustee on behalf of the Trust. The Master Servicer, on
behalf of the Trust Fund (and on behalf of the Trustee for the benefit of the
Certificateholders), shall either sell any REO Property before the close of the
third taxable year after the year the Trust Fund acquires ownership of such REO
Property for purposes of Section 860G(a)(8) of the Code or request from the
Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire, an extension of the three-year
grace period, unless the Master Servicer shall have delivered to the Trustee,
the NIMS Insurer and the Depositor an Opinion of Counsel, addressed to the
Trustee, the NIMS Insurer and the Depositor, to the effect that the holding by
the Trust Fund of such REO Property subsequent to three years after its
acquisition will not result in the imposition on any Trust REMIC of taxes on
"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause any Trust REMIC to fail to qualify as a REMIC under Federal law at any
time that any Certificates are outstanding. The Master Servicer shall manage,
conserve, protect and operate each REO Property for the benefit of the
Certificateholders and solely for the purpose of its prompt disposition and sale
in a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.

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<PAGE>

                  (b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain with respect to REO Properties an account held in trust for the Trustee
for the benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.

                  (c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement
(including the Loss Mitigation Action Plan), to do any and all things in
connection with any REO Property as are consistent with the manner in which the
Master Servicer manages and operates similar property owned by the Master
Servicer or any of its Affiliates, all on such terms and for such period as the
Master Servicer deems to be in the best interests of Certificateholders and
appropriate to effect the prompt disposition and sale of the REO Property. In
connection therewith, the Master Servicer shall deposit, or cause to be
deposited in the clearing account (which account must be an Eligible Account) in
which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than one Business Day after the Master Servicer's receipt thereof,
and shall thereafter deposit in the REO Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, all
revenues received by it with respect to an REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of such REO Property including, without limitation:

                  (i) all insurance premiums due and payable in respect of such
         REO Property;

                  (ii) all real estate taxes and assessments in respect of such
         REO Property that may result in the imposition of a lien thereon; and

                  (iii) all costs and expenses necessary to maintain such REO
         Property.

                  To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Master
Servicer shall advance from its own funds such amount as is necessary for such
purposes if, but only if, the Master Servicer would make such advances if the
Master Servicer owned the REO Property and if in the Master Servicer's judgment,
the payment of such amounts will be recoverable from the rental or sale of the
REO Property.

                  Notwithstanding the Master Servicer's obligation to the
Certificateholders to manage and operate (including the collection of rents from
existing tenants and management of any leases acquired with the REO property to
the extent applicable) the REO Property from the date of acquisition until the
date of sale, neither the Master Servicer nor the Trustee shall knowingly:

                  (i) authorize the Trust Fund to enter into, renew or extend
         any New Lease with respect to any REO Property, if the New Lease by its
         terms will give rise to any income that does not constitute Rents from
         Real Property;

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<PAGE>

                  (ii) authorize any amount to be received or accrued under any
         New Lease other than amounts that will constitute Rents from Real
         Property;

                  (iii) authorize any construction on any REO Property, other
         than the completion of a building or other improvement thereon, and
         then only if more than ten percent of the construction of such building
         or other improvement was completed before default on the related
         Mortgage Loan became imminent, all within the meaning of Section
         856(e)(4)(B) of the Code; or

                  (iv) authorize any Person to Directly Operate any REO Property
         on any date more than 90 days after its date of acquisition by the
         Trust Fund;

unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee and the NIMS Insurer, to the effect that such
action will not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code at any time that
it is held by the Trust Fund, and (B) the Master Servicer has received written
notice from the Trustee that it has received written consent from the NIMS
Insurer that the specific action may be taken.

                  The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:

                  (i) the terms and conditions of any such contract shall not be
         inconsistent herewith;

                  (ii) any such contract shall require, or shall be administered
         to require, that the Independent Contractor pay all costs and expenses
         incurred in connection with the operation and management of such REO
         Property, including those listed above and remit all related revenues
         (net of such costs and expenses) to the Master Servicer as soon as
         practicable, but in no event later than thirty days following the
         receipt thereof by such Independent Contractor;

                  (iii) none of the provisions of this Section 3.13(c) relating
         to any such contract or to actions taken through any such Independent
         Contractor shall be deemed to relieve the Master Servicer of any of its
         duties and obligations to the Trustee on behalf of the
         Certificateholders with respect to the operation and management of any
         such REO Property; and

                  (iv) the Master Servicer shall be obligated with respect
         thereto to the same extent as if it alone were performing all duties
         and obligations in connection with the operation and management of such
         REO Property.

                  The Master Servicer shall be entitled to enter into any
agreement with any Independent Contractor performing services for it related to
its duties and obligations hereunder for indemnification of the Master Servicer
by such Independent Contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification. The Master Servicer shall be

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solely liable for all fees owed by it to any such Independent Contractor,
irrespective of whether the Master Servicer's compensation pursuant to Section
3.18 is sufficient to pay such fees. The Master Servicer shall not engage an
Independent Contractor to engage in any activities that the Master Servicer
would not be permitted to engage in itself in accordance with the other
provisions of this Agreement (including the Loss Mitigation Action Plan).

                  (d) In addition to the withdrawals permitted under Section
3.13(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances made
in respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Distribution Account in accordance
with Section 3.04(g)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.13(c) or this Section 3.13(d).

                  (e) Subject to the time constraints set forth in Section
3.13(a), (including the constraint that the Master Servicer hold and manage each
REO Property "solely for the purpose of its prompt disposition") each REO
disposition shall be carried out by the Master Servicer at such price and upon
such terms and conditions as shall be in conformity with the requirements of the
Loss Mitigation Action Plan and as shall be normal and usual in its general
servicing activities for similar properties.

                  (f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.04(g)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).

                  SECTION 3.14. [Reserved].

                  SECTION 3.15. Reports of Foreclosure and Abandonment of
                                Mortgaged Properties.

                  The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.

                  SECTION 3.16. Optional Purchase of Defaulted Mortgage Loans.

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                  (a)(i) The NIMS Insurer may, at its option, purchase a
Mortgage Loan which has become 90 or more days delinquent or for which the
Master Servicer has accepted a deed in lieu of foreclosure. Prior to purchase
pursuant to this Section 3.16(a)(i), the Master Servicer shall be required to
continue to make Advances pursuant to Section 4.03. The NIMS Insurer shall not
use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders. The NIMS Insurer
shall purchase such delinquent Mortgage Loan at a price equal to the Purchase
Price of such Mortgage Loan. Any such purchase of a Mortgage Loan pursuant to
this Section 3.16(a)(i) shall be accomplished by remittance to the Master
Servicer for deposit in the Collection Account of the amount of the Purchase
Price. The Trustee shall effectuate the conveyance of such delinquent Mortgage
Loan to the NIMS Insurer to the extent necessary, as requested, and the Trustee
shall promptly deliver all documentation to the NIMS Insurer.

                  (ii) During the first full calender month (but excluding the
last Business Day thereof) following a Mortgage Loan or related REO Property
becoming 90 days or more delinquent, the Master Servicer shall have the option,
but not the obligation to purchase from the Trust Fund any such Mortgage Loan or
related REO Property that is then still 90 days or more delinquent, which the
Master Servicer determines in good faith will otherwise become subject to
foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee prior to purchase), at a price equal to the Purchase
Price. The Purchase Price for any Mortgage Loan or related REO Property
purchased hereunder shall be deposited in the Collection Account, and the
Trustee, upon written certification of such deposit, shall release or cause to
be released to the Master Servicer the related Mortgage File and the Trustee
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as the Master Servicer shall furnish and as shall be
necessary to vest in the Master Servicer title to any Mortgage Loan or related
REO Property released pursuant hereto.

                  (iii) Following the expiration of the Master's Servicer's
option to purchase from the Trust Fund any such Mortgage Loan or related REO
Property that is then still 90 days or more delinquent, the Special Sub-Servicer
shall have the option, but not the obligation to purchase from the Trust Fund
any such Mortgage Loan or related REO Property at a price equal to the Purchase
Price for a period of 30 days. The Purchase Price for any Mortgage Loan or
related REO Property purchased hereunder shall be deposited in the Collection
Account, and the Trustee, upon written certification of such deposit, shall
release or cause to be released to the Special Sub-Servicer the related Mortgage
File and the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as the Special Sub-Servicer shall
furnish and as shall be necessary to vest in the Special Sub-Servicer title to
any Mortgage Loan or related REO Property released pursuant hereto.

                  (b) If with respect to any delinquent Mortgage Loan or related
REO Property, the option of the Special Sub-Servicer set forth in the preceding
paragraph shall have arisen but the Special Sub-Servicer shall have failed to
exercise such option, then such option shall automatically expire; provided,
however, that if any such Mortgage Loan or related REO Property shall cease to
be 90 days or more delinquent but then subsequently shall again become 90 days
or more delinquent, then the Master Servicer and the Special Sub-Servicer shall
be entitled to another repurchase option with respect to such Mortgage Loan or
REO Property as provided in the preceding paragraphs.

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                  SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.

                  (a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer will
promptly notify the Trustee and any related Custodian by a certification in the
form of Exhibit E or such other form supplied by the Master Servicer provided
that it does not differ from the substantive content of Exhibit E, (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 3.04(b) have been or
will be so deposited) of a Servicing Officer and shall request delivery to it of
the Mortgage File. Upon receipt of such certification and request, the Trustee
or such Custodian, as the case may be, shall promptly release (and in no event
more than three (3) Business Days thereafter) the related Mortgage File to the
Master Servicer. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account or the Distribution Account.

                  (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee and any related
Custodian shall, upon request of the Master Servicer and delivery to the Trustee
or such Custodian, as the case may be, of a Request for Release in the form of
Exhibit E or such other form supplied by the Master Servicer provided that it
does not differ from the substantive content of Exhibit E, release the related
Mortgage File to the Master Servicer, and the Trustee shall, at the direction of
the Master Servicer, execute such documents as shall be necessary to the
prosecution of any such proceedings and the Master Servicer shall retain such
Mortgage File in trust for the benefit of the Certificateholders. Such Request
for Release shall obligate the Master Servicer to return each and every document
previously requested from the Mortgage File to the Trustee or to such Custodian
when the need therefor by the Master Servicer no longer exists, unless the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Collection Account or the Mortgage File
or such document has been delivered to an attorney, or to a public trustee or
other public official as required by law, for purposes of initiating or pursuing
legal action or other proceedings for the foreclosure of the Mortgaged Property
either judicially or non-judicially, and the Master Servicer has delivered to
the Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the Collection Account have been so deposited, or
that such Mortgage Loan has become an REO Property, upon request, a copy of the
Request for Release shall be released by the Trustee or such Custodian to the
Master Servicer.

                  (c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer any court pleadings,
requests for trustee's sale or other documents reasonably necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity. Each such certification shall

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include a request that such pleadings or documents be executed by the Trustee
and a statement as to the reason such documents or pleadings are required and
that the execution and delivery thereof by the Trustee will not invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.

                  (d) The Trustee and the Master Servicer may mutually agree on
policies and procedures (commercially reasonable in nature) to allow the
submission of any and all requests for the release of a Mortgage File
electronically with a digital signature or other identifier to designate the
Servicing Officer of the Master Servicer requesting such collateral.

                  SECTION 3.18. Servicing Compensation.

                  As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 4.03(e). In addition, the
Master Servicer shall be entitled to recover unpaid Servicing Fees out of
Insurance Proceeds or Liquidation Proceeds to the extent permitted by Section
3.05(a)(ii), out of general funds in the Collection Account to the extent
permitted by Section 3.05(a) and out of amounts derived from the operation and
sale of an REO Property to the extent permitted by Section 3.13. The right to
receive the Servicing Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Master Servicer's responsibilities
and obligations under this Agreement.

                  As compensation for its services, the Special Sub-Servicer
will be paid the Special Servicing Fee pursuant to Section 4.01(a)(4)(viii).

                  Additional servicing compensation in the form of assumption
fees, late payment charges, insufficient funds fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Master Servicer only to the extent such fees or charges are received by the
Master Servicer. The Master Servicer shall also be entitled pursuant to Section
3.05(a)(vi) to withdraw from the Collection Account, pursuant to Section 3.04(h)
to withdraw from any Escrow Account and pursuant to Section 3.13(b) to withdraw
from any REO Account, as additional servicing compensation, interest or other
income earned on deposits therein, subject to Section 3.06. The Master Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including premiums for the insurance required by
Section 3.08, Section 3.09 and Section 3.10, to the extent such premiums are not
paid by the related Mortgagors or by a Sub-Servicer, servicing compensation of
each Sub-Servicer, and to the extent provided in Section 8.05, the fees and
expenses of the Trustee) and shall not be entitled to reimbursement therefor
except as specifically provided herein.

                  SECTION 3.19. Statement as to Compliance.

                  The Master Servicer will deliver to the Trustee, the NIMS
Insurer, the Depositor and each Rating Agency on or before March 15th of each
calendar year commencing in 2004, an Officers' Certificate, substantially in the
form of Exhibit L, stating, as to each signatory thereof, that (i) a review of
the activities of the Master Servicer during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers'

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<PAGE>

knowledge, based on such review, the Master Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. Copies of any such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon the request and at the expense of the requesting party, provided that such
statement is delivered by the Master Servicer to the Trustee.

                  SECTION 3.20. Independent Public Accountants' Servicing
                                Report.

                  Not later than March 15th of each calendar year commencing in
2004, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed fiscal year and (ii) on the basis of an
examination conducted by such firm in accordance with standards established by
the American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub- Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Immediately upon receipt of such report,
the Master Servicer shall furnish a copy of such report to the Trustee, the NIMS
Insurer and each Rating Agency. Copies of such statement shall be provided by
the Trustee to any Certificateholder upon request at the Master Servicer's
expense, provided that such statement is delivered by the Master Servicer to the
Trustee. In the event such firm of independent certified public accountants
requires the Trustee to agree to the procedures performed by such firm, the
Master Servicer shall direct the Trustee in writing to so agree; it being
understood and agreed that the Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Master Servicer, and the Trustee
has not made any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.

                  SECTION 3.21. Access to Certain Documentation.

                  The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder or
Certificate Owner, access to the documentation regarding the Mortgage Loans
required by applicable laws and regulations. Such access shall be afforded
without charge, but only upon reasonable request and during normal business
hours at the offices of the Master Servicer designated by it. In addition,
access to the documentation regarding the Mortgage Loans will be provided to any
Certificateholder or Certificate Owner, the Trustee, the NIMS Insurer and to any
Person identified to the Master Servicer as a prospective transferee of a
Certificate, upon reasonable request during normal business hours at the offices
of the Master Servicer designated by

                                      -89-

<PAGE>

it at the expense of the Person requesting such access. In each case, access to
any documentation regarding the Mortgage Loans may be conditioned upon the
requesting party's acknowledgment in writing of a confidentiality agreement
regarding any information that is required to remain confidential under the
Gramm-Leach-Bliley Act of 1999.

                  SECTION 3.22. [Reserved].

                  SECTION 3.23. Advance Facility.

                  (a) The Master Servicer and/or the Trustee on behalf of the
Trust Fund, in either case, with the consent of the NIMS Insurer and the Master
Servicer in the case of the Trustee, is hereby authorized to enter into a
facility with any Person which provides that such Person (an "Advancing Person")
may fund Advances and/or Servicing Advances to the Trust Fund under this
Agreement, although no such facility shall reduce or otherwise affect the Master
Servicer's obligation to fund such Advances and/or Servicing Advances. If the
Master Servicer enters into such an Advance Facility pursuant to this Section
3.23, upon reasonable request of the Advancing Person, the Trustee shall execute
a letter of acknowledgment, confirming its receipt of notice of the existence of
such Advance Facility. To the extent that an Advancing Person funds any Advance
or any Servicing Advance and provides the Trustee with notice acknowledged by
the Master Servicer that such Advancing Person is entitled to reimbursement
directly from the Trustee pursuant to the terms of the Advance Facility, such
Advancing Person shall be entitled to receive reimbursement pursuant to this
Agreement for such amount to the extent provided in Section 3.23(b). Such notice
from the Advancing Person must specify the amount of the reimbursement, the
Section of this Agreement that permits the applicable Advance or Servicing
Advance to be reimbursed and the section(s) of the Advance Facility that entitle
the Advancing Person to request reimbursement from the Trustee, rather than the
Master Servicer, and include the Master Servicer's acknowledgment thereto or
proof of an Event of Default under the Advance Facility. The Trustee shall have
no duty or liability with respect to any calculation of any reimbursement to be
paid to an Advancing Person and shall be entitled to rely without independent
investigation on the Advancing Person's notice provided pursuant to this Section
3.23. An Advancing Person whose obligations hereunder are limited to the funding
of Advances and/or Servicing Advances shall not be required to meet the
qualifications of a Master Servicer or a Sub-Servicer pursuant to Section 6.06
hereof and will not be deemed to be a Sub- Servicer under this Agreement. If the
terms of a facility proposed to be entered into with an Advancing Person by the
Trust Fund would not materially and adversely affect the interests of any
Certificateholder, then the NIMS Insurer shall not withhold its consent to the
Trust Fund's entering such facility.

                  (b) If, pursuant to the terms of the Advance Facility, an
Advancing Person is entitled to reimbursement directly from the Trustee, then
the Master Servicer shall not reimburse itself therefor under Section
3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii)
prior to the remittance to the Trust Fund, but instead the Master Servicer shall
include such amounts in the applicable remittance to the Trustee made pursuant
to Section 3.04(g) to the extent of amounts on deposit in the Collection Account
on the related Master Servicer Remittance Date. The Trustee is hereby authorized
to pay to the Advancing Person reimbursements for Advances and Servicing
Advances from the Distribution Account, to the extent permitted under the terms
of the Advance Facility, to the same extent the Master Servicer would have been
permitted to reimburse itself for

                                      -90-

<PAGE>

such Advances and/or Servicing Advances in accordance with Section 3.05(a)(ii),
Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii), as the case
may be, had the Master Servicer itself funded such Advance or Servicing Advance.
The Trustee is hereby authorized to pay directly to the Advancing Person such
portion of the Servicing Fee as the parties to any advancing facility agree to
in writing delivered to the Trustee.

                  (c) All Advances and Servicing Advances made pursuant to the
terms of this Agreement shall be deemed made and shall be reimbursed on a "first
in first out" (FIFO) basis.

                  (d) In the event the Master Servicer is terminated pursuant to
Section 7.01, the Advancing Person shall succeed to the terminated Master
Servicer's right of reimbursement set forth in Section 7.02(c) to the extent of
such Advancing Person's financing of Advances or Servicing Advances hereunder
then remaining unreimbursed.

                  (e) Any amendment to this Section 3.23 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.23,
including amendments to add provisions relating to a successor master servicer,
may be entered into by the Trustee and the Master Servicer without the consent
of any Certificateholder but with the consent of the NIMS Insurer and written
confirmation from each Rating Agency that the amendment will not result in the
reduction or withdrawal of the then-current ratings of any outstanding Class of
Certificates or any other notes secured by collateral which includes all or a
portion of the Class CE Certificates, the Class P Certificates and/or the
Residual Certificates, notwithstanding anything to the contrary in this
Agreement.

                                      -91-

<PAGE>

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 4.01. Distributions.

                  (a)(1) On each Distribution Date, the following amounts, in
the following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R Certificates (in respect
of the Class R-I Interest), as the case may be:

                  (i) first, (a) to Holders of REMIC I Regular Interest I-LTAA,
REMIC Regular Interest I-LTA, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2, REMIC Regular Interest I-LTM3, REMIC Regular Interest I-LTM4,
Regular Interest I-LTM5, REMIC I Regular Interest I-LTZZ and REMIC I Regular
Interest I-LTP, PRO RATA, in an amount equal to (A) the Uncertificated Interest
for such Distribution Date, plus (B) any amounts in respect thereof remaining
unpaid from previous Distribution Dates. Amounts payable as Uncertificated
Interest in respect of REMIC I Regular Interest I-LTZZ shall be reduced and
deferred when the REMIC I Overcollateralization Amount is less than the REMIC I
Overcollateralization Target Amount, by the lesser of (x) the amount of such
difference and (y) the Maximum I-LTZZ Uncertificated Interest Deferral Amount
and such amount will be payable to the Holders of REMIC I Regular Interest I-
LTA, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I
Regular Interest I-LTM3, REMIC Regular Interest I-LTM4 and Regular Interest
I-LTM5 in the same proportion as the Overcollateralization Increase Amount is
allocated to the Corresponding Certificates; and

                  (ii) second, to the Holders of REMIC I Regular Interests, in
an amount equal to the remainder of the REMIC I Marker Allocation Percentage of
Available Funds for such Distribution Date after the distributions made pursuant
to clause (i) above, allocated as follows:

                  (a) to the Holders of REMIC I Regular Interest I-LTAA and
REMIC I Regular Interest I-LTP, 98.00% of such remainder (other than amounts
payable under clause (d) below), until the Uncertificated Balance of such REMIC
I Regular Interest is reduced to zero, provided, however, that REMIC I Regular
Interest I-LTP shall not be reduced until the Distribution Date immediately
following the expiration of the latest Prepayment Charge as identified on the
Prepayment Charge Schedule or any Distribution Date thereafter, at which point
such amount shall be distributed to REMIC I Regular Interest I-LTP, until $100
has been distributed pursuant to this clause;

                  (b) to the Holders of REMIC I Regular Interest I-LTA, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC Regular Interest I-LTM4 and Regular Interest I-LTM5,
1.00% of such remainder (other than amounts payable under clause (d) below), in
the same proportion as principal payments are allocated to the Corresponding
Certificates, until the Uncertificated Balances of such REMIC I Regular
Interests are reduced to zero;

                                                       -92-

<PAGE>

                  (c) to the Holders of REMIC I Regular Interest I-LTZZ, 1.00%
of such remainder (other than amounts payable under clause (d) below), until the
Uncertificated Balance of such REMIC I Regular Interest is reduced to zero; then

                  (d) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-I Interest);

provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Reduction Amount shall be allocated
to Holders of (i) REMIC I Regular Interest I-LTAA and REMIC I Regular Interest
I-LTP, in that order and (ii) REMIC I Regular Interest I-LTP, respectively;
provided that REMIC I Regular Interest I-LTP shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC I Regular
Interest I-LTP, until $100 has been distributed pursuant to this clause.

                  On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC I to the Holders of REMIC I Regular Interest
I-LTP. The payment of the foregoing amounts to the Holders of REMIC I Regular
Interest I-LTP shall not reduce the Uncertificated Balance thereof.

                  (2) On each Distribution Date, the Trustee shall withdraw from
the Distribution Account an amount equal to the Interest Remittance Amount and
distribute to the Certificateholders the following amounts, in the following
order of priority:

                  (i) to the Holders of the Class A Certificates, an amount
         equal to the Senior Interest Distribution Amount;

                  (ii) to the Holders of the Class M-1 Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class M-1
         Certificates;

                  (iii) to the Holders of the Class M-2 Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class M-2
         Certificates;

                  (iv) to the Holders of the Class M-3 Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class M-3
         Certificates;

                  (iv) to the Holders of the Class M-4 Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class M-4
         Certificates; and

                  (v) to the Holders of the Class M-5 Certificates, an amount
         equal to the Interest Distribution Amount allocable to the Class M-5
         Certificates.

                  (3)(I) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, the Trustee shall withdraw
from the Distribution Account an amount equal

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<PAGE>

to the Principal Distribution Amount and distribute to the Certificateholders
the following amounts, in the following order of priority:

                  (i) to the holders of the Class A Certificates, until the
         Certificate Principal Balance thereof has been reduced to zero;

                  (ii) to the holders of the Class M-1 Certificates, until the
         Certificate Principal Balance thereof has been reduced to zero;

                  (iii) to the holders of the Class M-2 Certificates, until the
         Certificate Principal Balance thereof has been reduced to zero;

                  (iv) to the holders of the Class M-3 Certificates, until the
         Certificate Principal Balance thereof has been reduced to zero;

                  (v) to the holders of the Class M-4 Certificates, until the
         Certificate Principal Balance thereof has been reduced to zero; and

                  (vi) to the holders of the Class M-5 Certificates, until the
         Certificate Principal Balance thereof has been reduced to zero.

                  (II) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, the Trustee shall
withdraw from the Distribution Account an amount equal to the Principal
Distribution Amount and distribute to the Certificateholders the following
amounts, in the following order of priority:

                  (i) to the holders of the Class A Certificates, the Class A
         Principal Distribution Amount, until the Certificate Principal Balance
         thereof has been reduced to zero;

                  (ii) to the holders of the Class M-1 Certificates, the Class
         M-1 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (iii) to the holders of the Class M-2 Certificates, the Class
         M-2 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (iv) to the holders of the Class M-3 Certificates, the Class
         M-3 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (v) to the holders of the Class M-4 Certificates, the Class
         M-4 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero;

                                      -94-

<PAGE>

                  (vi) to the holders of the Class M-5 Certificates, the Class
         M-5 Principal Distribution Amount, until the Certificate Principal
         Balance thereof has been reduced to zero.

                  (4) On each Distribution Date, the Net Monthly Excess Cashflow
shall be distributed as follows:

                  (i) to the Holders of the Class or Classes of Certificates
         then entitled to receive distributions in respect of principal, in an
         amount equal to the Overcollateralization Increase Amount, applied to
         reduce the Certificate Principal Balance of such Certificates until the
         aggregate Certificate Principal Balance of such Certificates is reduced
         to zero;

                  (ii) to the Holders of the Class M-1 Certificates, in an
         amount equal to the Interest Carry Forward Amount allocable to such
         Class of Certificates;

                  (iii) to the Holders of the Class M-2 Certificates, in an
         amount equal to the Interest Carry Forward Amount allocable to such
         Class of Certificates;

                  (iv) to the Holders of the Class M-3 Certificates, in an
         amount equal to the Interest Carry Forward Amount allocable to such
         Class of Certificates;

                  (v) to the Holders of the Class M-4 Certificates, in an amount
         equal to the Interest Carry Forward Amount allocable to such Class of
         Certificates;

                  (vi) to the Holders of the Class M-5 Certificates, in an
         amount equal to the Interest Carry Forward Amount allocable to such
         Class of Certificates;

                  (vii) to the Net WAC Rate Carryover Reserve Account, the
         amount required by Section 4.10(b), after taking into account amounts
         received under the Cap Contract;

                  (viii) to the Special Sub-Servicer, the Special Servicing Fee;
         provided, however, if the Special Sub-Servicer is not Litton Loan
         Servicing LP, the Special Servicing Fee will be payable to the
         successor special sub-servicer by the Master Servicer prior to the
         distribution of Available Funds pursuant to Section 3.05(a)(xii);

                  (ix) to the Holders of the Class CE Certificates the Interest
         Distribution Amount, any remaining Overcollateralization Reduction
         Amount for such Distribution Date; and

                  (x) to the Holders of the Residual Certificates, any remaining
         amounts; provided that if such Distribution Date is the Distribution
         Date immediately following the expiration of the latest Prepayment
         Charge term as identified on the Mortgage Loan Schedule or any
         Distribution Date thereafter, then any such remaining amounts will be
         distributed first, to the Holders of the Class P Certificates, until
         the Certificate Principal Balance thereof has been reduced to zero; and
         second, to the Holders of the Residual Certificates.

                  (b) On each Distribution Date, after making the distributions
of the Available Funds as set forth above, the Trustee will FIRST, withdraw from
the Net WAC Rate Carryover Reserve

                                      -95-

<PAGE>

Account all income from the investment of funds in the Net WAC Rate Carryover
Reserve Account and distribute such amount to the Holders of the Class CE
Certificates, and SECOND, withdraw from the Net WAC Rate Carryover Reserve
Account, to the extent of amounts remaining on deposit therein, the amount of
any Net WAC Rate Carryover Amount for such Distribution Date and distribute such
amount as follows:

                  FIRST, to the Class A Certificates, to the extent of the Net
WAC Carryover Amount allocable to such Class, first, from payments made under
the Cap Contract and second, from amounts on deposit in the Net WAC Rate
Carryover Reserve Account;

                  SECOND, to the Class M-1 Certificates, to the extent of the
Net WAC Carryover Amount allocable to such Class;

                  THIRD, to the Class M-2 Certificates, to the extent of the Net
WAC Carryover Amount allocable to such Class,

                  FOURTH, to the Class M-3 Certificates, to the extent of the
Net WAC Carryover Amount allocable to such Class;

                  FIFTH, to the Class M-4 Certificates, to the extent the Net
WAC Carryover Amount is allocable to such Class; and

                  SIXTH, to the Class M-5 Certificates, to the extent the Net
WAC Carryover Amount is allocable to such Class.

                  On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Charges collected by the Master Servicer, Prepayment Charges payable by the
Master Servicer pursuant to Section 2.03(b)(ii)(A) and Master Servicer
Prepayment Charge Payment Amounts payable by the Master servicer pursuant to
Section 2.03(b)(ii)(B), subject to Section 2.03(b)(iii), in each case to the
extent not related to Principal Prepayments occurring after the related
Prepayment Period, and the Trustee shall distribute such amounts to the Holders
of the Class P Certificates. Such distributions shall not be applied to reduce
the Certificate Principal Balance of the Class P Certificates.

                  (c) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based on their respective Percentage
Interests. Payments in respect of each Class of Certificates on each
Distribution Date will be made to the Holders of the respective Class of record
on the related Record Date (except as otherwise provided in Section 4.01(e) or
Section 9.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date, or otherwise by check mailed by first class mail to the
address of such Holder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate

                                      -96-

<PAGE>

at the office of the Trustee maintained for such purpose pursuant to Section
8.12 or such other location specified in the notice to Certificateholders of
such final distribution.

                  Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.

                  (d) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. Neither the Holders of any Class of Certificates nor the Trustee nor
the Master Servicer shall in any way be responsible or liable to the Holders of
any other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.

                  (e) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trustee shall, no
later than five (5) days after the related Determination Date, mail to each
Holder on such date of such Class of Certificates a notice to the effect that:

                (i) the Trustee expects that the final distribution with respect
         to such Class of Certificates will be made on such Distribution Date,
         but only upon presentation and surrender of such Certificates at the
         office of the Trustee therein specified or its agent, and

               (ii)        no interest shall accrue on such Certificates from
         and after the end of the related Interest Accrual Period.

                  Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust by the Trustee and credited to the account of the
appropriate non-tendering Holder or Holders. If any Certificates as to which
notice has been given pursuant to this Section 4.01(e) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trustee shall mail a second notice to the remaining non- tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee shall, directly or through an agent, mail a final
notice to remaining non-tendering Certificateholders concerning surrender of
their Certificates but shall continue to hold any remaining funds for the
benefit of non-tendering Certificateholders. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in such trust fund. If within one year after
the final notice any such Certificates shall not have been surrendered for
cancellation, the Trustee shall pay to Countrywide Securities Corporation all
such amounts, and all rights of non-tendering

                                      -97-

<PAGE>

Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Trustee as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section
4.01(e).

                  (f) Notwithstanding anything to the contrary herein, (i) in no
event shall the Certificate Principal Balance of a Mezzanine Certificate be
reduced more than once in respect of any particular amount both (a) allocated to
such Certificate in respect of Realized Losses pursuant to Section 4.04 and (b)
distributed to the Holder of such Certificate in reduction of the Certificate
Principal Balance thereof pursuant to this Section 4.01 from Net Monthly Excess
Cashflow and (ii) in no event shall the Uncertificated Balance of a REMIC I
Regular Interest to be reduced more than once in respect of any particular
amount both (a) allocated to such REMIC I Regular Interest in respect of
Realized Losses pursuant to Section 4.04 and (b) distributed on such REMIC I
Regular Interest in reduction of the Uncertificated Balance thereof pursuant to
this Section 4.01.

                  SECTION 4.02. Statements to Certificateholders.

                  On each Distribution Date, the Trustee shall prepare and make
available to each Holder of the Regular Certificates and the NIMS Insurer, a
statement as to the distributions made on such Distribution Date setting forth:

                  (i) the amount of the distribution made on such Distribution
         Date to the Holders of the Certificates of each Class allocable to
         principal, and the amount of distribution made on such Distribution
         Date to the Holders of the Class P Certificates allocable to Prepayment
         Charges or Master Servicer Prepayment Charge Payment Amounts;

                  (ii) the amount of the distribution made on such Distribution
         Date to the Holders of the Certificates of each Class allocable to
         interest;

                  (iii) the aggregate Servicing Fee received by the Master
         Servicer during the related Due Period and such other customary
         information as the Trustee deems necessary or desirable, or which a
         Certificateholder reasonably requests, to enable Certificateholders to
         prepare their tax returns;

                  (iv) the aggregate amount of Advances for such Distribution
         Date;

                  (v) the aggregate Stated Principal Balance of the Mortgage
         Loans and any REO Properties as of the close of business on such
         Distribution Date;

                  (vi) the number, aggregate Principal Balance, weighted average
         remaining term to maturity and weighted average Mortgage Rate of the
         Mortgage Loans as of the related Due Date;

                  (vii) the number and aggregate unpaid Stated Principal Balance
         of Mortgage Loans (a) delinquent 30-59 days, (b) delinquent 60-89 days,
         (c) delinquent 90 or more days in each case, as of the last day of the
         preceding calendar month, (d) as to which foreclosure

                                      -98-

<PAGE>

         proceedings have been commenced and (e) with respect to which the
         related Mortgagor has filed for protection under applicable bankruptcy
         laws, with respect to whom bankruptcy proceedings are pending or with
         respect to whom bankruptcy protection is in force;

                  (viii) with respect to any Mortgage Loan that became an REO
         Property during the preceding calendar month, the loan number of such
         Mortgage Loan, the unpaid Stated Principal Balance and the Stated
         Principal Balance of such Mortgage Loan as of the date it became an REO
         Property;

                  (ix) the book value and the Stated Principal Balance of any
         REO Property as of the close of business on the last Business Day of
         the calendar month preceding the Distribution Date;

                  (x) the aggregate amount of Principal Prepayments made during
         the related Prepayment Period;

                  (xi) the aggregate amount of Realized Losses incurred during
         the related Prepayment Period (or, in the case of Bankruptcy Losses
         allocable to interest, during the related Due Period), separately
         identifying whether such Realized Losses constituted Bankruptcy Losses
         and the aggregate amount of Realized Losses incurred since the Closing
         Date;

                  (xii) the aggregate amount of Extraordinary Trust Fund
         Expenses withdrawn from the Collection Account or the Distribution
         Account for such Distribution Date;

                  (xiii) the aggregate Certificate Principal Balance of the each
         Class of Certificates, after giving effect to the distributions, and
         allocations of Realized Losses, made on such Distribution Date,
         separately identifying any reduction thereof due to allocations of
         Realized Losses;

                  (xiv) the Certificate Factor for each such Class of
         Certificates applicable to such Distribution Date;

                  (xv) the Interest Distribution Amount in respect of the Class
         A Certificates, the Mezzanine Certificates and the Class CE
         Certificates for such Distribution Date and the Interest Carry Forward
         Amount, if any, with respect to the Class A Certificates and the
         Mezzanine Certificates on such Distribution Date, and in the case of
         the Class A Certificates, the Mezzanine Certificates and the Class CE
         Certificates, separately identifying any reduction thereof due to
         allocations of Realized Losses, Prepayment Interest Shortfalls and
         Relief Act Interest Shortfalls;

                  (xvi) the aggregate amount of any Prepayment Interest
         Shortfall for such Distribution Date, to the extent not covered by
         payments by the Master Servicer pursuant to Section 4.03(e) or
         allocated to the Class CE Certificates;

                                      -99-

<PAGE>

                  (xvii) the aggregate amount of Relief Act Interest Shortfalls
         for such Distribution Date;

                  (xviii) the Overcollateralization Target Amount and the Credit
         Enhancement Percentage for such Distribution Date;

                  (xix) the Overcollateralization Increase Amount, if any, for
         such Distribution Date;

                  (xx) the Overcollateralization Reduction Amount, if any, for
         such Distribution Date;

                  (xxi) with respect to any Mortgage Loan as to which
         foreclosure proceedings have been concluded, the loan number and unpaid
         Stated Principal Balance of such Mortgage Loan as of the date of such
         conclusion of foreclosure proceedings;

                  (xxii) with respect to Mortgage Loans as to which a Final
         Liquidation has occurred, the number of Mortgage Loans, the unpaid
         Stated Principal Balance of such Mortgage Loans as of the date of such
         Final Liquidation and the amount of proceeds (including Liquidation
         Proceeds and Insurance Proceeds) collected in respect of such Mortgage
         Loans;

                  (xxiii) the respective Pass-Through Rates applicable to the
         Class A Certificates, the Mezzanine Certificates and the Class CE
         Certificates for such Distribution Date and the Pass-Through Rate
         applicable to the Class A Certificates and the Mezzanine Certificates
         for the immediately succeeding Distribution Date;

                  (xxiv) the amount on deposit in the Net WAC Rate Carryover
         Reserve Account as of the Determination Date;

                  (xxv) [reserved]; and

                  (xxvi) the Net WAC Rate Carryover Amount for the Class A
         Certificates and the Mezzanine Certificates, if any, for such
         Distribution Date and the amount remaining unpaid after reimbursements
         therefor on such Distribution Date and any amounts received under the
         Cap Contract.

                  The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the NIMS Insurer, the Master
Servicer and the Rating Agencies via the Trustee's internet website. The
Trustee's internet website shall initially be located at
https:\\www.corporatetrust.db.com and assistance in using the website can be
obtained by calling the Trustee's customer service desk at 1- 800-735-7777.
Parties that are unable to use the above distribution options are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Trustee shall have the right to change the
way 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.

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<PAGE>

                  In the case of information furnished pursuant to subclauses
(i) through (iii) above, the amounts shall be expressed as a dollar amount per
Single Certificate of the relevant Class.

                  Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to the NIMS Insurer and each Person who
at any time during the calendar year was a Holder of a Regular Certificate a
statement containing the information set forth in subclauses (i) through (iii)
above, aggregated for such calendar year or applicable portion thereof during
which such person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time are in force.

                  Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to the NIMS Insurer and each Person who
at any time during the calendar year was a Holder of a Residual Certificate a
statement setting forth the amount, if any, actually distributed with respect to
the Residual Certificates, as appropriate, aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be prepared by the
Trustee and furnished to such Holders pursuant to the rules and regulations of
the Code as are in force from time to time.

                  The Trustee shall, upon request, furnish to each
Certificateholder or Certificate Owner and the NIMS Insurer, during the term of
this Agreement, such periodic, special, or other reports or information, whether
or not provided for herein, as shall be reasonable with respect to the
Certificateholder or Certificate Owner, or otherwise with respect to the
purposes of this Agreement, all such reports or information to be provided at
the expense of the Certificateholder or Certificate Owner in accordance with
such reasonable and explicit instructions and directions as the
Certificateholder or Certificate Owner may provide. For purposes of this Section
4.02, the Trustee's duties are limited to the extent that the Trustee receives
timely reports as required from the Master Servicer.

                  On each Distribution Date the Trustee shall provide Bloomberg
Financial Markets, L.P. ("Bloomberg") CUSIP level factors for each class of
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Trustee and Bloomberg.

                  SECTION 4.03. Remittance Reports and Other Reports to the
                                Trustee; Advances; Payments in Respect of
                                Prepayment Interest Shortfalls.

                  (a) On the Master Servicer Reporting Date, the Master Servicer
shall deliver to the Trustee and the NIMS Insurer by telecopy (or by such other
means as the Master Servicer, the Trustee and the NIMS Insurer may agree from
time to time) a Remittance Report with respect to the related Distribution Date.
Such Remittance Report will include (i) the amount of Advances to be made by the
Master Servicer in respect of the related Distribution Date, the aggregate
amount of Advances outstanding after giving effect to such Advances, and the
aggregate amount of Nonrecoverable Advances in respect of such Distribution Date
and (ii) such other information with respect to the Mortgage Loans as the
Trustee may reasonably require to perform the calculations

                                      -101-

<PAGE>

necessary to make the distributions contemplated by Section 4.01 and to prepare
the statements to Certificateholders contemplated by Section 4.02. The Trustee
shall not be responsible to recompute, recalculate or verify any information
provided to it by the Master Servicer.

                  Not later than fifteen days after each Distribution Date, the
Master Servicer shall forward to the Trustee, the NIMS Insurer and the Depositor
a statement prepared by the Master Servicer setting forth the status of the
Collection Account as of the close of business on such Distribution Date and
showing, for the period covered by such statement, the aggregate amount of
deposits into and withdrawals from the Collection Account of each category of
deposit specified in Section 3.04(b) and each category of withdrawal specified
in Section 3.05. Such statement may be in the form of the then current Fannie
Mae Monthly Accounting Report for its Guaranteed Mortgage Pass-Through Program
with appropriate additions and changes, and shall also include information as to
the aggregate of the outstanding Stated Principal Balances of all of the
Mortgage Loans as of the last day of the calendar month immediately preceding
such Distribution Date. Copies of such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Master Servicer to
the Trustee.

                  (b) The amount of Advances to be made by the Master Servicer
for any Distribution Date shall equal, subject to Section 4.03(d), the sum of
(i) the aggregate amount of Monthly Payments (with each interest portion thereof
net of the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which such REO Property an REO Disposition did not
occur during the related Prepayment Period, an amount equal to the excess, if
any, of the Monthly Payments (with each interest portion thereof net of the
related Servicing Fee) that would have been due on the related Due Date in
respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Distribution Account pursuant to Section 3.13 for
distribution on such Distribution Date.

                  On or before 3:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Master Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Master Servicer with respect to the Mortgage Loans and REO Properties.
Any amounts held for future distribution used by the Master Servicer to make a
Advance as permitted in the preceding sentence or withdrawn by the Master
Servicer as permitted in Section 3.05(a)(vii) in reimbursement of Advances
previously made shall be appropriately reflected in the Master Servicer's
records and replaced by the Master Servicer by deposit in the Collection Account
on or before any future Master Servicer Remittance Date to the extent that the
Available Funds for the related Distribution Date (determined without regard to
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount

                                      -102-

<PAGE>

that would be distributed to the Classes of Certificateholders pursuant to
Section 4.01 on such Distribution Date if such amounts held for future
distributions had not been so used to make Advances. The Trustee will provide
notice to the Master Servicer and the NIMS Insurer by telecopy by the close of
business on any Master Servicer Remittance Date in the event that the amount
remitted by the Master Servicer to the Trustee on such date is less than the
Advances required to be made by the Master Servicer for the related Distribution
Date.

                  (c) The obligation of the Master Servicer to make such
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from REMIC I pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section.

                  (d) Notwithstanding anything herein to the contrary, no
Advance or Servicing Advance shall be required to be made hereunder by the
Master Servicer if such Advance or Servicing Advance would, if made, constitute
a Nonrecoverable Advance or Nonrecoverable Servicing Advance. The determination
by the Master Servicer that it has made a Nonrecoverable Advance or a
Nonrecoverable Servicing Advance or that any proposed Advance or Servicing
Advance, if made, would constitute a Nonrecoverable Advance or Nonrecoverable
Servicing Advance, respectively, shall be evidenced by an Officers' Certificate
of the Master Servicer delivered to the Trustee and the NIMS Insurer.

                  (e) The Master Servicer shall deliver to the Trustee for
deposit into the Distribution Account on or before 3:00 p.m. New York time on
the Master Servicer Remittance Date from its own funds an amount ("Compensating
Interest") equal to the lesser of (i) the aggregate of the Prepayment Interest
Shortfalls for the related Distribution Date resulting solely from Principal
Prepayments during the related Prepayment Period and (ii) the amount of its
aggregate Servicing Fee for the most recently ended calendar month. The Master
Servicer shall not have the right to reimbursement for any amounts remitted to
the Trustee in respect of Prepayment Interest Shortfalls. Such amounts so
remitted shall be included in the Available Funds and distributed therewith on
the next Distribution Date. The Master Servicer shall not be obligated to pay
any amounts with respect to Relief Act Interest Shortfalls.

                  (f) With respect to each of the obligations of the Master
Servicer set forth in this Section 4.03 and the Specially Serviced Mortgage
Loans, such obligations will be assumed directly by the Special Sub-Servicer
pursuant to the terms of the Special Sub-Servicing Agreement and any references
to the Master Servicer in Section 4.03 in this Agreement shall refer to the
Special Sub- Servicer with respect to the Specially Serviced Mortgage Loans.

                  SECTION 4.04. Allocation of Realized Losses.

                  (a) On or before each Determination Date, the Master Servicer
shall determine as to each Mortgage Loan and REO Property: (i) the total amount
of Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Bankruptcy Losses and (iii) the
respective portions of such Realized Losses allocable to interest and allocable
to principal.

                                      -103-

<PAGE>

On or before each Determination Date, the Master Servicer shall also determine
as to each Mortgage Loan: (A) the total amount of Realized Losses, if any,
incurred in connection with any Deficient Valuations made during the related
Prepayment Period and (B) the total amount of Realized Losses, if any, incurred
in connection with Debt Service Reductions in respect of Monthly Payments due
during the related Due Period. The information described in the two preceding
sentences that is to be supplied by the Master Servicer shall be evidenced by an
Officers' Certificate delivered to the Trustee by the Master Servicer on the
Master Servicer Reporting Date immediately following the end of (x) in the case
of Bankruptcy Losses allocable to interest, the Due Period during which any such
Realized Loss was incurred, and (y) in the case of all other Realized Losses,
the Prepayment Period during which any such Realized Loss was incurred.

                  (b) All Realized Losses on the Mortgage Loans shall be
allocated to any REMIC II Regular Interest pursuant to Section 4.04(c) and shall
be allocated by the Trustee on each Distribution Date as follows: first, to Net
Monthly Excess Cashflow; second, to the Class CE Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class M-5 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; fourth, to the Class M-4 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; fifth, to the Class M-3
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; sixth, to the Class M-2 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero and seventh, to the Class M-1
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero. All Realized Losses to be allocated to the Certificate Principal
Balances of all Classes on any Distribution Date shall be so allocated after the
actual distributions to be made on such date as provided above. All references
above to the Certificate Principal Balance of any Class of Certificates shall be
to the Certificate Principal Balance of such Class immediately prior to the
relevant Distribution Date, before reduction thereof by any Realized Losses, in
each case to be allocated to such Class of Certificates, on such Distribution
Date.

                  Any allocation of Realized Losses to a Mezzanine Certificate
on any Distribution Date shall be made by reducing the Certificate Principal
Balance thereof by the amount so allocated; any allocation of Realized Losses to
a Class CE Certificate shall be made by reducing the amount otherwise payable in
respect thereof pursuant to Section 4.01(a)(4)(vii). No allocations of any
Realized Losses shall be made to the Certificate Principal Balances of the Class
A Certificates or the Class P Certificates.

                  (c) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the following REMIC I
Regular Interests in the specified percentages, as follows: first, to
Uncertificated Interest payable to the REMIC I Regular Interest I-LTAA and REMIC
I Regular Interest I-LTZZ up to an aggregate amount equal to the REMIC I
Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Balances of the REMIC I Regular Interest I-LTAA and REMIC I
Regular Interest I-LTZZ up to an aggregate amount equal to the REMIC I Principal
Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM5 and
REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM5 has been reduced to
zero; fourth to the Uncertificated Balances of REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTM4 and REMIC I Regular Interest I-LTZZ, 98%, 1% and
1%, respectively, until the Uncertificated Balance of REMIC

                                      -104-

<PAGE>

I Regular Interest I-LTM4 has been reduced to zero; fifth to the Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM3 and
REMIC I Regular Interest I- LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM3 has been reduced to
zero; sixth to the Uncertificated Balances of REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTM2 and REMIC I Regular Interest I-LTZZ, 98%, 1% and
1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM2 has been reduced to zero; and seventh, to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM1 and REMIC I
Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM1 has been reduced to zero.

                  SECTION 4.05.  Compliance with Withholding Requirements.

                  Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.

                  SECTION 4.06. Commission Reporting.

                  (a) The Trustee shall reasonably cooperate with the Depositor
in connection with the Trust's satisfying the reporting requirements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Trustee
shall prepare on behalf of the Trust any Forms 8-K and 10-K customary for
similar securities as required by the Exchange Act and the Rules and Regulations
of the Securities and Exchange Commission thereunder, and the Depositor shall
sign (or shall cause another entity acceptable to the Securities and Exchange
Commission to sign) and the Trustee shall file (via the Securities and Exchange
Commission's Electronic Data Gathering and Retrieval System) such forms on
behalf of the Depositor (or such other entity). The Depositor hereby grants to
the Trustee a limited power of attorney to execute any Form 8-K and file each
such document on behalf of the Depositor. Such power of attorney shall continue
until 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.
Notwithstanding anything herein to the contrary, the Depositor, and not the
Trustee, shall be responsible for executing each Form 10-K filed on behalf of
the Trust.

                  (b) Each Form 8-K shall be filed by the Trustee within 15 days
after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the Securities and Exchange Commission),
the Trustee shall file a Form 10-K, in substance as required by applicable law
or applicable Securities and Exchange Commission staff's interpretations. Such
Form 10-K shall include as exhibits the Master Servicer's annual statement of
compliance described under Section 3.19 and the accountant's report described
under Section 3.20, in each case to the extent they have been timely delivered
to the Trustee. If they are not so timely delivered, the Trustee shall file an
amended Form 10-K including

                                      -105-

<PAGE>

such documents as exhibits reasonably promptly after they are delivered to the
Trustee. The Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct. The Form 10-K shall also include a
certification in the form attached hereto as Exhibit J-1 (the "Certification"),
which shall be signed by the senior officer of the Depositor in charge of
securitization.

                  (c) In addition, the Trustee shall sign a certification (in
the form attached hereto as Exhibit J-2) for the benefit of the Depositor and
its officers, directors and Affiliates regarding certain aspects of items 1
through 3 of the Certification (provided, however, that the Trustee shall not
undertake an analysis of the accountant's report attached as an exhibit to the
Form 10-K). The Trustee's certification shall be delivered to the Depositor by
no later than March 18th of each year (or if such day is not a Business Day, the
immediately preceding Business Day) and the Depositor shall deliver the
Certification to the Trustee for filing no later than March 20th of each year
(or if such day is not a Business Day, the immediately preceding Business Day).

                  In addition, the Trustee shall indemnify and hold harmless the
Depositor and its officers, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach of the Trustee's obligations under this Section 4.06 or the
Trustee's negligence, bad faith or willful misconduct in connection therewith.
The Depositor shall indemnify and hold harmless the Trustee and its officers,
directors and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
Depositor's obligations under this Section 4.06 or the Depositor's negligence,
bad faith or willful misconduct in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the
Depositor or the Trustee, as applicable, then the other party, in connection
with a breach of its respective obligations under this Section 4.06 or its
respective negligence, bad faith or willful misconduct in connection therewith,
agrees that it shall contribute to the amount paid or payable by the other party
as a result of the losses, claims, damages or liabilities of the other party in
such proportion as is appropriate to reflect the relative fault of the Depositor
on the one hand and the Trustee on the other.

                  (d) Upon any filing with the Securities and Exchange
Commission, the Trustee shall promptly deliver to the Depositor a copy of any
executed report, statement or information.

                  (e) Prior to January 30 of the first year in which the Trustee
is able to do so under applicable law, the Trustee shall file a Form 15
Suspension Notification with respect to the Trust.

                  (f) To the extent that, following the Closing Date, the
Depositor certifies that reports and certifications differing from those
required under this Section 4.06 comply with the reporting requirements under
the Exchange Act, the Trustee hereby agrees that it will reasonably cooperate to
amend the provisions of this Section 4.06 (in accordance with Section 11.01) in
order to comply with such amended reporting requirements and such amendment of
this Section 4.06. Any such amendment may result in the reduction of the reports
filed by the Depositor under the Exchange

                                      -106-

<PAGE>

Act. Notwithstanding the foregoing, the Trustee shall not be obligated to enter
into any amendment pursuant to this Section that adversely affects its
obligations and immunities under this Agreement.

                  SECTION 4.07. [Reserved].

                  SECTION 4.08. [Reserved].

                  SECTION 4.09. [Reserved].

                  SECTION 4.10 Net WAC Rate Carryover Reserve Account.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain with itself, as agent for the Trustee, a separate,
segregated trust account titled, "Net WAC Rate Carryover Reserve Account,
Deutsche Bank National Trust Company, as Trustee, in trust for the registered
holders of Ameriquest Mortgage Securities Inc., Asset-Backed Pass-Through
Certificates, Series 2003-7." On the Closing Date, the Depositor will deposit,
or cause to be deposited, into the Net WAC Rate Carryover Reserve Account
$1,000. In addition, the Trustee shall deposit into the Net WAC Rate Carryover
Reserve Account any payments received by it under the Cap Contract for the
benefit of the Holders of the Class A Certificates.

                  (b) On each Distribution Date as to which there is a Net WAC
Rate Carryover Amount payable to the Class A Certificates or the Mezzanine
Certificates, the Trustee has been directed by the Holders of the Class CE
Certificates to, and therefore will, deposit into the Net WAC Rate Carryover
Reserve Account the amount of such Net WAC Rate Carryover Amount, rather than
distributing such amounts to the Holders of the Class CE Certificates. On each
such Distribution Date, the Trustee shall hold all such amounts for the benefit
of the Holders of the Class A Certificates and the Mezzanine Certificates, and
will distribute such amounts to the Holders of the Class A Certificates and the
Mezzanine Certificates in the amounts and priorities set forth in Section
4.01(a). If no Net WAC Rate Carryover Amounts are payable on a Distribution
Date, the Trustee shall deposit into the Net WAC Rate Carryover Reserve Account
on behalf of the Holders of the Class CE Certificates, from amounts otherwise
distributable to the Holders of the Class CE Certificates, an amount such that
when added to other amounts already on deposit in the Net WAC Rate Carryover
Reserve Account, the aggregate amount on deposit therein is equal to $1,000.

                  (c) For federal and state income tax purposes, the Holders of
the Class CE Certificates will be deemed to be the owners of the Net WAC Rate
Carryover Reserve Account and all amounts deposited into the Net WAC Rate
Carryover Reserve Account (other than the initial deposit therein of $1,000)
shall be treated as amounts distributed by REMIC II to the Holders of the Class
CE Certificates. Upon the termination of the Trust, or the payment in full of
the Class A Certificates and the Mezzanine Certificates, all amounts remaining
on deposit in the Net WAC Rate Carryover Reserve Account will be released by the
Trust and distributed to the Holders of the Class CE Certificates or their
designees. The Net WAC Rate Carryover Reserve Account will be part of the Trust
but not part of any REMIC and any payments to the Holders of the Class A
Certificates or the Mezzanine Certificates of Net WAC Rate Carryover Amounts
will not be payments with respect to a "regular interest" in a REMIC within the
meaning of Code Section 860(G)(a)(1).

                                      -107-

<PAGE>

                  (d) By accepting a Class CE Certificate, each Holder of a
Class CE Certificate hereby agrees to direct the Trustee, and the Trustee hereby
is directed, to deposit into the Net WAC Rate Carryover Reserve Account the
amounts described above on each Distribution Date as to which there is any Net
WAC Rate Carryover Amount rather than distributing such amounts to the Class
Holders of the CE Certificates. By accepting a Class CE Certificate, each Holder
of a Class CE Certificate further agrees that such direction is given for good
and valuable consideration, the receipt and sufficiency of which is acknowledged
by such acceptance.

                  (e) At the written direction of the Holders of a majority in
Percentage Interest in the Class CE Certificates, the Trustee shall direct any
depository institution maintaining the Net WAC Rate Carryover Reserve Account to
invest the funds in such account in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand, (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Trustee or an Affiliate manages or advises such
investment, and (ii) no later than the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if the Trustee or an
Affiliate manages or advises such investment. If no investment direction of the
Holders of a majority in Percentage Interest in the Class CE Certificates with
respect to the Net WAC Rate Carryover Reserve Account is received by the
Trustee, the Trustee shall invest the funds in the Deutsche Bank Institutional
Cash Management Fund 541 so long as it is a Permitted Investment. Interest
earned on such investment shall be deposited into the Net WAC Rate Carryover
Reserve Account.

                  (f) For federal tax return and information reporting, the
right of the Holders of the Class A Certificates and the Mezzanine Certificates
to receive payments from the Net WAC Rate Carryover Reserve Account in respect
of any Net Wac Rate Carryover Amount shall be assigned a value of zero.

                                      -108-

<PAGE>

                                    ARTICLE V

                                THE CERTIFICATES

                  SECTION 5.01. The Certificates.

                  (a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I. At the Closing Date, the aggregate Certificate Principal
Balance of the Certificates will equal the aggregate Stated Principal Balance of
the Mortgage Loans.

                  The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-10. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.

                  Upon original issue, the Certificates shall be executed and
delivered by the Trustee and the Trustee shall cause the Certificates to be
authenticated by the Certificate Registrar to or upon the order of the
Depositor. The Certificates shall be executed and attested by manual or
facsimile signature on behalf of the Trustee by an authorized signatory.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Trustee shall bind the Trustee
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. 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 herein executed by the Certificate Registrar by manual
signature, and such certificate of authentication 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.

                  (b) The Class A Certificates and the Mezzanine Certificates
shall initially be issued as one or more Certificates held by the Book-Entry
Custodian or, if appointed to hold such Certificates as provided below, the
Depository and registered in the name of the Depository or its nominee and,
except as provided below, registration of such Certificates may not be
transferred by the Trustee except to another Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. The Certificate Owners shall hold their respective Ownership Interests
in and to such Certificates through the book-entry facilities of the Depository
and, except as provided below, shall not be entitled to definitive, fully
registered Certificates ("Definitive Certificates") in respect of such Ownership
Interests. All transfers by Certificate Owners of their respective Ownership
Interests in the Book-Entry Certificates shall be made in accordance with the
procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall only
transfer the Ownership Interests in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The Trustee is hereby
initially appointed as the Book-Entry Custodian and hereby agrees to act as such
in accordance herewith and in accordance with the agreement that it has with the
Depository authorizing it to act

                                      -109-

<PAGE>

as such. The Book-Entry Custodian may, and if it is no longer qualified to act
as such, the Book- Entry Custodian shall, appoint, by a written instrument
delivered to the Depositor, the Master Servicer, the Trustee (if the Trustee is
not the Book-Entry Custodian) and any other transfer agent (including the
Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Trustee
resigns or is removed in accordance with the terms hereof, if it so elects, the
Depository shall immediately succeed to its predecessor's duties as Book-Entry
Custodian. The Depositor shall have the right to inspect, and to obtain copies
of, any Certificates held as Book-Entry Certificates by the Book-Entry
Custodian.

                  The Trustee, the Master Servicer and the Depositor may for all
purposes (including the making of payments due on the Book-Entry Certificates)
deal with the Depository as the authorized representative of the Certificate
Owners with respect to the Book-Entry Certificates for the purposes of
exercising the rights of Certificateholders hereunder. The rights of Certificate
Owners with respect to the Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of the Book-Entry Certificates with respect to any particular matter
shall not be deemed inconsistent if they are made with respect to different
Certificate Owners. The Trustee may establish a reasonable record date in
connection with solicitations of consents from or voting by Certificateholders
and shall give notice to the Depository of such record date.

                  If (i)(A) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the Depository
or (iii) after the occurrence of a Master Servicer Event of Default, Certificate
Owners representing in the aggregate not less than 51% of the Ownership
Interests of the Book-Entry Certificates advise the Trustee through the
Depository, in writing, that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Certificate Owners, the
Trustee shall notify all Certificate Owners, through the Depository, 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 Book-Entry Custodian or the Depository, as
applicable, accompanied by registration instructions from the Depository for
registration of transfer, the Trustee shall issue the Definitive Certificates.
Such Definitive Certificates will be issued in minimum denominations of $25,000,
except that any beneficial ownership that was represented by a Book-Entry
Certificate in an amount less than $25,000 immediately prior to the issuance of
a Definitive Certificate shall be issued in a minimum denomination equal to the
amount represented by such Book-Entry Certificate. None of the Depositor, the
Master Servicer or the Trustee shall be liable for any delay in the 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
Depository 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.

                                      -110-

<PAGE>

                  SECTION 5.02. Registration of Transfer and Exchange of
                                Certificates.

                  (a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.12 a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. The Trustee will initially serve as Certificate Registrar
for the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided. The Certificate Registrar may appoint, by a
written instrument delivered to the Master Servicer and the Depositor, any other
bank or trust company to act as Certificate Registrar under such conditions as
the predecessor Certificate Registrar may prescribe, provided that the
predecessor Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment. If the Trustee shall
at any time not be the Certificate Registrar, the Trustee shall have and
maintain the right to inspect the Certificate Register or to obtain a copy
thereof at all reasonable times, and to rely conclusively upon a certificate of
the Certificate Registrar as to the information set forth in the Certificate
Register.

                  (b) No transfer of any Class CE Certificate, Class P
Certificate or Residual Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of a Class CE Certificate, Class P Certificate or
Residual Certificate is to be made without registration or qualification (other
than in connection with the initial transfer of any such Certificate by the
Depositor to an affiliate of the Depositor), the Trustee and the Certificate
Registrar shall each require receipt of: (i) if such transfer is purportedly
being made in reliance upon Rule 144A under the 1933 Act, written certifications
from the Certificateholder desiring to effect the transfer and from such
Certificateholder's prospective transferee, substantially in the forms attached
hereto as Exhibit F-1; and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration
(which Opinion of Counsel shall not be an expense of the Depositor, the Trustee,
the Master Servicer, in its capacity as such, or the Trust Fund), together with
copies of the written certification(s) of the Certificateholder desiring to
effect the transfer and/or such Certificateholder's prospective transferee upon
which such Opinion of Counsel is based, if any. None of the Depositor, the
Certificate Registrar or the Trustee is obligated to register or qualify the
Class CE Certificates, the Class P Certificates or the Residual Certificates
under the 1933 Act or any other securities laws or to take any action not
otherwise required under this Agreement to permit the transfer of such
Certificates without registration or qualification. Any Certificateholder
desiring to effect the transfer of a Class CE Certificate, a Class P Certificate
or a Residual Certificate shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Certificate Registrar and the Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

                  Notwithstanding the foregoing, no certification or Opinion of
Counsel described in this Section 5.02(b) will be required in connection with
the transfer, on the Closing Date, of any Class R Certificate or Class R-X
Certificate by the Depositor to an "accredited investor" within the meaning of
Rule 501(d) of the 1933 Act.

                                      -111-

<PAGE>

                  (c) No transfer of a Certificate or any interest therein shall
be made to any Plan subject to ERISA or Section 4975 of the Code, any Person
acting, directly or indirectly, on behalf of any such Plan or any Person
acquiring such Certificates with "Plan Assets" of a Plan within the meaning of
the Department of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101
("Plan Assets"), as certified by such transferee in the form of Exhibit G,
unless the Trustee is provided with an Opinion of Counsel which establishes to
the satisfaction of the Trustee that the purchase and holding of such
Certificates is permissible under applicable law, will not constitute or result
in any non-exempt prohibited transaction under ERISA or Section 4975 of the Code
and will not subject the Depositor, the Master Servicer, any other servicer, the
NIMS Insurer, the Trustee or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of such persons and upon which such persons may rely.
Any purchaser of a Class A Certificate or a Mezzanine Certificate shall be
deemed to have made such certification unless it delivers such Opinion of
Counsel. Neither an Opinion of Counsel nor any certification will be required in
connection with the initial transfer of any such Certificate by the Depositor to
an affiliate of the Depositor (in which case, the Depositor or any affiliate
thereof shall have deemed to have represented that such affiliate is not a Plan
or a Person investing Plan Assets) and the Trustee shall be entitled to
conclusively rely upon a representation (which, upon the request of the Trustee,
shall be a written representation) from the Depositor of the status of such
transferee as an affiliate of the Depositor.

                  If any Certificate or any interest therein is acquired or held
in violation of the provisions of the preceding paragraph, the next preceding
permitted beneficial owner will be treated as the beneficial owner of that
Certificate retroactive to the date of transfer to the purported beneficial
owner. Any purported beneficial owner whose acquisition or holding of any such
Certificate or interest therein was effected in violation of the provisions of
the preceding paragraph shall indemnify and hold harmless the Depositor, the
Master Servicer, any other servicer, the Trustee, the NIMS Insurer and the Trust
Fund from and against any and all liabilities, claims, costs or expenses
incurred by those parties as a result of that acquisition or holding.

                  (d)(i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Certificate
Registrar or its designee under clause (iii)(A) below to deliver payments to a
Person other than such Person and to negotiate the terms of any mandatory sale
under clause (iii)(B) below and to execute all instruments of Transfer and to do
all other things necessary in connection with any such sale. The rights of each
Person acquiring any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions:

                  (A) Each Person holding or acquiring any Ownership Interest in
         a Residual Certificate shall be a Permitted Transferee and shall
         promptly notify the Certificate Registrar of any change or impending
         change in its status as a Permitted Transferee.

                  (B) In connection with any proposed Transfer of any Ownership
         Interest in a Residual Certificate, the Certificate Registrar shall
         require delivery to it and shall not register the Transfer of any
         Residual Certificate until its receipt of an affidavit and agreement (a

                                      -112-

<PAGE>

         "Transfer Affidavit and Agreement"), in the form attached hereto as
         Exhibit F-2 from the proposed Transferee, in form and substance
         satisfactory to the Certificate Registrar, representing and warranting,
         among other things, that such Transferee is a Permitted Transferee,
         that it is not acquiring its Ownership Interest in the Residual
         Certificate that is the subject of the proposed Transfer as a nominee,
         trustee or agent for any Person that is not a Permitted Transferee,
         that for so long as it retains its Ownership Interest in a Residual
         Certificate, it will endeavor to remain a Permitted Transferee, and
         that it has reviewed the provisions of this Section 5.02(d) and agrees
         to be bound by them.

                  (C) Notwithstanding the delivery of a Transfer Affidavit and
         Agreement by a proposed Transferee under clause (B) above, if a
         Responsible Officer of the Certificate Registrar who is assigned to
         this transaction has actual knowledge that the proposed Transferee is
         not a Permitted Transferee, no Transfer of an Ownership Interest in a
         Residual Certificate to such proposed Transferee shall be effected.

                  (D) Each Person holding or acquiring any Ownership Interest in
         a Residual Certificate shall agree (x) to require a Transfer Affidavit
         and Agreement from any other Person to whom such Person attempts to
         transfer its Ownership Interest in a Residual Certificate and (y) not
         to transfer its Ownership Interest unless it provides a Transferor
         Affidavit (in the form attached hereto as Exhibit F-2), to the
         Certificate Registrar stating that, among other things, it has no
         actual knowledge that such other Person is not a Permitted Transferee.

                  (E) Each Person holding or acquiring an Ownership Interest in
         a Residual Certificate, by purchasing an Ownership Interest in such
         Certificate, agrees to give the Certificate Registrar written notice
         that it is a "pass-through interest holder" within the meaning of
         temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately
         upon acquiring an Ownership Interest in a Residual Certificate, if it
         is, or is holding an Ownership Interest in a Residual Certificate on
         behalf of, a "pass-through interest holder."

                  (ii) The Certificate Registrar will register the Transfer of
any Residual Certificate only if it shall have received the Transfer Affidavit
and Agreement and all of such other documents as shall have been reasonably
required by the Certificate Registrar as a condition to such registration. In
addition, no Transfer of a Residual Certificate shall be made unless the
Certificate Registrar shall have received a representation letter from the
Transferee of such Certificate to the effect that such Transferee is a Permitted
Transferee.

                  (iii)(A) If any purported Transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section 5.02(d),
then the last preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights as holder thereof retroactive to the date of
registration of such Transfer of such Residual Certificate. The Certificate
Registrar 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
5.02(d) or for making any payments due on such Certificate to the holder thereof
or for taking any other action with respect to such holder under the provisions
of this Agreement.

                                      -113-

<PAGE>

                  (B) If any purported Transferee shall become a holder of a
         Residual Certificate in violation of the restrictions in this Section
         5.02(d) and to the extent that the retroactive restoration of the
         rights of the holder of such Residual Certificate as described in
         clause (iii)(A) above shall be invalid, illegal or unenforceable, then
         the Certificate Registrar shall have the right, without notice to the
         holder or any prior holder of such Residual Certificate, to sell such
         Residual Certificate to a purchaser selected by the Certificate
         Registrar on such terms as the Certificate Registrar may choose. Such
         purported Transferee shall promptly endorse and deliver each Residual
         Certificate in accordance with the instructions of the Certificate
         Registrar. Such purchaser may be the Certificate Registrar itself or
         any Affiliate of the Certificate Registrar. The proceeds of such sale,
         net of the commissions (which may include commissions payable to the
         Certificate Registrar or its Affiliates), expenses and taxes due, if
         any, will be remitted by the Certificate Registrar to such purported
         Transferee. The terms and conditions of any sale under this clause
         (iii)(B) shall be determined in the sole discretion of the Certificate
         Registrar, and the Certificate Registrar shall not be liable to any
         Person having an Ownership Interest in a Residual Certificate as a
         result of its exercise of such discretion.

                  (iv) The Trustee shall make available to the Internal Revenue
Service and those Persons specified by the REMIC Provisions all information
necessary to compute any tax imposed (A) as a result of the Transfer of an
Ownership Interest in a Residual Certificate to any Person who is a Disqualified
Organization, including the information described in Treasury regulations
sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess
inclusions" of such Residual Certificate and (B) as a result of any regulated
investment company, real estate investment trust, common trust fund,
partnership, trust, estate or organization described in Section 1381 of the Code
that holds an Ownership Interest in a Residual Certificate having as among its
record holders at any time any Person which is a Disqualified Organization.
Reasonable compensation for providing such information may be accepted by the
Trustee.

                  (v) The provisions of this Section 5.02(d) set forth prior to
this subsection (v) may be modified, added to or eliminated, provided that there
shall have been delivered to the Trustee at the expense of the party seeking to
modify, add to or eliminate any such provision the following:

                  (A) written notification from each Rating Agency to the effect
         that the modification, addition to or elimination of such provisions
         will not cause such Rating Agency to downgrade its then-current ratings
         of any Class of Certificates; and

                  (B) an Opinion of Counsel, in form and substance satisfactory
         to the Trustee, to the effect that such modification of, addition to or
         elimination of such provisions will not cause any Trust REMIC to cease
         to qualify as a REMIC and will not cause any Trust REMIC, as the case
         may be, to be subject to an entity-level tax caused by the Transfer of
         any Residual Certificate to a Person that is not a Permitted Transferee
         or (y) a Person other than the prospective transferee to be subject to
         a REMIC-tax caused by the Transfer of a Residual Certificate to a
         Person that is not a Permitted Transferee.

                  The Trustee shall forward to the NIMS Insurer a copy of the
items delivered to it pursuant to (A) and (B) above.

                                      -114-

<PAGE>

                  (e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 8.12, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.

                  (f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Trustee maintained
for such purpose pursuant to Section 8.12. Whenever any Certificates are so
surrendered for exchange the Trustee, shall execute and cause the Certificate
Registrar to authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trustee) be duly endorsed by, or be accompanied by a written instrument of
transfer in the form satisfactory to the Trustee and the Certificate Registrar
duly executed by, the Holder thereof or his attorney duly authorized in writing.
In addition, with respect to each Residual Certificate, the Holder thereof may
exchange, in the manner described above, (i) the Class R Certificate for two
separate Certificates, each representing such Holder's respective Percentage
Interest in the Class R-I Interest and the Class R-II Interest, respectively, in
each case that was evidenced by the Class R Certificate being exchanged or (ii)
the Class R-X Certificate for six separate Certificates, each representing such
Holder's respective Percentage Interest in the Class R-III Interest, the Class
R-IV Interest, the Class R-V Interest, the Class R-VI Interest, the Class R-VII
Interest and the Class R-VIII Interest, respectively, in each case that was
evidenced by the Class R-X Certificate being exchanged.

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

                  (h) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Certificate Registrar in accordance with
its customary procedures.

                  (i) The Trustee will cause the Certificate Registrar (unless
the Trustee is acting as Certificate Registrar) to provide notice to the Trustee
of each transfer of a Certificate and to provide the Trustee with an updated
copy of the Certificate Register on the first Business Day in March and August
of each year, commencing in August 2003.

                  (j) Any attempted or purported transfer of any Certificate in
violation of the provisions of Section 5.02(c) hereof shall be void ab initio
and such Certificate shall be considered to have been held continuously by the
prior permitted Holder.

                  SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
                                Certificates.

                  If (i) any mutilated Certificate is surrendered to the Trustee
or the Certificate Registrar, or the Trustee and the Certificate Registrar
receive evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee, the NIMS

                                      -115-

<PAGE>

Insurer and the Certificate Registrar such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of actual
knowledge by the Trustee or the Certificate Registrar that such Certificate has
been acquired by a bona fide purchaser or the Trustee shall execute and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of the same Class and of like denomination and
Percentage Interest. Upon the issuance of any new Certificate under this
Section, the Trustee may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Certificate Registrar)
connected therewith. Any replacement Certificate issued pursuant to this Section
shall constitute complete and indefeasible evidence of ownership in the
applicable REMIC created hereunder, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.

                  SECTION 5.04. Persons Deemed Owners.

                  The Depositor, the Master Servicer, the Trustee, the NIMS
Insurer, the Certificate Registrar and any agent of any of them may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
and for all other purposes whatsoever, and none of the Depositor, the Master
Servicer, the Trustee, the Certificate Registrar, the NIMS Insurer or any agent
of any of them shall be affected by notice to the contrary.

                  SECTION 5.05. Certain Available Information.

                  On or prior to the date of the first sale of any Class CE
Certificate, Class P Certificate or Residual Certificate to an Independent third
party, the Depositor shall provide to the Trustee ten copies of any private
placement memorandum or other disclosure document used by the Depositor in
connection with the offer and sale of the Class CE Certificates, the Class P
Certificates or the Residual Certificates. In addition, if any such private
placement memorandum or disclosure document is revised, amended or supplemented
at any time following the delivery thereof to the Trustee, the Depositor
promptly shall inform the Trustee of such event and shall deliver to the Trustee
ten copies of the private placement memorandum or disclosure document, as
revised, amended or supplemented. The Trustee shall maintain at its Corporate
Trust Office and shall make available free of charge during normal business
hours for review by any Holder of a Certificate or Certificate Owner or any
Person identified to the Trustee as a prospective transferee of a Certificate,
originals or copies of the following items: (i) in the case of a Holder or
prospective transferee of a Class CE Certificate, a Class P Certificate or a
Residual Certificate, the private placement memorandum or other disclosure
document relating to such Certificates, if any, in the form most recently
provided to the Trustee; and (ii) in all cases, (A) this Agreement and any
amendments hereof entered into pursuant to Section 11.01, (B) all monthly
statements required to be delivered to Certificateholders of the relevant Class
pursuant to Section 4.02 since the Closing Date, and all other notices, reports,
statements and written communications delivered to the Certificateholders of the
relevant Class pursuant to this Agreement since the Closing Date, (C) all
certifications delivered by a Responsible Officer of the Trustee since the
Closing Date pursuant to Section 10.01(h), (D) any and all Officers'
Certificates delivered to the Trustee by the Master Servicer since the Closing
Date to evidence the Master Servicer's determination that any Advance or
Servicing Advance was, or if made, would be a Nonrecoverable Advance or
Nonrecoverable Servicing Advance, respectively, and

                                      -116-

<PAGE>

(E) any and all Officers' Certificates delivered to the Trustee by the Master
Servicer since the Closing Date pursuant to Section 4.04(a). Copies and mailing
of any and all of the foregoing items will be available from the Trustee upon
request at the expense of the person requesting the same.

                                      -117-

<PAGE>

                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

                  SECTION 6.01. Liability of the Depositor and the Master
                                Servicer.

                  The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement and undertaken hereunder by the Depositor and the Master
Servicer herein.

                  SECTION 6.02. Merger or Consolidation of the Depositor or the
                                Master Servicer.

                  Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
the Master Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and its qualification as an approved conventional seller/servicer
for Fannie Mae or Freddie Mac in good standing. The Depositor and the Master
Servicer each will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its respective duties
under this Agreement.

                  The Depositor or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
Fannie Mae or Freddie Mac; and provided further that the Rating Agencies'
ratings of the Class A Certificates and the Mezzanine Certificates in effect
immediately prior to such merger or consolidation will not be qualified, reduced
or withdrawn as a result thereof (as evidenced by a letter to such effect from
the Rating Agencies).

                  SECTION 6.03. Limitation on Liability of the Depositor, the
                                Master Servicer and Others.

                  None of the Depositor, the NIMS Insurer, the Master Servicer
or any of the directors, officers, employees or agents of the Depositor or the
Master Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the NIMS
Insurer, the Master Servicer or any such person against any breach of
warranties, representations or covenants made herein, or against any specific
liability imposed on the Master Servicer pursuant hereto, or against any
liability which

                                      -118-

<PAGE>

would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the NIMS Insurer, the Master
Servicer or the Trustee and any director, officer, employee or agent of the
Depositor, the NIMS Insurer, the Master Servicer or the Trustee may rely in good
faith on any document of any kind which, PRIMA FACIE, is properly executed and
submitted by any Person respecting any matters arising hereunder.

                  The Depositor, the NIMS Insurer, the Master Servicer and any
director, officer, employee or agent of the Depositor, the NIMS Insurer or the
Master Servicer shall be indemnified and held harmless by the Trust Fund against
any loss, liability or expense incurred in connection with any legal action
relating to this Agreement, the Certificates or a breach of any representation
or warranty regarding the Mortgage Loans, other than any loss, liability or
expense relating to any specific Mortgage Loan or Mortgage Loans (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) or any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of duties hereunder or
by reason of reckless disregard of obligations and duties hereunder. Neither the
Depositor, the NIMS Insurer nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action unless such action
is related to its respective duties under this Agreement and, in its opinion,
does not involve it in any expense or liability; provided, however, that each of
the Depositor, the NIMS Insurer and the Master Servicer may in its discretion
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, unless the
Depositor or the Master Servicer acts without the consent of Holders of
Certificates entitled to at least 51% of the Voting Rights (which consent shall
not be necessary in the case of litigation or other legal action by either to
enforce their respective rights or defend themselves hereunder), the legal
expenses and costs of such action and any liability resulting therefrom (except
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder) shall be expenses, costs
and liabilities of the Trust Fund, and the Depositor, the NIMS Insurer and the
Master Servicer shall be entitled to be reimbursed therefor from the Collection
Account as and to the extent provided in Section 3.05, any such right of
reimbursement being prior to the rights of the Certificateholders to receive any
amount in the Collection Account.

                  SECTION 6.04. Limitation on Resignation of the Master
                                Servicer.

                  The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that its duties
hereunder are no longer permissible under applicable law or (ii) with the
written consent of the Trustee, the NIMS Insurer and written confirmation from
each Rating Agency (which confirmation shall be furnished to the Depositor, the
NIMS Insurer and the Trustee) that such resignation will not cause such Rating
Agency to reduce the then current rating of the Class A Certificates or the
Mezzanine Certificates. Any such determination pursuant to clause (i) of the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect obtained at the expense of the
Master Servicer and delivered to the Trustee and the NIMS Insurer. No
resignation of the Master Servicer shall become effective until the Trustee or a
successor servicer acceptable to the NIMS Insurer shall have assumed the Master
Servicer's responsibilities, duties, liabilities (other than

                                      -119-

<PAGE>

those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.

                  Except as expressly provided herein, the Master Servicer shall
not assign or transfer any of its rights, benefits or privileges hereunder to
any other Person, nor delegate to or subcontract with, nor authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder. If, pursuant to any provision
hereof, the duties of the Master Servicer are transferred to a successor master
servicer, the entire amount of the Servicing Fee and other compensation payable
to the Master Servicer pursuant hereto shall thereafter be payable to such
successor Master Servicer.

                  In the event that the Special Sub-Servicer is designated as
the successor Master Servicer pursuant to Section 7.02(a), the Trustee and the
Depositor hereby specifically (i) consent to the pledge and assignment by the
Special Sub-Servicer (in its capacity as successor Master Servicer) of all of
the Special Sub-Servicer's (in its capacity as successor Master Servicer) right,
title and interest in, to and under this Agreement to the Servicing Rights
Pledgee, for the benefit of certain lenders and (ii) provided that no Master
Servicer Event of Default exists (with respect to the Special Sub-Servicer, in
its capacity as successor Master Servicer), agree that upon delivery to the
Trustee by the Servicing Rights Pledgee of (x) a letter signed by the Special
Sub-Servicer (in its capacity as successor Master Servicer) whereunder the
Special Sub-Servicer (in its capacity as successor Master Servicer) shall resign
as successor Master Servicer under this Agreement and (y) a letter signed by the
Servicing Rights Pledgee or its designee, whereunder such party acknowledges
such assignment and agrees to be subject to the terms of this Agreement, the
Trustee shall appoint the Servicing Rights Pledgee or its designee as successor
Master Servicer pursuant to Section 7.02, provided that at the time of such
appointment, the Servicing Rights Pledgee or such designee meets the
requirements of a successor Master Servicer pursuant to Section 7.02(a) hereof.
If, pursuant to any provision hereof, the duties of the Special Sub-Servicer (in
its capacity as successor Master Servicer) are transferred to a successor master
servicer, the entire amount of the Servicing Fee and other compensation payable
to the Special Sub-Servicer (in its capacity as successor Master Servicer)
pursuant hereto shall thereafter be payable to such successor master servicer.

                  SECTION 6.05. Rights of the Depositor in Respect of the Master
                                Servicer.

                  The Master Servicer shall afford (and any Sub-Servicing
Agreement shall provide that each Sub-Servicer shall afford) the Depositor, the
NIMS Insurer and the Trustee, upon reasonable notice, during normal business
hours, access to all records maintained by the Master Servicer (and any such
Sub-Servicer) in respect of the Master Servicer's rights and obligations
hereunder and access to officers of the Master Servicer (and those of any such
Sub-Servicer) responsible for such obligations. Upon request, the Master
Servicer shall furnish to the Depositor, the NIMS Insurer and the Trustee its
(and any such Sub-Servicer's) most recent financial statements and such other
information relating to the Master Servicer's capacity to perform its
obligations under this Agreement that it possesses. To the extent such
information is not otherwise available to the public, the Depositor, the NIMS
Insurer and the Trustee shall not disseminate any information obtained pursuant
to the preceding two sentences without the Master Servicer's (or any such
Sub-Servicer's) written consent, except as required pursuant to this Agreement
or to the extent that it is appropriate to do so (i) in working with legal
counsel, auditors, taxing authorities or other governmental

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agencies, rating agencies or reinsurers or (ii) pursuant to any law, rule,
regulation, order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over the Depositor, the Trustee or
the Trust Fund, and in either case, the Depositor, the NIMS Insurer or the
Trustee, as the case may be, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the Master Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer under this
Agreement or exercise the rights of the Master Servicer under this Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.

                  SECTION 6.06. Sub-Servicing Agreements Between the Master
                                Servicer and Sub-Servicers.

                  (a) The Master Servicer may enter into Sub-Servicing
Agreements (provided that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the ratings on any Class of Certificates and
the NIMS Insurer shall have consented to such Sub-Servicing Agreement) with
Sub-Servicers, for the servicing and administration of the Mortgage Loans. The
Trustee is hereby authorized and directed to acknowledge, at the written request
of the Master Servicer, any Sub-Servicing Agreement that meets the requirements
applicable to Sub-Servicing Agreements set forth in this Agreement and that is
otherwise permitted under this Agreement.

                  Each Sub-Servicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Sub-Servicer to perform its obligations hereunder and under the Sub-
Servicing Agreement, (ii) an institution approved as a mortgage loan originator
by the Federal Housing Administration or an institution the deposit accounts in
which are insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved
mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 6.11 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer will examine each Sub-Servicing Agreement and will be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement will
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 6.11 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the Sub-
Servicing Accounts or the timing and amount of remittances by the Sub-Servicers
to the Master Servicer, are conclusively deemed to be inconsistent with this
Agreement and therefore prohibited. The Master Servicer shall deliver to the
Trustee and the NIMS Insurer copies of all Sub-Servicing

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<PAGE>

Agreements, and any amendments or modifications thereof, promptly upon the
Master Servicer's execution and delivery of such instruments.

                  (b) As part of its servicing activities hereunder, the Master
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
of the Originator under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub- Servicing Agreement, or to purchase a Mortgage Loan on
account of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement, to
the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Enforcement of the Mortgage Loan Purchase Agreement against the Originator shall
be effected by the Master Servicer to the extent it is not the Originator, and
otherwise by the Trustee, in accordance with the foregoing provisions of this
paragraph.

                  (c) The parties hereto acknowledge that the Special
Sub-Servicer has been retained by the Master Servicer to service the Specially
Serviced Mortgage Loans pursuant to the Special Sub-Servicing Agreement, which
shall constitute a Sub-Servicing Agreement hereunder. As compensation for its
services, the Special Sub-Servicer will be paid the Special Servicing Fee
pursuant to Section 4.01(a)(4)(viii). Notwithstanding anything in this Section
6.06 or Section 6.07 to the contrary, the conditions governing the termination
of the Special Sub-Servicer shall be set forth in the Special Sub-Servicing
Agreement.

                  SECTION 6.07. Successor Sub-Servicers.

                  The Master Servicer, with the consent of the NIMS Insurer,
shall be entitled to terminate any Sub-Servicing Agreement and the rights and
obligations of any Sub-Servicer pursuant to any Sub-Servicing Agreement in
accordance with the terms and conditions of such Sub-Servicing Agreement. In the
event of termination of any Sub-Servicer, all servicing obligations of such Sub-
Servicer shall be assumed simultaneously by the Master Servicer without any act
or deed on the part of such Sub-Servicer or the Master Servicer, and the Master
Servicer either shall service directly the related Mortgage Loans or shall enter
into a Sub-Servicing Agreement with a successor Sub-Servicer which qualifies
under Section 6.06.

                  Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Trustee without fee, in
accordance with the terms of this Agreement, in the event that the Master
Servicer shall, for any reason, no longer be the Master Servicer (including
termination due to a Master Servicer Event of Default).

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<PAGE>

                  SECTION 6.08. Liability of the Master Servicer.

                  Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub-Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. Notwithstanding the foregoing, with respect to the Special Sub-Servicing
Agreement, the Special Sub-Servicer shall be primarily obligated and liable to
the Trustee and the Certificateholders for the servicing and administering of
the Specially Serviced Mortgage Loans and the Master Servicer shall nave no
responsibility or liability therefor. The Master Servicer shall be entitled to
enter into any agreement with a Sub-Servicer for indemnification of the Master
Servicer by such Sub-Servicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.

                  SECTION 6.09. No Contractual Relationship Between
                                Sub-Servicers and the NIMS Insurer, the Trustee
                                or Certificateholders.

                  Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the NIMS Insurer, the Trustee and Certificateholders
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Sub-Servicer except as
set forth in Section 6.10. The Master Servicer shall be solely liable for all
fees owed by it to any Sub-Servicer, irrespective of whether the Master
Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees.

                  SECTION 6.10. Assumption or Termination of Sub-Servicing
                                Agreements by Trustee.

                  In the event the Master Servicer shall for any reason no
longer be the master servicer (including termination due to a Master Servicer
Event of Default), the Trustee or its designee shall thereupon assume (or cause
its designee or the successor master servicer for the Trustee appointed pursuant
to Section 7.02 to assume) all of the rights and obligations of the Master
Servicer under each Sub-Servicing Agreement that the Master Servicer may have
entered into, unless the Trustee elects to terminate any Sub-Servicing Agreement
in accordance with its terms as provided in Section 6.07. Upon such assumption,
the Trustee, its designee or the successor servicer for the Trustee appointed
pursuant to Section 7.02 shall be deemed, subject to Section 6.07, to have
assumed all of the Master Servicer's interest therein and to have replaced the
Master Servicer as a party to each Sub-Servicing Agreement to the same extent as
if each Sub-Servicing Agreement had been assigned to the assuming party, except
that (i) the Master Servicer shall not thereby be relieved of any liability or
obligations under any Sub-Servicing Agreement and (ii) none of the Trustee, its
designee or any

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<PAGE>

successor Master Servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.

                  The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party.

                  SECTION 6.11. Sub-Servicing Accounts.

                  In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account. The
Sub-Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Sub-Servicer's
receipt thereof, all proceeds of Mortgage Loans received by the Sub-Servicer
less its servicing compensation to the extent permitted by the Sub-Servicing
Agreement, and shall thereafter deposit such amounts in the Sub-Servicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Sub- Servicer shall thereafter deposit such
proceeds in the Collection Account or remit such proceeds to the Master Servicer
for deposit in the Collection Account not later than two Business Days after the
deposit of such amounts in the Sub-Servicing Account. For purposes of this
Agreement, the Master Servicer shall be deemed to have received payments on the
Mortgage Loans when the Sub-Servicer receives such payments.

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                                   ARTICLE VII

                                     DEFAULT

                  SECTION 7.01. Master Servicer Events of Default.

                  "Master Servicer Event of Default," wherever used herein,
means any one of the following events:

                  (i) any failure by the Master Servicer to remit to the Trustee
         for distribution to the Certificateholders any payment (other than an
         Advance required to be made from its own funds on any Master Servicer
         Remittance Date pursuant to Section 4.03) required to be made under the
         terms of the Certificates and this Agreement which continues unremedied
         for a period of one Business Day after the date upon which written
         notice of such failure, requiring the same to be remedied, shall have
         been given to the Master Servicer by the Depositor or the Trustee (in
         which case notice shall be provided by telecopy), or to the Master
         Servicer, the Depositor and the Trustee by the NIMS Insurer or the
         Holders of Certificates entitled to at least 25% of the Voting Rights;
         or

                  (ii) any failure on the part of the Master Servicer duly to
         observe or perform in any material respect any of the covenants or
         agreements on the part of the Master Servicer contained in the
         Certificates or in this Agreement (or, if the Master Servicer is the
         Originator, the failure of the Originator to repurchase a Mortgage Loan
         as to which a breach has been established that requires a repurchase
         pursuant to the terms of Section 7 of the Mortgage Loan Purchase
         Agreement) which continues unremedied for a period of 45 days after the
         earlier of (i) the date on which written notice of such failure,
         requiring the same to be remedied, shall have been given to the Master
         Servicer by the Depositor or the Trustee, or to the Master Servicer,
         the Depositor and the Trustee by the NIMS Insurer or the Holders of
         Certificates entitled to at least 25% of the Voting Rights and (ii)
         actual knowledge of such failure by a Servicing Officer of the Master
         Servicer; or

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction in the premises in an involuntary case
         under any present or future federal or state bankruptcy, insolvency or
         similar law or the appointment of a conservator or receiver or
         liquidator in any insolvency, readjustment of debt, marshalling of
         assets and liabilities or similar proceeding, or for the winding-up or
         liquidation of its affairs, shall have been entered against the Master
         Servicer and if such proceeding is being contested by the Master
         Servicer in good faith, such decree or order shall have remained in
         force undischarged or unstayed for a period of 60 days or results in
         the entry of an order for relief or any such adjudication or
         appointment; or

                  (iv) the Master Servicer shall consent to the appointment of a
         conservator or receiver or liquidator in any insolvency, readjustment
         of debt, marshalling of assets and liabilities or similar proceedings
         of or relating to the Master Servicer or of or relating to all or
         substantially all of its property; or

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<PAGE>

                  (v) the Master Servicer shall admit in writing its inability
         to pay its debts generally as they become due, file a petition to take
         advantage of any applicable insolvency or reorganization statute, make
         an assignment for the benefit of its creditors, or voluntarily suspend
         payment of its obligations; or

                  (vi) any failure by the Master Servicer of the Master Servicer
         Termination Test; or

                  (vii) any failure of the Master Servicer to make any Advance
         on any Master Servicer Remittance Date required to be made from its own
         funds pursuant to Section 4.03 which continues unremedied until 3:00
         p.m. New York time on the Business Day immediately following the Master
         Servicer Remittance Date.

                  If a Master Servicer Event of Default described in clauses (i)
through (vi) of this Section shall occur, then, and in each and every such case,
so long as such Master Servicer Event of Default shall not have been remedied,
the Depositor, the NIMS Insurer or the Trustee may, and at the written direction
of the Holders of Certificates entitled to at least 51% of Voting Rights, or at
the direction of the NIMS Insurer, the Trustee shall, by notice in writing to
the Master Servicer and the Depositor, terminate all of the rights and
obligations of the Master Servicer in its capacity as Master Servicer under this
Agreement, to the extent permitted by law, and in and to the Mortgage Loans and
the proceeds thereof. If a Master Servicer Event of Default described in clause
(vii) hereof shall occur, the Trustee shall, by notice in writing to the Master
Servicer and the Depositor, terminate all of the rights and obligations of the
Master Servicer in its capacity as Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof and the Trustee or a
successor Master Servicer appointed in accordance with Section 7.02, shall
immediately make such Advance and assume, pursuant to Section 7.02, the duties
of a successor Master Servicer. On or after the receipt by the Master Servicer
of such written notice, all authority and power of the Master Servicer under
this Agreement, whether with respect to the Certificates (other than as a Holder
of any Certificate) or the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee pursuant to and under this Section and, without
limitation, the Trustee is hereby authorized and empowered, as attorney-in-fact
or otherwise, to execute and deliver on behalf of and at the expense of the
Master Servicer, any and all documents and other instruments and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees, at its sole cost and expense, promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Trustee with all documents and records requested by it to enable it
to assume the Master Servicer's functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Trustee for administration by it of
all cash amounts which at the time shall be or should have been credited by the
Master Servicer to the Collection Account held by or on behalf of the Master
Servicer, the Distribution Account or any REO Account or Servicing Account held
by or on behalf of the Master Servicer or thereafter be received with respect to
the Mortgage Loans or any REO Property serviced by the Master Servicer
(provided, however, that the Master Servicer shall continue to be entitled to
receive all amounts accrued or owing to it under this Agreement on or prior to
the date of such termination, whether in respect of Advances or otherwise, and
shall continue to be entitled to the benefits of Section 6.03, notwithstanding
any such

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<PAGE>

termination, with respect to events occurring prior to such termination). For
purposes of this Section 7.01, the Trustee shall not be deemed to have knowledge
of a Master Servicer Event of Default unless a Responsible Officer of the
Trustee assigned to and working in the Trustee's Corporate Trust Office has
actual knowledge thereof or unless written notice is received by the Trustee of
any such event and such notice references the Certificates, REMIC I or this
Agreement.

                  The Trustee shall be entitled to be reimbursed by the Master
Servicer (or by the Trust Fund if the Master 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 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.

                  SECTION 7.02. Trustee to Act; Appointment of Successor.

                  (a) On and after the time the Master Servicer receives a
notice of termination, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03(c) and its obligation to deposit amounts
in respect of losses pursuant to Section 3.06) by the terms and provisions
hereof including, without limitation, the Master Servicer's obligations to make
Advances pursuant to Section 4.03; provided, however, that if the Trustee is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated to
make Advances pursuant to Section 4.03; and provided further, that any failure
to perform such duties or responsibilities caused by the Master Servicer's
failure to provide information required by Section 7.01 shall not be considered
a default by the Trustee as successor to the Master Servicer hereunder;
provided, however, it is understood and acknowledged by the parties that there
will be a period of transition (not to exceed 90 days) before the servicing
transfer is fully effected. As compensation therefor, effective from and after
the time the Master Servicer receives a notice of termination or immediately
upon assumption of the obligations to make Advances, the Trustee shall be
entitled to the Servicing Fee and all funds relating to the Mortgage Loans to
which the Master Servicer would have been entitled if it had continued to act
hereunder (other than amounts which were due or would become due to the Master
Servicer prior to its termination or resignation). Notwithstanding the above and
subject to the next paragraph, the Trustee may, if it shall be unwilling to so
act, or shall, if it is unable to so act or if it is prohibited by law from
making advances regarding delinquent mortgage loans, or if the Holders of
Certificates entitled to at least 51% of the Voting Rights or the NIMS Insurer
so request in writing to the Trustee promptly appoint or petition a court of
competent jurisdiction to appoint, an established mortgage loan servicing
institution acceptable to each Rating Agency and the NIMS Insurer and having a
net worth of not less than $15,000,000 as the successor to the Master Servicer
under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer under this
Agreement. No appointment of a successor to the Master Servicer under this
Agreement shall be effective until the assumption by the successor of all of the
Master Servicer's responsibilities, duties and liabilities hereunder. In
connection with such appointment and assumption described herein, the Trustee
may make such

                                      -127-

<PAGE>

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 the Master Servicer as such
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Pending appointment of a successor to the Master Servicer under this
Agreement, the Trustee shall act in such capacity as hereinabove provided.

                  Upon removal or resignation of the Master Servicer, the
Trustee, with the cooperation of the Depositor, (x) shall solicit bids for a
successor Master Servicer as described below and (y) pending the appointment of
a successor Master Servicer as a result of soliciting such bids, shall serve as
Master Servicer of the Mortgage Loans serviced by such predecessor Master
Servicer. The Trustee shall solicit, by public announcement, bids from housing
and home finance institutions, banks and mortgage servicing institutions meeting
the qualifications set forth above (including the Trustee or any affiliate
thereof) (including that such mortgage loan servicing institution be acceptable
to each Rating Agency and the NIMS Insurer). Such public announcement shall
specify that the successor Master Servicer shall be entitled to the servicing
compensation agreed upon between the Trustee, the successor Master Servicer and
the Depositor; provided, however, that no such fee shall exceed the Servicing
Fee. Within thirty days after any such public announcement, the Trustee, with
the cooperation of the Depositor, shall negotiate in good faith and effect the
sale, transfer and assignment of the servicing rights and responsibilities
hereunder to the qualified party submitting the highest satisfactory bid as to
the price they will pay to obtain such servicing. The Trustee upon receipt of
the purchase price shall pay such purchase price to the Master Servicer being so
removed, after deducting from any sum received by the Trustee from the successor
to the Master Servicer in respect of such sale, transfer and assignment all
costs and expenses of any public announcement and of any sale, transfer and
assignment of the servicing rights and responsibilities reasonably incurred
hereunder. After such deductions, the remainder of such sum shall be paid by the
Trustee to the Master Servicer at the time of such sale.

                  Notwithstanding the foregoing, the parties hereto acknowledge
that in the event of the termination of the Master Servicer pursuant to Section
7.01, the Special Sub-Servicer shall be appointed the successor Master Servicer
provided that at the time of the Master Servicer's termination hereunder (i) the
Special Sub-Servicer has at least RPS-2 and RSS-2 rankings by Fitch, (ii) the
Special Sub-Servicer has performed its duties and obligations under the Special
Sub- Servicing Agreement, (iii) any Special Sub-Servicer event of termination as
set forth in the Special Sub-Servicing Agreement has not occurred and is not
continuing and (iv) the appointment of the Special Sub-Servicer as successor
Master Servicer will not cause any Rating Agency to withdraw or downgrade its
then-current ratings of any Class of Certificates. Notwithstanding anything
contained herein, if Litton Loan Servicing LP becomes the successor Master
Servicer, the Loss Mitigation Action Plan shall not apply.

                  If, pursuant to 6.04, the Special Sub-Servicer (in its
capacity as successor Master Servicer) assigns of all of the Special
Sub-Servicer's (in its capacity as successor Master Servicer) right, title and
interest in, to and under this Agreement to the Servicing Rights Pledgee or its
designee, the Trustee hereby agrees that such party shall be appointed successor
Master Servicer upon receipt of (x) a letter signed by the Special Sub-Servicer
(in its capacity as successor Master Servicer) whereunder the Special
Sub-Servicer (in its capacity as successor Master Servicer) shall resign as
successor Master Servicer under this Agreement and (y) a letter signed by the
Servicing

                                      -128-

<PAGE>

Rights Pledgee or its designee, whereunder such party acknowledges such
assignment and agrees to be subject to the terms of this Agreement.

                  (b) If the Master Servicer fails to remit to the Trustee for
distribution to the Certificateholders any payment required to be made under the
terms of the Certificates and this Agreement (for purposes of this Section
7.02(b), a "Remittance") because the Master Servicer is the subject of a
proceeding under the federal Bankruptcy Code and the making of such Remittance
is prohibited by Section 362 of the federal Bankruptcy Code, the Trustee shall
upon notice of such prohibition, regardless of whether it has received a notice
of termination under Section 7.01, advance the amount of such Remittance by
depositing such amount in the Distribution Account on the related Distribution
Date. The Trustee shall be obligated to make such advance only if (i) such
advance, in the good faith judgment of the Trustee can reasonably be expected to
be ultimately recoverable from Stayed Funds and (ii) the Trustee is not
prohibited by law from making such advance or obligating itself to do so. Upon
remittance of the Stayed Funds to the Trustee or the deposit thereof in the
Distribution Account by the Master Servicer, a trustee in bankruptcy or a
federal bankruptcy court, the Trustee may recover the amount so advanced,
without interest, by withdrawing such amount from the Distribution Account;
however, nothing in this Agreement shall be deemed to affect the Trustee's
rights to recover from the Master Servicer's own funds interest on the amount of
any such advance. If the Trustee at any time makes an advance under this
Subsection which it later determines in its good faith judgment will not be
ultimately recoverable from the Stayed Funds with respect to which such advance
was made, the Trustee shall be entitled to reimburse itself for such advance,
without interest, by withdrawing from the Distribution Account, out of amounts
on deposit therein, an amount equal to the portion of such advance attributable
to the Stayed Funds.

                  (c) If the Master Servicer is terminated pursuant to Section
7.01, then the successor Master Servicer shall not be permitted to reimburse
itself directly for Advances or Servicing Advances under Section 3.05(a)(ii),
Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii) if the Master
Servicer has not been fully reimbursed for its Advances and Servicing Advances,
but instead the successor Master Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 3.04(g) to the
extent of amounts on deposit in the Collection Account on the related Master
Servicer Remittance Date. The Trustee is hereby authorized to pay to the
terminated Master Servicer (or the related Advancing Person in accordance with
Section 3.23) and the successor Master Servicer, as applicable, reimbursements
for Advances and Servicing Advances from the Distribution Account to the same
extent each such Master Servicer would have been permitted to reimburse itself
for such Advances and/or Servicing Advances in accordance with Section
3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii),
as the case may be. All Advances and Servicing Advances made pursuant to the
terms of this Agreement shall be deemed made and shall be reimbursed on a "first
in-first out" (FIFO) basis. At such time as the Master Servicer (or related
Advancing Person) has been reimbursed for all Advances and Servicing Advances
made by it, the successor Master Servicer shall no longer be required to remit
in accordance with the first sentence of this Section 7.02(c) and shall then be
permitted to reimburse itself directly for Advances and Servicing Advances in
accordance with Section 3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or
Section 3.05(a)(vii).

                  (d) In the event that the Special Sub-Servicer has been
designated as the successor Master Servicer pursuant to Section 7.02(a) and in
the event that following such designation, a Master Servicer Event of Default
has occurred, notwithstanding anything to the contrary above, the

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Trustee and the Depositor hereby agree that upon delivery to the Trustee by the
Servicing Rights Pledgee of a letter signed by the Special Sub-Servicer (in its
capacity as successor Master Servicer) within ten Business Days of when
notification of such event shall have been provided to the Trustee, whereunder
the Special Sub-Servicer (in its capacity as successor Master Servicer) shall
resign as successor Master Servicer under this Agreement, the Trustee shall
appoint the Servicing Rights Pledgee or its designee as successor Master
Servicer, provided that at the time of such appointment, the Servicing Rights
Pledgee or such designee meets the requirements of a successor Master Servicer
set forth above and the Servicing Rights Pledgee or such designee agrees to be
subject to the terms of this Agreement.

                  SECTION 7.03. Notification to Certificateholders.

                  (a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trustee shall give prompt written notice
thereof to Certificateholders and the NIMS Insurer at their respective addresses
appearing in the Certificate Register.

                  (b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to the NIMS Insurer and to all Holders
of Certificates notice of each such occurrence, unless such default or Master
Servicer Event of Default shall have been cured or waived.

                  SECTION 7.04. Waiver of Master Servicer Events of Default.

                  The Holders representing at least 66% of the Voting Rights
(with the consent of the NIMS Insurer) evidenced by all Classes of Certificates
affected by any default or Master Servicer Event of Default hereunder may waive
such default or Master Servicer Event of Default; PROVIDED, HOWEVER, that a
default or Master Servicer Event of Default under clause (i) or (vii) of Section
7.01 may be waived only by all of the Holders of the Regular Certificates (with
the consent of the NIMS Insurer). Upon any such waiver of a default or Master
Servicer Event of Default, such default or Master Servicer Event of Default
shall cease to exist and shall be deemed to have been remedied for every purpose
hereunder. No such waiver shall extend to any subsequent or other default or
Master Servicer Event of Default or impair any right consequent thereon except
to the extent expressly so waived.

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

                  SECTION 8.01. Duties of Trustee.

                  The Trustee, prior to the occurrence of a Master Servicer
Event of Default and after the curing of all Master Servicer Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. During a Master Servicer Event
of Default, the Trustee shall exercise such of the rights and powers vested in
it by this

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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. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.

                  The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform on their face to the requirements of this Agreement. If any such
instrument is found not to conform on its face to the requirements of this
Agreement in a material manner, the Trustee shall take such action as it deems
appropriate to have the instrument corrected, and if the instrument is not
corrected to its respective satisfaction, such dissatisfied party will provide
notice thereof to the Certificateholders and the NIMS Insurer.

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

                  (i) Prior to the occurrence of a Master Servicer Event of
         Default, and after the curing of all such Master Servicer Events of
         Default which may have occurred, the duties and obligations of the
         Trustee shall be determined solely by the express provisions of this
         Agreement, the Trustee shall not be liable except for the performance
         of such duties and obligations as are specifically set forth in this
         Agreement, no implied covenants or obligations shall be read into this
         Agreement against the Trustee and, in the absence of bad faith on the
         part of the Trustee, the Trustee may conclusively rely, as to the truth
         of the statements and the correctness of the opinions expressed
         therein, upon any certificates or opinions furnished to the Trustee
         that conform to the requirements of this Agreement;

                  (ii) The Trustee shall not be personally liable for an error
         of judgment made in good faith by a Responsible Officer or Responsible
         Officers of the Trustee unless it shall be proved that the Trustee was
         negligent in ascertaining the pertinent facts; and

                  (iii) The Trustee shall not be personally liable with respect
         to any action taken, suffered or omitted to be taken by it in good
         faith in accordance with the direction of the NIMS Insurer or the
         Holders of Certificates entitled to at least 25% of the Voting Rights
         relating 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 it, under this Agreement.

                  The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require it
to perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer in accordance with
the terms of this Agreement.

                  SECTION 8.02. Certain Matters Affecting the Trustee.

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                  (a)      Except as otherwise provided in Section 8.01:

                  (i) The Trustee may request and rely upon and shall be
         protected in acting or refraining from acting upon any resolution,
         Officers' Certificate, certificate of auditors or any other
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, appraisal, bond or other paper or document reasonably
         believed by it to be genuine and to have been signed or presented by
         the proper party or parties;

                  (ii) The Trustee may consult with counsel and any 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 Opinion of Counsel;

                  (iii) The Trustee shall not be under any 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 at the request, order or direction of any of the
         Certificateholders or the NIMS Insurer, pursuant to the provisions of
         this Agreement, unless such Certificateholders or the NIMS Insurer, as
         applicable, shall have offered to the Trustee security or indemnity
         reasonably satisfactory to it against the costs, expenses and
         liabilities which may be incurred therein or thereby; nothing contained
         herein shall, however, relieve the Trustee of the obligation, upon the
         occurrence of a Master Servicer Event of Default (which has not been
         cured or waived), to exercise such of the rights and powers vested in
         it by this Agreement, and to use the same degree of care and skill in
         their exercise as a prudent person would exercise or use under the
         circumstances in the conduct of such person's own affairs;

                  (iv) The Trustee shall not be personally liable for any action
         taken, suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Agreement;

                  (v) Prior to the occurrence of a Master Servicer Event of
         Default hereunder and after the curing of all Master Servicer Events of
         Default which may have occurred, the Trustee shall not be bound to make
         any investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, approval, bond or other paper or document, unless
         requested in writing to do so by the NIMS Insurer or the Holders of
         Certificates entitled to at least 25% of the Voting Rights; 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 such Certificateholders, the
         Trustee may require reasonable indemnity against such expense, or
         liability from such Certificateholders or the NIMS Insurer as a
         condition to taking any such action;

                  (vi) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys; and

                  (vii) The Trustee shall not be personally liable for any loss
         resulting from the investment of funds held in the Collection Account,
         the Escrow Account or the REO Account made at the direction of the
         Master Servicer pursuant to Section 3.06.

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<PAGE>

                  (b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in the name of the Trustee for the
benefit of all the Holders of such Certificates, subject to the provisions of
this Agreement.

                  (c) The Trustee is hereby directed by the Depositor to execute
and deliver the Cap Contract on behalf of the Trust Fund in the respective form
presented to it by the Depositor. Every provision of this Agreement relating to
the conduct or affecting the liability of or affording protection to the Trustee
shall apply to the Trustee's execution of the Cap Contract, and the performance
of its duties and satisfaction of its obligations thereunder.

                  SECTION 8.03. The Trustee Not Liable for Certificates or
                                Mortgage Loans.

                  The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Certificate
Registrar on the Certificates, the acknowledgments of the Trustee contained in
Article II and the representations and warranties of the Trustee in Section
8.13) shall be taken as the statements of the Depositor and the Trustee assumes
no responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth with respect to such party in Section 8.13) or of the
Certificates (other than the signature of the Trustee and authentication of the
Certificate Registrar on the Certificates) or of any Mortgage Loan or related
document. The Trustee shall not be accountable for the use or application by the
Depositor of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Depositor or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Collection Account by the Master Servicer, other than, subject to Section 8.01,
any funds held by or on behalf of the Trustee in accordance with Section 3.04.

                  SECTION 8.04. Trustee May Own Certificates.

                  The Trustee in its individual capacity or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.

                  SECTION 8.05. Trustee's Fees and Expenses.

                  (a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee and, to the extent
that the funds therein are at any time insufficient for such purpose, the
Depositor shall pay such fees. The Trustee, or any director, officer, employee
or agent of the Trustee shall be indemnified by REMIC I and held harmless
against any loss, liability or expense (not including expenses, disbursements
and advances incurred or made by the Trustee including the compensation and the
expenses and disbursements of its agents and counsel, in the ordinary course of
the Trustee's performance in accordance with the provisions of this Agreement)
incurred by the Trustee in connection with any claim or legal action or any
pending or threatened claim or legal action arising out of or in connection with
the acceptance or administration of its obligations and duties under this
Agreement, other than any loss, liability or expense (i) resulting from a breach
of the Master Servicer's obligations and duties under this Agreement and the
Mortgage Loans (for which the Master Servicer shall indemnify pursuant to

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<PAGE>

Section 8.05(b)), (ii) that constitutes a specific liability of the Trustee
pursuant to Section 10.01(c) or (iii) any loss, liability or expense incurred by
reason of its willful misfeasance, bad faith or negligence in the performance of
its duties hereunder or by reason of reckless disregard of its obligations and
duties hereunder or as a result of a breach of its obligations under Article X
hereof. Any amounts payable to the Trustee, or any director, officer, employee
or agent of the Trustee in respect of the indemnification provided by this
paragraph (a), or pursuant to any other right of reimbursement from the Trust
Fund that the Trustee, or any director, officer, employee or agent of the
Trustee may have hereunder in its capacity as such, may be withdrawn by the
Trustee from the Distribution Account at any time.

                  (b) The Master Servicer agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense resulting from a
breach of the Master Servicer's obligations and duties under this Agreement.
Such indemnity shall survive the termination or discharge of this Agreement and
the resignation or removal of the Trustee. Any payment hereunder made by the
Master Servicer to the Trustee shall be from the Master Servicer's own funds,
without reimbursement from the Trust Fund therefor.

                  (c) The Master Servicer shall pay any annual rating agency
fees of the Rating Agencies for ongoing surveillance from its own funds without
right of reimbursement.

                  SECTION 8.06. Eligibility Requirements for Trustee.

                  The Trustee hereunder shall at all times be a corporation or
an association (other than the Depositor, the Originator, the Master Servicer or
any Affiliate of the foregoing) 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 at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions 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 association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.

                  SECTION 8.07. Resignation and Removal of the Trustee.

                  The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, the NIMS
Insurer, the Master Servicer and the Certificateholders. Upon receiving such
notice of resignation of the Trustee, the Depositor shall promptly appoint a
successor trustee acceptable to the NIMS Insurer by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor trustee. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee and the Master Servicer by the Depositor. If no
successor trustee shall have been so appointed and 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.

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<PAGE>

                  If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor or the NIMS Insurer, or if at any time
the Trustee shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its respective property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its respective property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor or the NIMS Insurer may remove
the Trustee and appoint a successor trustee acceptable to the NIMS Insurer by
written instrument, in duplicate, which instrument shall be delivered to the
Trustee so removed and to the successor trustee. A copy of such instrument shall
be delivered to the Certificateholders and the Master Servicer by the Depositor.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights (or the NIMS Insurer upon failure of the Trustee to perform its
obligations hereunder) may at any time remove the Trustee and appoint a
successor trustee acceptable to the NIMS Insurer by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Depositor, one complete set to the Trustee so removed and one complete set to
the successor so appointed. A copy of such instrument shall be delivered to the
Certificateholders and the Master Servicer by the Depositor.

                  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

                  SECTION 8.08. Successor Trustee.

                  Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor, the NIMS Insurer 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 the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements, as well as all
moneys, held by it hereunder (other than any Mortgage Files at the time held by
a Custodian, which Custodian shall become the agent of any successor trustee
hereunder), and the Depositor and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.

                  No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.

                  Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Depositor fails to mail such

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<PAGE>

notice within 10 days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Depositor.

                  SECTION 8.09. Merger or Consolidation of Trustee.

                  Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of REMIC I or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee and the NIMS Insurer to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of REMIC I, and to vest in such Person or Persons, in such capacity, such title
to REMIC I, or any part thereof, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be subject to the written approval of the
Master Servicer and the NIMS Insurer. If the Master Servicer and the NIMS
Insurer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Master Servicer Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title to
REMIC I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment,

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<PAGE>

either jointly with the Trustee or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Every such instrument shall be
filed with the Trustee and a copy thereof given to the Depositor, the Master
Servicer and the NIMS Insurer.

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

                  SECTION 8.11. Appointment of Custodians.

                  The Trustee may, with the consent of the Depositor and the
Master Servicer appoint one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a Custodial Agreement.
The appointment of any Custodian may at any time be terminated and a substitute
Custodian appointed therefor upon the reasonable request of the Master Servicer
to the Trustee, the consent to which shall not be unreasonably withheld. The
Trustee shall pay any and all fees and expenses of any Custodian in accordance
with each Custodial Agreement (provided that if expenses of the kind that would
be reimbursable to the Trustee pursuant to Section 8.05 if incurred by the
Trustee are incurred by the Custodian, the Trustee shall be entitled to
reimbursement under Section 8.05 for such kind of expenses to the extent the
Trustee has paid such expenses on behalf of the Custodian or for which the
Trustee has reimbursed the Custodian). The Trustee initially appoints the
Custodian as Custodian, and the Depositor and the Master Servicer consent to
such appointment. Subject to Article VIII hereof, the Trustee agrees to comply
with the terms of each Custodial Agreement and to enforce the terms and
provisions thereof against the Custodian for the benefit of the
Certificateholders having an interest in any Mortgage File held by such
Custodian. Each Custodian shall be a depository institution or trust company
subject to supervision by federal or state authority, shall have combined
capital and surplus of at least $10,000,000 and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File. Each Custodial
Agreement may be amended only as provided in Section 11.01. In no event shall
the appointment of any Custodian pursuant to a Custodial Agreement diminish the
obligations of the Trustee hereunder.

                  SECTION 8.12. Appointment of Office or Agency.

                  The Trustee will designate an office or agency in the City of
New York where the Certificates may be surrendered for registration of transfer
or exchange, and presented for final distribution, and where notices and demands
to or upon the Trustee in respect of the Certificates and this Agreement may be
delivered. As of the Closing Date, the Trustee designates the office of its
agent located c/o DTC Transfer Agent Services, 55 Water Street, Jeanette Park
Entrance, New York, NY 10041 for such purposes.

                                      -137-

<PAGE>

                  SECTION 8.13. Representations and Warranties of the Trustee.

                  The Trustee hereby represents and warrants, to the Master
Servicer and the Depositor, as of the Closing Date, that:

                  (i) It is a national banking association duly organized,
         validly existing and in good standing under the laws of the United
         States.

                  (ii) The execution and delivery of this Agreement by it, and
         the performance and compliance with the terms of this Agreement by it,
         will not violate its charter or bylaws or constitute a default (or an
         event which, with notice or lapse of time, or both, would constitute a
         default) under, or result in the breach of, any material agreement or
         other instrument to which it is a party or which is applicable to it or
         any of its assets.

                  (iii) It has the full power and authority to enter into and
         consummate all transactions contemplated by this Agreement, has duly
         authorized the execution, delivery and performance of this Agreement,
         and has duly executed and delivered this Agreement.

                  (iv) This Agreement, assuming due authorization, execution and
         delivery by the other parties hereto, constitutes a valid, legal and
         binding obligation of it, enforceable against it in accordance with the
         terms hereof, subject to (A) applicable bankruptcy, insolvency,
         receivership, reorganization, moratorium and other laws affecting the
         enforcement of creditors' rights generally, and (B) general principles
         of equity, regardless of whether such enforcement is considered in a
         proceeding in equity or at law.

                  (v) It is not in violation of, and its execution and delivery
         of this Agreement and its performance and compliance with the terms of
         this Agreement will not constitute a violation of, any law, any order
         or decree of any court or arbiter, or any order, regulation or demand
         of any federal, state or local governmental or regulatory authority,
         which violation, in its good faith and reasonable judgment, is likely
         to affect materially and adversely either the ability of it to perform
         its obligations under this Agreement or its financial condition.

                  (vi) No litigation is pending or, to the best knowledge,
         threatened against it which would prohibit it from entering into this
         Agreement or, in its good faith reasonable judgment, is likely to
         materially and adversely affect either its ability to perform its
         obligations under this Agreement or its financial condition.

                                   ARTICLE IX

                                   TERMINATION

                  SECTION 9.01  Termination Upon Repurchase or Liquidation of
                                All Mortgage Loans.

                  (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for

                                      -138-

<PAGE>

and the Trustee to make payments in respect of the REMIC I Regular Interests,
the REMIC II Regular Interests or the Classes of Certificates as hereinafter set
forth) shall terminate upon payment to the Certificateholders and the deposit of
all amounts held by or on behalf of the Trustee and required hereunder to be so
paid or deposited on the Distribution Date coinciding with or following the
earlier to occur of (i) the purchase by the Terminator (as defined below) of all
Mortgage Loans and each REO Property remaining in REMIC I and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC I; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof. The purchase by the Terminator of all Mortgage Loans
and each REO Property remaining in REMIC I shall be at a price (the "Termination
Price") equal to greater of (A) the aggregate fair market value of all of the
assets of REMIC I and (B) the sum of the Stated Principal Balance of the
Mortgage Loans (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and the appraised fair market value of the REO Properties plus accrued
interest through the end of the calendar month preceding the month of the final
Distribution Date (in the case of fair market values required to be determined
under (A) or (B) above, as determined by the Terminator, the Trustee and, if the
Terminator is not the NIMS Insurer, the NIMS Insurer, as of the close of
business on the third Business Day next preceding the date upon which notice of
any such termination is furnished to Certificateholders pursuant to the third
paragraph of this Section 9.01); provided, however, such option may only be
exercised if the Termination Price is sufficient to pay all interest accrued on,
as well as amounts necessary to retire the note balance of, each class of notes
issued pursuant to the Indenture and any amounts owed to the NIMS Insurer at the
time the option is exercised.

                  (b) The majority Holder of the Class CE Certificates (so long
as such holder is not an affiliate of the Originator), or if such Holder fails
to exercise such right, the Master Servicer, upon 30 days written notice to the
majority Holder of the Class CE Certificates, or if the Master Servicer fails to
exercise such right, the NIMS Insurer, shall have the right (the party
exercising such right, the "Terminator"), to purchase all of the Mortgage Loans
and each REO Property remaining in REMIC I pursuant to clause (i) of the
preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates will be
retired; provided, however, that the Terminator may elect to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC I pursuant to clause (i)
above only (A) if the aggregate Stated Principal Balance of the Mortgage Loans
and each REO Property remaining in the Trust Fund at the time of such election
is less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date and (B) if the Terminator is the Master Servicer and is
an affiliate of the Originator, the Master Servicer shall have delivered to the
Trustee and the NIMS Insurer a written certification that the burdens of
servicing the Mortgage Loans and REO Properties remaining in REMIC I exceed the
benefits of the Servicing Fees that would be realized by the Master Servicer if
it continued to service such assets on behalf of the Trust Fund. By acceptance
of the Residual Certificates, the Holders of the Residual Certificates agree, in
connection with any termination hereunder, to assign and transfer any amounts in
excess of par, and to the extent received in respect of such termination, to pay
any such amounts to the Holders of the Class CE Certificates.

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                  (c) Notice of the liquidation of the REMIC I Regular Interests
shall be given promptly by the Trustee by letter to Certificateholders mailed
(a) in the event such notice is given in connection with the purchase of the
Mortgage Loans and each REO Property by the Terminator, not earlier than the
15th day and not later than the 25th day of the month next preceding the month
of the final distribution on the Certificates or (b) otherwise during the month
of such final distribution on or before the Determination Date in such month, in
each case specifying (i) the Distribution Date upon which the Trust Fund will
terminate and final payment in respect of the REMIC I Regular Interests, the
REMIC II Regular Interests and the Certificates will be made upon presentation
and surrender of the related Certificates at the office of the Trustee therein
designated, (ii) the amount of any such final payment, (iii) that no interest
shall accrue in respect of the REMIC I Regular Interests, the REMIC II Regular
Interests or the Certificates from and after the Interest Accrual Period
relating to the final Distribution Date therefor and (iv) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Trustee. The Trustee shall give such notice to the Certificate Registrar at
the time such notice is given to Certificateholders. In the event such notice is
given in connection with the purchase of all of the Mortgage Loans and each REO
Property remaining in REMIC I by the Terminator, the Terminator shall deliver to
the Trustee for deposit in the Distribution Account not later than the last
Business Day preceding the final Distribution Date on the Certificates an amount
in immediately available funds equal to the above-described purchase price. Upon
certification to the Trustee by a Servicing Officer of the making of such final
deposit, the Trustee shall promptly release or cause to be released to the
Terminator the Mortgage Files for the remaining Mortgage Loans, and the Trustee
shall execute all assignments, endorsements and other instruments necessary to
effectuate such transfer.

                  (d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 9.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining related
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the trust funds.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trustee shall pay to Countrywide
Securities Corporation all such amounts, and all rights of non-tendering
Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Trustee as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section 9.01.

                                      -140-

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                  Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the Trust Fund shall terminate.

                  SECTION 9.02 Additional Termination Requirements.

                  (a) In the event that the Terminator purchases all the
Mortgage Loans and each REO Property or the final payment on or other
liquidation of the last Mortgage Loan or REO Property remaining in REMIC I
pursuant to Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements:

                  (i) The Trustee shall specify the first day in the 90-day
         liquidation period in a statement attached to each Trust REMIC's final
         Tax Return pursuant to Treasury regulation Section 1.860F-1 and shall
         satisfy all requirements of a qualified liquidation under Section 860F
         of the Code and any regulations thereunder, as evidenced by an Opinion
         of Counsel obtained at the expense of the Terminator;

                  (ii) During such 90-day liquidation period, and at or prior to
         the time of making of the final payment on the Certificates, the
         Trustee shall sell all of the assets of REMIC I to the Terminator for
         cash; and

                  (iii) At the time of the making of the final payment on the
         Certificates, the Trustee shall distribute or credit, or cause to be
         distributed or credited, to the Holders of the Residual Certificates
         all cash on hand in the Trust Fund (other than cash retained to meet
         claims), and the Trust Fund shall terminate at that time.

                  (b) At the expense of the applicable Terminator (or in the
event of termination under Section 9.01(a)(ii), at the expense of the Trustee),
the Trustee shall prepare or cause to be prepared the documentation required in
connection with the adoption of a plan of liquidation of each Trust REMIC
pursuant to this Section 9.02.

                  (c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for each Trust REMIC which authorization shall be binding upon all successor
Certificateholders.

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<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

                  SECTION 10.01. REMIC Administration.

                  (a) The Trustee shall elect to treat each Trust REMIC as a
REMIC under the Code and, if necessary, under applicable state law. Each such
election will be made by the Trustee on Form 1066 or other appropriate federal
tax or information return or any appropriate state return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued. For the purposes of the REMIC election in respect of REMIC I, the REMIC
I Regular Interests shall be designated as the Regular Interests in REMIC I and
the Class R-I Interest shall be designated as the Residual Interest in REMIC I.
The Class A Certificates, the Class M-1 Certificates, the Class M-2 Interest,
the Class M-3 Interest, the Class M-4 Interest, the Class M-5 Interest, the
Class CE Interest and the Class P Interest shall be designated as the Regular
Interests in REMIC II and the Class R-II Interest shall be designated as the
Residual Interest in REMIC II. The Class M-2 Certificates shall be designated as
the Regular Interests in REMIC III and the Class R-III Interest shall be
designated as the Residual Interest in REMIC III. The Class M-3 Certificates
shall be designated as the Regular Interests in REMIC VI and the Class R-VI
Interest shall be designated as the Residual Interest in REMIC VI. The Class M-4
Certificates shall be designated as the Regular Interests in REMIC V and the
Class R-V Interest shall be designated as the Residual Interest in REMIC V. The
Class M-5 Certificates shall be designated as the Regular Interests in REMIC VI
and the Class R-VI Interest shall be designated as the Residual Interest in
REMIC VI. The Class CE Certificates shall be designated as the Regular Interests
in REMIC VII and the Class R-VII Interest shall be designated as the Residual
Interest in REMIC VII. The Class P Certificates shall be designated as the
Regular Interests in REMIC VIII and the Class R-VIII Interest shall be
designated as the Residual Interest in REMIC VIII. The Trustee shall permit the
creation of any "interests" in any Trust REMIC (within the meaning of Section
860G of the Code) other than the REMIC I Regular Interests and the interests
represented by the Certificates.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of each Trust REMIC within the meaning of Section 860G(a)(9) of the Code.

                  (c) The Trustee shall pay out of its own funds, without any
right of reimbursement, any and all expenses relating to any tax audit of the
Trust Fund caused by the Trustee (including, but not limited to, any
professional fees or any administrative or judicial proceedings with respect to
any Trust REMIC that involve the Internal Revenue Service or state tax
authorities), other than the expense of obtaining any tax related Opinion of
Counsel except as specified herein. The Trustee, as agent for each Trust REMIC's
tax matters person, shall (i) act on behalf of the Trust Fund in relation to any
tax matter or controversy involving any Trust REMIC and (ii) represent the Trust
Fund in any administrative or judicial proceeding relating to an examination or
audit by any governmental taxing authority with respect thereto. The holder of
the largest Percentage Interest of each Class of Residual Certificates shall be
designated, in the manner provided under Treasury regulations section
1.860F-4(d) and Treasury regulations section 301.6231(a)(7)-1, as the tax
matters person of the related REMIC created hereunder. By their acceptance
thereof, the holder of the largest Percentage Interest of the Residual
Certificates hereby agrees to irrevocably appoint the

                                      -142-

<PAGE>

Trustee or an Affiliate as its agent to perform all of the duties of the tax
matters person for the Trust Fund.

                  (d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of each Trust REMIC. The expenses of preparing and filing
such returns shall be borne by the Trustee without any right of reimbursement
therefor. The Master Servicer shall provide on a timely basis to the Trustee or
its designee such information with respect to the assets of the Trust Fund as is
in its possession and reasonably required by the Trustee to enable it to perform
its obligations under this Article.

                  (e) The Trustee shall perform on behalf of each Trust REMIC
all reporting and other tax compliance duties that are the responsibility of
such 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, as required by the Code, the REMIC Provisions or other
such compliance guidance, the Trustee shall provide (i) to any Transferor of a
Residual Certificate such information as is necessary for the application of any
tax relating to the transfer of a Residual Certificate to any Person who is not
a Permitted Transferee, (ii) to the Certificateholders such information or
reports as are required by the Code or the REMIC Provisions including reports
relating to interest, original issue discount and market discount or premium
(using the Prepayment Assumption as required) and (iii) to the Internal Revenue
Service the name, title, address and telephone number of the person who will
serve as the representative of each Trust REMIC. The Master Servicer shall
provide on a timely basis to the Trustee such information with respect to the
assets of the Trust Fund, including, without limitation, the Mortgage Loans, as
is in its possession and reasonably required by the Trustee to enable each of
them to perform their respective obligations under this subsection. In addition,
the Depositor shall provide or cause to be provided to the Trustee, within ten
(10) days after the Closing Date, all information or data that the Trustee
reasonably determines to be relevant for tax purposes as to the valuations and
issue prices of the Certificates, including, without limitation, the price,
yield, prepayment assumption and projected cash flow of the Certificates.

                  (f) The Trustee shall take such action and shall cause each
Trust REMIC to take such action as shall be necessary to create or maintain the
status thereof as a REMIC under the REMIC Provisions (and the Master Servicer
shall assist it, to the extent reasonably requested by it). The Trustee shall
not take any action, cause the Trust Fund to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions, if taken
or not taken, as the case may be, could (i) endanger the status of any Trust
REMIC as a REMIC or (ii) result in the imposition of a tax upon the Trust Fund
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Trustee and the NIMS Insurer have received an Opinion of Counsel,
addressed to the Trustee (at the expense of the party seeking to take such
action but in no event at the expense of the Trustee) to the effect that the
contemplated action will not, with respect to any Trust REMIC, endanger such
status or result in the imposition of such a tax, nor shall the Master Servicer
take or fail to take any action (whether or not authorized hereunder) as to
which the Trustee and the NIMS Insurer has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event could
occur with respect to such action. In addition, prior to taking any action with
respect to any Trust REMIC or the respective assets of each, or causing any
Trust REMIC to take any action, which

                                      -143-

<PAGE>

is not contemplated under the terms of this Agreement, the Master Servicer will
consult with the Trustee, the NIMS Insurer or its designee, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to any Trust REMIC, and the Master Servicer shall not take any such
action or cause any Trust REMIC to take any such action as to which the Trustee
or the NIMS Insurer has advised it in writing that an Adverse REMIC Event could
occur. The Trustee or the NIMS Insurer may consult with counsel to make such
written advice, and the cost of same shall be borne by the party seeking to take
the action not permitted by this Agreement, but in no event shall such cost be
an expense of the Trustee. At all times as may be required by the Code, the
Master Servicer (in its capacity as Originator) on behalf of the Trustee will
ensure that substantially all of the assets of any Trust REMIC will consist of
"qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.

                  (g) In the event that any tax is imposed on "prohibited
transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on the "net income from foreclosure property" of such REMIC as defined
in Section 860G(c) of the Code, on any contributions to any such REMIC after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or otherwise (iii) against amounts on deposit in the Distribution Account and
shall be paid by withdrawal therefrom.

                  (h) On or before April 15th of each calendar year, commencing
April 15, 2004, the Trustee shall deliver to the Master Servicer, the NIMS
Insurer and each Rating Agency a Certificate from a Responsible Officer of the
Trustee stating, without regard to any action taken by any party other than the
Trustee, the Trustee's compliance with this Article X.

                  (i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to each Trust REMIC on a calendar year
and on an accrual basis. The Trustee will apply for an Employer Identification
Number for the Trust Fund from the Internal Revenue Service via a Form SS-4 or
such other form as is appropriate.

                  (j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to any Trust REMIC other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the Trust Fund will not cause the related REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding or
subject such REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.

                  (k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which any Trust REMIC will receive a fee or other
compensation for services nor permit any such REMIC to receive any income from
assets other than the Mortgage Pool which are deemed to constitute "qualified
mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.

                                      -144-

<PAGE>

                  SECTION 10.02. Prohibited Transactions and Activities.

                  None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of
REMIC I pursuant to Article IX of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), nor acquire any assets for any Trust REMIC
(other than REO Property acquired in respect of a defaulted Mortgage Loan), nor
sell or dispose of any investments in the Collection Account or the Distribution
Account for gain, nor accept any contributions to any Trust REMIC after the
Closing Date (other than a Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03), unless it has received an Opinion of Counsel,
addressed to the Trustee and the NIMS Insurer (at the expense of the party
seeking to cause such sale, disposition, substitution, acquisition or
contribution but in no event at the expense of the Trustee) that such sale,
disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of any Trust REMIC as a REMIC or (b) cause any Trust REMIC
to be subject to a tax on "prohibited transactions" or "contributions" pursuant
to the REMIC Provisions.

                  SECTION 10.03. Master Servicer and Trustee Indemnification.

                  (a) The Trustee agrees to indemnify the Trust Fund, the NIMS
Insurer, the Depositor and the Master Servicer for any taxes and costs
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Depositor or the Master Servicer, caused solely
by the Trustee's failure to act in accordance with its standard of care set
forth in this Article X or any state, local or franchise taxes imposed upon the
Trust as a result of the location of the Trustee.

                  (b) The Master Servicer agrees to indemnify the Trust Fund,
the NIMS Insurer, the Depositor and the Trustee for any taxes and costs
including, without limitation, any reasonable attorneys' fees imposed on or
incurred by the Trust Fund, the Depositor or the Trustee, as a result of a
breach of the Master Servicer's covenants set forth in Article III or this
Article X or any state, local or franchise taxes imposed upon the Trust as a
result of the location of the Master Servicer or any subservicer.

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<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION 11.01. Amendment.

                  This Agreement or any Custodial Agreement may be amended from
time to time by the Depositor, the Master Servicer, the Trustee and, if
applicable, the Custodian with the consent of the NIMS Insurer and without the
consent of any of the Certificateholders, (i) to cure any ambiguity or defect,
(ii) to correct, modify or supplement any provisions herein (including to give
effect to the expectations of Certificateholders), or in any Custodial
Agreement, or (iii) to make any other provisions with respect to matters or
questions arising under this Agreement or in any Custodial Agreement which shall
not be inconsistent with the provisions of this Agreement or such Custodial
Agreement, provided that such action shall not adversely affect in any material
respect the interests of any Certificateholder, as evidenced by either (i) an
Opinion of Counsel delivered to the Master Servicer and the Trustee to such
effect or (ii) confirmation from the Rating Agencies that such amendment will
not result in the reduction or withdrawal of the rating of any outstanding Class
of Certificates. No amendment shall be deemed to adversely affect in any
material respect the interests of any Certificateholder who shall have consented
thereto, and no Opinion of Counsel shall be required to address the effect of
any such amendment on any such consenting Certificateholder.

                  This Agreement or any Custodial Agreement may also be amended
from time to time by the Depositor, the Master Servicer, the NIMS Insurer and
the Trustee with the consent of the NIMS Insurer and the Holders of Certificates
entitled to at least 66% of the Voting Rights for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or any Custodial Agreement or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of, payments
received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates (as evidenced by either (i) an Opinion of Counsel
delivered to the Trustee or (ii) written notice to the Depositor, the Servicer
and the Trustee from the Rating Agencies that such action will not result in the
reduction or withdrawal of the rating of any outstanding Class of Certificates
with respect to which it is a Rating Agency) in a manner other than as described
in (i), or (iii) modify the consents required by the immediately preceding
clauses (i) and (ii) without the consent of the Holders of all Certificates then
outstanding. Notwithstanding any other provision of this Agreement, for purposes
of the giving or withholding of consents pursuant to this Section 11.01,
Certificates registered in the name of the Depositor or the Master Servicer or
any Affiliate thereof shall be entitled to Voting Rights with respect to matters
affecting such Certificates.

                  Notwithstanding any contrary provision of this Agreement,
neither the Trustee nor the NIMS Insurer shall consent to any amendment to this
Agreement unless it shall have first received an Opinion of Counsel satisfactory
to the NIMS Insurer to the effect that such amendment will not result in the
imposition of any tax on any Trust REMIC pursuant to the REMIC Provisions or
cause any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding.

                                      -146-

<PAGE>

                  Notwithstanding any of the other provisions of this Section
11.01, none of the Depositor, the Master Servicer or the Trustee shall enter
into any amendment of this Agreement that would significantly change the
permitted activities of the Trust Fund without the consent of the NIMS Insurer
and the holders of Certificates that represent more than 50.00% of the aggregate
Certificate Principal Balance of all Certificates.

                  Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.

                  It shall not be necessary for the consent of
Certificateholders under this Section 11.01 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 Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.

                  The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee.

                  The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its respective rights, duties
and immunities under this Agreement or otherwise.

                  SECTION 11.02. Recordation of Agreement; Counterparts.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Trustee accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

                  SECTION 11.03. Limitation on Rights of Certificateholders.

                  The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.

                                      -147-

<PAGE>

                  No Certificateholder shall have any right to vote (except as
expressly provided for herein) 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 any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless (i)
such Holder previously shall have given to the Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and (ii) the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in the name of the Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

                  SECTION 11.04. 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 excluding the choice
of laws provisions therein.

                  SECTION 11.05. Notices.

                  All directions, demands, requests, authorizations and notices
hereunder shall be in writing and shall be deemed to have been duly given when
received if personally delivered at or mailed by first class mail, postage
prepaid, or by express delivery service, facsimile, electronic mail or delivered
in any other manner specified herein, to (a) in the case of the Depositor, 1100
Town & Country Road, Suite 1100, Orange, California 92868, Attention: Capital
Markets (telecopy number (714) 245-0198), or such other address or telecopy
number as may hereafter be furnished to the Master Servicer, the NIMS Insurer
and the Trustee in writing by the Depositor, (b) in the case of the Master
Servicer, 1100 Town & Country Road, 11th Floor, Orange, California 92868,
Attention: General Counsel (telecopy number: (714) 564-9639), or such other
address or telecopy number as may hereafter be furnished to the Trustee, the
NIMS Insurer and the Depositor in writing by the Master Servicer, (c) in the
case of the Trustee, Deutsche Bank National Trust Company, 1761 East St. Andrew
Place, Santa Ana, CA 92705-4934, Attention: Trust Administration-AQ0307
(telecopy

                                      -148-

<PAGE>

number: (714) 247-6009), or such other address or telecopy number as may
hereafter be furnished to the Master Servicer, the NIMS Insurer and the
Depositor in writing by the Trustee and (d) in the case of the NIMS Insurer,
such address furnished to the Depositor, the Master Servicer and the Trustee in
writing by the NIMS Insurer. Any notice required or permitted to be given to a
Certificateholder 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 when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above.

                  SECTION 11.06. 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 11.07. Notice to Rating Agencies and the NIMS Insurer.

                  The Trustee shall use its best efforts promptly to provide
notice to the Rating Agencies and the NIMS Insurer with respect to each of the
following of which it has actual knowledge:

                  1. Any material change or amendment to this Agreement;

                  2. The occurrence of any Master Servicer Event of Default that
         has not been cured or waived;

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

                  4. The repurchase or substitution of Mortgage Loans pursuant
         to or as contemplated by Section 2.03;

                  5. The final payment to the Holders of any Class of
         Certificates;

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

                  7. Any event that would result in the inability of the
         Trustee, were it to succeed as Master Servicer, to make advances
         regarding delinquent Mortgage Loans; and

                  8. The filing of any claim under the Master Servicer's blanket
         bond and errors and omissions insurance policy required by Section 3.09
         or the cancellation or material modification of coverage under any such
         instrument.

                                      -149-

<PAGE>

                  In addition, the Trustee shall promptly furnish to each Rating
Agency and the NIMS Insurer copies of each report to Certificateholders
described in Section 4.02 and the Master Servicer, as required pursuant to
Section 3.19 and Section 3.20, shall promptly furnish to each Rating Agency
copies of the following:

                  1. Each annual statement as to compliance described in Section
         3.19; and

                  2. Each annual independent public accountants' servicing
         report described in Section 3.20.

                  Any such notice pursuant to this Section 11.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Fitch Ratings, 1 State Street Plaza, New York, New York 10004, Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10007 and to
Standard & Poor's, a division of the McGraw-Hill Companies, Inc., 25 Broadway,
New York, New York 10004, or such other addresses as the Rating Agencies may
designate in writing to the parties hereto.

                  SECTION 11.08. Article and Section References.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  SECTION 11.09. Grant of Security Interest.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee be, and be
construed as, a sale of the Mortgage Loans by the Depositor and not a pledge of
the Mortgage Loans by the Depositor to secure a debt or other obligation of the
Depositor or the Originator. However, in the event that, notwithstanding the
aforementioned intent of the parties, the Mortgage Loans are held to be property
of the Depositor or the Originator, then, (a) it is the express intent of the
parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Depositor to the Trustee to secure a debt or other obligation of the Depositor
or the Originator and (b)(1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York; (2) the
conveyance provided for in Section 2.01 hereof shall be deemed to be a grant by
the Originator and the Depositor to the Trustee of a security interest in all of
the Originator's and the Depositor's right, title and interest in and to the
Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account and the
Distribution Account, whether in the form of cash, instruments, securities or
other property; (3) the obligations secured by such security agreement shall be
deemed to be all of the Depositor's obligations under this Agreement, including
the obligation to provide to the Certificateholders the benefits of this
Agreement relating to the Mortgage Loans and the Trust Fund; and (4)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such

                                      -150-

<PAGE>

security interest under applicable law. Accordingly, the Depositor hereby grants
to the Trustee a security interest in the Mortgage Loans and all other property
described in clause (2) of the preceding sentence, for the purpose of securing
to the Trustee the performance by the Depositor of the obliga tions described in
clause (3) of the preceding sentence. Notwithstanding the foregoing, the parties
hereto intend the conveyance pursuant to Section 2.01 and the transfer pursuant
to the Mortgage Loan Purchase Agreement to be a true, absolute and unconditional
sale of the Mortgage Loans and assets constituting the Trust Fund by the
Depositor to the Trustee.

                  SECTION 11.10 Third Party Rights.

                  The NIMS Insurer shall be deemed a third-party beneficiary of
this Agreement to the same extent as if it were a party hereto, and shall have
the right to enforce the provisions of this Agreement.

                  SECTION 11.11 NIMS Insurer's Rights.

                  Notwithstanding anything to the contrary anywhere in this
Agreement, all rights of the NIMS Insurer hereunder (i) shall not be operable
whenever an Insurer Default or an Insurer Insolvency Event and a Backup Insurer
Default (as defined in the Indenture) shall have occurred and be continuing and
(ii) except in the case of any right to indemnification hereunder shall
permanently cease to be operable upon the later to occur of (A) the payment in
full of the NIM Notes as provided in the Indenture and (B) the payment in full
to the NIMS Insurer of any amounts owed to the NIMS Insurer as provided in the
Indenture.

                                      -151-

<PAGE>

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

                                   AMERIQUEST MORTGAGE SECURITIES INC.,
                                   as Depositor

                                   By:     /s/ John P. Grazer
                                           ----------------------------------
                                   Name:   John P. Grazer
                                   Title:  CFO

                                   AMERIQUEST MORTGAGE COMPANY,
                                     as Master Servicer

                                   By:     /s/ John P. Grazer
                                           ----------------------------------
                                   Name:   John P. Grazer
                                   Title:  EVP

                                   DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                   as Trustee

                                   By:     /s/ Valerie Delgado
                                           ----------------------------------
                                   Name:   Valerie Delgado
                                   Title:  Associate

                                   By:     /s/ Ronaldo Reyes
                                           ----------------------------------
                                   Name:   Ronaldo Reyes
                                   Title:  Assistant Vice President

<PAGE>

STATE OF CALIFORNIA        )
                              ) ss.:
COUNTY OF ORANGE           )

                  On the ___ day of July 2003, before me, a notary public in and
for said State, personally appeared ____________, known to me to be an
________________ of Ameriquest Mortgage Securities Inc., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                           _____________________________________
                                                       Notary Public

[Notarial Seal]

                                      -153-

<PAGE>

STATE OF CALIFORNIA        )
                              ) ss.:
COUNTY OF ORANGE           )

                  On the __th day of July 2003, before me, a notary public in
and for said State, personally appeared __________________, known to me to be a
_________________ of Ameriquest Mortgage Company, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                           _____________________________________
                                                       Notary Public

[Notarial Seal]

<PAGE>

STATE OF CALIFORNIA            )
                                    ) ss.:
COUNTY OF                      )

                  On the ___ day of July 2003, before me, a notary public in and
for said State, personally appeared _________________, known to me to be an
____________________ of Deutsche Bank National Trust Company, one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such entity executed the within instrument.

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

                                           _____________________________________
                                                       Notary Public

[Notarial Seal]

<PAGE>

                                   EXHIBIT A-1

                           FORM OF CLASS A CERTIFICATE

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

Series 2003-7, Class A                     Aggregate Certificate Principal
                                           Balance of the Class A Certificates
                                           as of the Issue Date:
Pass-Through Rate: Variable                $[__________].00

Date of Pooling and Servicing Agreement    Denomination:  $_________________
and Cut-off Date: July 1, 2003
                                           Master Servicer:  Ameriquest Mortgage
First Distribution Date: August 25, 2003   Company

No. 1                                      Trustee:  Deutsche Bank National
                                           Trust Company

                                           Issue Date: July 3, 2003

                                           CUSIP: [_________________]

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
         OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
         ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
         HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
         THE DENOMINATION OF THIS CERTIFICATE.

                                      A-1-1

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class A Certificates created pursuant to a Pooling and Servicing Agreement,
dated as specified above (the "Agreement"), among Ameriquest Mortgage Securities
Inc. (hereinafter called the "Depositor," which term includes any successor
entity under the Agreement), the Master Servicer and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                      A-1-2

<PAGE>

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the Formula Rate for such Distribution Date and (y) the Net
WAC Pass-Through Rate for such Distribution Date. For any Distribution Date and
this Certificate, the Formula Rate is the lesser of (i) One-Month LIBOR plus the
Certificate Margin and (ii) the Maximum Cap Rate. The Certificate Margin for
this Certificate is with respect to this Certificate is [___]% in the case of
each Distribution Date through and including the Optional Termination Date, or
[___]% in the case of any Distribution Date thereafter.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset- Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer, the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                                      A-1-3

<PAGE>

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

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-1-4

<PAGE>

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

Dated: July __, 2003

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Trustee

                                            By:____________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Certificate Registrar

                                            By:____________________________
                                                    Authorized Signatory

                                      A-1-5

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -      Custodian
                                                             -------------------
TEN ENT - as tenants by the entireties                       (Cust)      (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                     __________________
          in common                                                 (State)

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                          ______________________________________
                                          Signature by or on behalf of assignor

                                          ______________________________________
                                          Signature Guaranteed

                                      A-1-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________ for the account of ___________________________,
account number______________ or, if mailed by check, to _______________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________
_____________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-1-7

<PAGE>

                               EXHIBIT A-2

                      FORM OF CLASS M-1 CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES TO
         THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
         REFERRED TO HEREIN.

Series 2003-7, Class M-1                   Aggregate Certificate Principal
                                           Balance of the Class M-1 Certificates
                                           as of the Issue Date:
Pass-Through Rate:  Variable               $[__________].00

Date of Pooling and Servicing Agreement    Denomination:  $____________________
and Cut-off Date: July 1, 2003
                                           Master Servicer:  Ameriquest Mortgage
First Distribution Date: August 25, 2003   Company

No. 1                                      Trustee:  Deutsche Bank National
                                           Trust Company

                                           Issue Date: July 3, 2003

                                           CUSIP: [________________]

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
         OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
         ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
         HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
         THE DENOMINATION OF THIS CERTIFICATE.

                                      A-2-1

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-1 Certificates created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the Formula Rate for such

                                      A-2-2

<PAGE>

Distribution Date and (y) the Net WAC Pass-Through Rate for such Distribution
Date. For any Distribution Date and this Certificate, the Formula Rate is the
lesser of (i) One-Month LIBOR plus the Certificate Margin and (ii) the Maximum
Cap Rate. The Certificate Margin for this Certificate is with respect to this
Certificate is [___]% in the case of each Distribution Date through and
including the Optional Termination Date, or [___]% in the case of any
Distribution Date thereafter.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset- Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other

                                      A-2-3

<PAGE>

governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-2-4

<PAGE>

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

Dated: July __, 2003

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Trustee

                                            By:_______________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Certificate Registrar

                                            By:_______________________________
                                                     Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -      Custodian
                                                             -------------------
TEN ENT - as tenants by the entireties                       (Cust)      (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                     __________________
          in common                                                 (State)

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          _____________________________________
                                          Signature Guaranteed

                                      A-2-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________ for the account of ___________________________,
account number______________ or, if mailed by check, to _______________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________
_____________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-2-7

<PAGE>

                                   EXHIBIT A-3

                          FORM OF CLASS M-2 CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND
         THE CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
         POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

Series 2003-7, Class M-2                    Aggregate Certificate Principal
                                            Balance of the  Class M-2
                                            Certificates as of the Issue Date:
Pass-Through Rate:  Variable                $__________________

Date of Pooling and Servicing Agreement     Denomination:  $_________________
and Cut-off Date: July 1, 2003
                                            Master Servicer: Ameriquest Mortgage
First Distribution Date: August 25, 2003    Company

No. 1                                       Trustee:  Deutsche Bank National
                                            Trust Company

                                            Issue Date: July 3, 2003

                                            CUSIP: [_______________]

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
         OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
         ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
         HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
         THE DENOMINATION OF THIS CERTIFICATE.

                                      A-3-1

<PAGE>

                  ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                   AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-2 Certificates created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the Formula Rate for such

                                      A-3-2

<PAGE>

Distribution Date and (y) the Net WAC Pass-Through Rate for such Distribution
Date. For any Distribution Date and this Certificate, the Formula Rate is the
lesser of (i) One-Month LIBOR plus the Certificate Margin and (ii) the Maximum
Cap Rate. The Certificate Margin for this Certificate is with respect to this
Certificate is [___]% in the case of each Distribution Date through and
including the Optional Termination Date, or [___]% in the case of any
Distribution Date thereafter.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset- Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other

                                      A-3-3

<PAGE>

governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-3-4

<PAGE>

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

Dated: July __, 2003

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Certificate Registrar

                                            By:________________________________
                                                     Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -      Custodian
                                                             -------------------
TEN ENT - as tenants by the entireties                       (Cust)      (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                     __________________
          in common                                                 (State)

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

                                      A-3-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________ for the account of ___________________________,
account number______________ or, if mailed by check, to _______________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________
_____________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-3-7

<PAGE>

                                   EXHIBIT A-4

                          FORM OF CLASS M-3 CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES,
         THE CLASS M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO
         THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
         REFERRED TO HEREIN.

Series 2003-7, Class M-3                   Aggregate Certificate Principal
                                           Balance of the Class M-3 Certificates
                                           as of the Issue Date:
Pass-Through Rate:  Variable               $__________________

Date of Pooling and Servicing Agreement    Denomination:  $__________________
and Cut-off Date: July 1, 2003
                                           Master Servicer:  Ameriquest Mortgage
First Distribution Date: August 25, 2003   Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: July 3, 2003

                                           CUSIP: [___________________]

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
         OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
         ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
         HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
         THE DENOMINATION OF THIS CERTIFICATE.

                                      A-5-1

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-3 Certificates created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-3 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the Formula Rate for such

                                      A-5-2

<PAGE>

Distribution Date and (y) the Net WAC Pass-Through Rate for such Distribution
Date. For any Distribution Date and this Certificate, the Formula Rate is the
lesser of (i) One-Month LIBOR plus the Certificate Margin and (ii) the Maximum
Cap Rate. The Certificate Margin for this Certificate is with respect to this
Certificate is [___]% in the case of each Distribution Date through and
including the Optional Termination Date, or [___]% in the case of any
Distribution Date thereafter.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset- Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other

                                      A-5-3

<PAGE>

governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-5-4

<PAGE>

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

Dated: July __, 2003

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Trustee

                                            By:________________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Certificate Registrar

                                            By:_________________________________
                                                     Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -      Custodian
                                                             -------------------
TEN ENT - as tenants by the entireties                       (Cust)      (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                     __________________
          in common                                                 (State)

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

                                      A-5-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________ for the account of ___________________________,
account number______________ or, if mailed by check, to _______________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________
_____________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-5-7

<PAGE>

                                   EXHIBIT A-5

                          FORM OF CLASS M-4 CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES,
         THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE
         CLASS M-3 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING
         AND SERVICING AGREEMENT REFERRED TO HEREIN.

Series 2003-7, Class M-4                   Aggregate Certificate Principal
                                           Balance of the Class M-4 Certificates
                                           as of the Issue Date:
Pass-Through Rate:  Variable               $__________

Date of Pooling and Servicing Agreement    Denomination:  $__________________
and Cut-off Date: July 1, 2003
                                           Master Servicer:  Ameriquest Mortgage
First Distribution Date: August 25, 2003   Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: July 3, 2003

                                           CUSIP: [_________________]

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
         OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
         ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
         HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
         THE DENOMINATION OF THIS CERTIFICATE.

                                      A-5-1

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-4 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-4 Certificates created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-4 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the Formula Rate for such

                                      A-5-2

<PAGE>

Distribution Date and (y) the Net WAC Pass-Through Rate for such Distribution
Date. For any Distribution Date and this Certificate, the Formula Rate is the
lesser of (i) One-Month LIBOR plus the Certificate Margin and (ii) the Maximum
Cap Rate. The Certificate Margin for this Certificate is with respect to this
Certificate is [___]% in the case of each Distribution Date through and
including the Optional Termination Date, or [___]% in the case of any
Distribution Date thereafter.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset- Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other

                                      A-5-3

<PAGE>

governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-5-4

<PAGE>

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

Dated: July __, 2003

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Trustee

                                            By:_____________________________
                                                     Authorized Officer

                  CERTIFICATE OF AUTHENTICATION

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

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Certificate Registrar

                                            By:_____________________________
                                                    Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -      Custodian
                                                             -------------------
TEN ENT - as tenants by the entireties                       (Cust)      (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                     __________________
          in common                                                 (State)

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                         _____________________________________
                                         Signature by or on behalf of assignor

                                         _____________________________________
                                         Signature Guaranteed

                                      A-5-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________ for the account of ___________________________,
account number______________ or, if mailed by check, to _______________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________
_____________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-5-7

<PAGE>

                                   EXHIBIT A-6

                          FORM OF CLASS M-5 CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES,
         THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE
         CLASS M-3 CERTIFICATES AND THE CLASS M-4 CERTIFICATES TO THE
         EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
         REFERRED TO HEREIN.

Series 2003-7, Class M-5                   Aggregate Certificate Principal
                                           Balance of the Class M-5 Certificates
                                           as of the Issue Date:
Pass-Through Rate:  Variable               $__________

Date of Pooling and Servicing Agreement    Denomination:  $__________________
and Cut-off Date: July 1, 2003
                                           Master Servicer:  Ameriquest Mortgage
First Distribution Date: August 25, 2003   Company

No. 1                                      Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: July 3, 2003

                                           CUSIP: [______________________]

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
         OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
         ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
         HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
         THE DENOMINATION OF THIS CERTIFICATE.

                                      A-6-1

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M-5 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class M-5 Certificates created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-5 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  The Pass-Through Rate applicable to the calculation of
interest payable with respect to this Certificate on any Distribution Date shall
be the lesser of (x) the Formula Rate for such

                                      A-6-2

<PAGE>

Distribution Date and (y) the Net WAC Pass-Through Rate for such Distribution
Date. For any Distribution Date and this Certificate, the Formula Rate is the
lesser of (i) One-Month LIBOR plus the Certificate Margin and (ii) the Maximum
Cap Rate. The Certificate Margin for this Certificate is with respect to this
Certificate is [___]% in the case of each Distribution Date through and
including the Optional Termination Date, or [___]% in the case of any
Distribution Date thereafter.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset- Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other

                                      A-6-3

<PAGE>

governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-6-4

<PAGE>

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

Dated: July __, 2003

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Trustee

                                            By:_____________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Certificate Registrar

                                            By:_____________________________
                                                    Authorized Signatory

                                      A-6-5

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -      Custodian
                                                             -------------------
TEN ENT - as tenants by the entireties                       (Cust)      (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                     __________________
          in common                                                 (State)

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          _____________________________________
                                          Signature Guaranteed

                                      A-6-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________ for the account of ___________________________,
account number______________ or, if mailed by check, to _______________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________
_____________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-6-7

<PAGE>

                                   EXHIBIT A-7

                          FORM OF CLASS CE CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND
         THE MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE
         POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
         OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
         REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
         TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
         UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
         TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02
         OF THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
         OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
         EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
         ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE
         WITH THE PROCEDURES DESCRIBED HEREIN.

                                      A-7-1

<PAGE>

Series 2003-7, Class CE                     Aggregate Notional Amount of the
                                            Class CE Certificates as of the
                                            Issue Date:
Date of Pooling and Servicing Agreement     $[________________________]
and Cut-off Date: July 1, 2003
                                            Denomination:  $____________________
First Distribution Date: August 25, 2003
                                            Master Servicer: Ameriquest Mortgage
No. 1                                       Company

                                            TrusteeDeutsche Bank National Trust
                                            Company

                                            Issue Date: July 3, 2003

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
         OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
         ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
         HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
         THE DENOMINATION OF THIS CERTIFICATE.

                                      A-7-2

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that Ameriquest Mortgage Company is the
registered owner of a Percentage Interest (obtained by dividing the denomination
of this Certificate by the aggregate Certificate Principal Balance of the Class
CE Certificates as of the Issue Date) in that certain beneficial ownership
interest evidenced by all the Class CE Certificates created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset- Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the

                                      A-7-3

<PAGE>

"Certificates") and representing a Percentage Interest in the Class of
Certificates specified on the face hereof equal to the denomination specified on
the face hereof divided by the aggregate Certificate Principal Balance of the
Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall

                                      A-7-4

<PAGE>

not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor, the Certificate
Registrar, the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor, the Certificate
Registrar and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

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

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-7-5

<PAGE>

                                      A-7-6

<PAGE>

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

Dated: July __, 2003

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Trustee

                                            By:_____________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Certificate Registrar

                                            By:_____________________________
                                                   Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -      Custodian
                                                             -------------------
TEN ENT - as tenants by the entireties                       (Cust)      (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                     __________________
          in common                                                 (State)

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                        _____________________________________
                                        Signature by or on behalf of assignor

                                        _____________________________________
                                        Signature Guaranteed

                                      A-7-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________ for the account of ___________________________,
account number______________ or, if mailed by check, to _______________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________
_____________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-7-9

<PAGE>

                                   EXHIBIT A-8

                           FORM OF CLASS P CERTIFICATE

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

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
         OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
         REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
         TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
         UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
         TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02
         OF THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
         OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
         EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
         ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE
         WITH THE PROCEDURES DESCRIBED HEREIN.

                                      A-8-1

<PAGE>

Series 2003-7, Class P                     Aggregate Certificate Principal
                                           Balance of the Class P Certificates
                                           as of the Issue Date:
Date of Pooling and Servicing Agreement    $100.00
and Cut-off Date: July 1, 2003
                                           Denomination:  $100.00
First Distribution Date: August 25, 2003
                                           Master Servicer:  Ameriquest Mortgage
No. 1                                      Company

                                           Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: July 3, 2003

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE
         OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
         ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE
         HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS
         THE DENOMINATION OF THIS CERTIFICATE.

                                      A-8-2

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that Ameriquest Mortgage Company is the
registered owner of a Percentage Interest (obtained by dividing the denomination
of this Certificate by the aggregate Certificate Principal Balance of the Class
P Certificates as of the Issue Date) in that certain beneficial ownership
interest evidenced by all the Class P Certificates created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Master Servicer and
the Trustee, a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                      A-8-3

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset- Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face hereof
equal to the denomination specified on the face hereof divided by the aggregate
Certificate Principal Balance of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the

                                      A-8-4

<PAGE>

Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, or the Master Servicer in their
respective capacities as such), together with copies of the written
certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor, the Certificate Registrar or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor, the Certificate Registrar and the Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

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

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                                      A-8-5

<PAGE>

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-8-6

<PAGE>

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

Dated: July __, 2003

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Trustee

                                            By:_____________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Certificate Registrar

                                            By:_____________________________
                                                    Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -      Custodian
                                                             -------------------
TEN ENT - as tenants by the entireties                       (Cust)      (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                     __________________
          in common                                                 (State)

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                          ______________________________________
                                          Signature by or on behalf of assignor

                                          ______________________________________
                                          Signature Guaranteed

                                      A-8-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________ for the account of ___________________________,
account number______________ or, if mailed by check, to _______________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________
_____________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-8-9

<PAGE>

                                   EXHIBIT A-9

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
         PERSON.

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

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
         OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
         REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
         TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
         UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
         TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02
         OF THE AGREEMENT.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
         MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION
         5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
         OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
         EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
         ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE
         WITH THE PROCEDURES DESCRIBED HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
         MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN
         AFFIDAVIT TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1)
         THE UNITED STATES OR ANY POSSESSION THEREOF, ANY STATE OR
         POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
         INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
         ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
         COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
         EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS
         SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511
         OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION

                                      A-9-1

<PAGE>

         1381(A)(2)(C) OF THE CODE (ANY SUCHPERSON DESCRIBED IN THE
         FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE REFERRED
         TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A
         DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER
         IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH
         TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
         THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
         NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF
         ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO
         A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
         ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO
         LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
         DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
         INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON
         THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
         HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF
         THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(D) OF THE
         POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON
         THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM
         ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

Series 2003-7, Class R                     Aggregate Percentage Interest of the
                                           Class R Certificates as of the Issue
                                           Date: 100.00% Percentage Interest
Date of Pooling and Servicing Agreement
and Cut-off Date: July 1, 2003             Denomination: 100% Percentage
                                           Interest
First Distribution Date: August 25, 2003
                                           Master Servicer: Ameriquest Mortgage
No. 1                                      Company

                                           Trustee: Deutsche Bank National Trust
                                           Company

                                           Issue Date: July 3, 2003

                                      A-9-2

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that Ameriquest Mortgage Company is the
registered owner of a Percentage Interest specified above in that certain
beneficial ownership interest evidenced by all the Class R Certificates created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Ameriquest Mortgage Securities Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset- Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the face

                                      A-9-3

<PAGE>

hereof equal to the denomination specified on the face hereof divided by the
aggregate Certificate Principal Balance of the Class of Certificates specified
on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their

                                      A-9-4

<PAGE>

respective capacities as such), together with copies of the written
certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor, the Certificate Registrar or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor, the Certificate Registrar and the Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

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

                                      A-9-5

<PAGE>

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                      A-9-6

<PAGE>

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

Dated: July __, 2003

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Trustee

                                            By:______________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Certificate Registrar

                                            By:______________________________
                                                    Authorized Signatory

                                      A-9-7

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -      Custodian
                                                             -------------------
TEN ENT - as tenants by the entireties                       (Cust)      (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                     __________________
          in common                                                 (State)

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                          ______________________________________
                                          Signature by or on behalf of assignor

                                          ______________________________________
                                          Signature Guaranteed

                                      A-9-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________ for the account of ___________________________,
account number______________ or, if mailed by check, to _______________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________
_____________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-9-9

<PAGE>

                                  EXHIBIT A-10

                          FORM OF CLASS R-X CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
         PERSON.

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

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
         OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
         REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR
         TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
         UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
         TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02
         OF THE AGREEMENT.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
         MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION
         5.02 OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
         OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
         EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
         ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE
         WITH THE PROCEDURES DESCRIBED HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
         MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN
         AFFIDAVIT TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1)
         THE UNITED STATES OR ANY POSSESSION THEREOF, ANY STATE OR
         POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
         INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
         ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
         COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS
         EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS
         SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511
         OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION

                                       B-1

<PAGE>

         1381(A)(2)(C) OF THE CODE (ANY SUCHPERSON DESCRIBED IN THE
         FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE REFERRED
         TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A
         DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER
         IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH
         TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
         THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
         NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF
         ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO
         A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
         ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO
         LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
         DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
         INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON
         THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
         HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF
         THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(D) OF THE
         POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON
         THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM
         ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

Series 2003-7, Class R-X                  Aggregate Percentage Interest of the
                                          Class R-X Certificates as of the
Date of Pooling and Servicing Agreement   Issue Date: 100.00% Percentage
and Cut-off Date: July 1, 2003            Interest

                                          Denomination: 100% Percentage Interest
First Distribution Date: August 25, 2003
                                          Master Servicer: Ameriquest Mortgage
No. 1                                     Company

                                          Trustee: Deutsche Bank National Trust
                                          Company

                                          Issue Date: July 3, 2003

                                       B-2

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
         INTEREST IN AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER
         SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
         NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE
         GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
         STATES.

                  This certifies that Ameriquest Mortgage Company is the
registered owner of a Percentage Interest specified above in that certain
beneficial ownership interest evidenced by all the Class R-X Certificates
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among Ameriquest Mortgage Securities Inc. (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
the Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R-X Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Asset- Backed Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates specified on the

                                       B-3

<PAGE>

face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in

                                       B-4

<PAGE>

their respective capacities as such), together with copies of the written
certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor, the Certificate Registrar or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor, the Certificate Registrar and the Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R-X Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R-X Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

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

                                       B-5

<PAGE>

                  The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan remaining in
REMIC I, and (ii) the purchase by the party designated in the Agreement at a
price determined as provided in the Agreement from REMIC I of all the Mortgage
Loans and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor and the Trustee does not assume any responsibility for their
correctness.

                  Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.

                                       B-6

<PAGE>

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

Dated: July __, 2003

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Trustee

                                            By:_____________________________
                                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                            DEUTSCHE BANK NATIONAL TRUST COMPANY
                                            as Certificate Registrar

                                            By:_____________________________
                                                    Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

                  The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -      Custodian
                                                             -------------------
TEN ENT - as tenants by the entireties                       (Cust)      (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                     __________________
          in common                                                 (State)

    Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

                  I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                          ______________________________________
                                          Signature by or on behalf of assignor

                                          ______________________________________
                                          Signature Guaranteed

                                       B-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

                  Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
________________________________ for the account of ___________________________,
account number______________ or, if mailed by check, to _______________________
______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________
______________________________________________________________________________
_____________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or ____________________________________, as its agent.

                                       B-9

<PAGE>

                                    EXHIBIT B

                           FORM OF LOST NOTE AFFIDAVIT

Loan #: ____________
Borrower: _____________

                               LOST NOTE AFFIDAVIT

                  I, as ____________________ of ______________________, a
_______________ corporation am authorized to make this Affidavit on behalf of
_____________________ (the "Seller"). In connection with the administration of
the Mortgage Loans held by ____________________, a _________________ corporation
as Seller on behalf of Ameriquest Mortgage Securities Inc. (the "Purchaser"),
_____________________ (the "Deponent"), being duly sworn, deposes and says that:

         1.       The Seller's address is:           _____________________
                                                     _____________________
                                                     _____________________

         2.       The Seller previously delivered to the Purchaser a signed
                  Initial Certification with respect to such Mortgage and/or
                  Assignment of Mortgage;

         3.       Such Mortgage Note and/or Assignment of Mortgage was assigned
                  or sold to the Purchaser by ________________________, a
                  ____________ corporation pursuant to the terms and provisions
                  of a Mortgage Loan Purchase Agreement dated as of __________
                  __, _____;

         4.       Such Mortgage Note and/or Assignment of Mortgage is not
                  outstanding pursuant to a request for release of Documents;

         5.       Aforesaid Mortgage Note and/or Assignment of Mortgage (the
                  "Original") has been lost;

         6.       Deponent has made or caused to be made a diligent search for
                  the Original and has been unable to find or recover same;

         7.       The Seller was the Seller of the Original at the time of the
                  loss; and

         8.       Deponent agrees that, if said Original should ever come into
                  Seller's possession, custody or power, Seller will immediately
                  and without consideration surrender the Original to the
                  Purchaser.

         9.       Attached hereto is a true and correct copy of (i) the Note,
                  endorsed in blank by the Mortgagee and (ii) the Mortgage or
                  Deed of Trust (strike one) which

                                       B-1

<PAGE>

                  secures the Note, which Mortgage or Deed of Trust is recorded
                  in the county where the property is located.

         10.      Deponent hereby agrees that the Seller (a) shall indemnify and
                  hold harmless the Purchaser, its successors and assigns,
                  against any loss, liability or damage, including reasonable
                  attorney's fees, resulting from the unavailability of any
                  Notes, including but not limited to any loss, liability or
                  damage arising from (i) any false statement contained in this
                  Affidavit, (ii) any claim of any party that has already
                  purchased a mortgage loan evidenced by the Lost Note or any
                  interest in such mortgage loan, (iii) any claim of any
                  borrower with respect to the existence of terms of a mortgage
                  loan evidenced by the Lost Note on the related property to the
                  fact that the mortgage loan is not evidenced by an original
                  note and (iv) the issuance of a new instrument in lieu thereof
                  (items (i) through (iv) above hereinafter referred to as the
                  "Losses") and (b) if required by any Rating Agency in
                  connection with placing such Lost Note into a Pass-Through
                  Transfer, shall obtain a surety from an insurer acceptable to
                  the applicable Rating Agency to cover any Losses with respect
                  to such Lost Note.

         11.      This Affidavit is intended to be relied upon by the Purchaser,
                  its successors and assigns. _____________________, a
                  ______________ corporation represents and warrants that it has
                  the authority to perform its obligations under this Affidavit
                  of Lost Note.

Executed this ____ day, of ___________ ______.

                                                 SELLER

                                                 By:______________________
                                                 Name:
                                                 Title:

                  On this _____ day of ________, _____, before me appeared
_________________ to me personally known, who being duly sworn did say that he
is the _____________________ of ____________________ a ______________
corporation and that said Affidavit of Lost Note was signed and sealed on behalf
of such corporation and said acknowledged this instrument to be the free act and
deed of said corporation.

                                          Signature:

                                          [Seal]

                                       B-2

<PAGE>

                                   EXHIBIT C-1

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                       [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

     Re:  Pooling and Servicing Agreement, dated as of July 1, 2003,
          among Ameriquest Mortgage Securities Inc., Ameriquest Mortgage
          Company and Deutsche Bank National Trust Company, Asset-Backed
          Pass-Through Certificates, Series 2003-7
          --------------------------------------------------------------

Ladies and Gentlemen:

          Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated
as of July 1, 2003, among Ameriquest Mortgage Securities Inc. as Depositor,
Ameriquest Mortgage Company, as master servicer and Deutsche Bank National Trust
Company as trustee, we hereby acknowledge that as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents constituting part of
such Mortgage File (other than such documents described in Section 2.01(v))
required to be delivered to it pursuant to this Agreement are in its possession,
(ii) such documents have been reviewed by it or such Custodian and are not
mutilated, torn or defaced unless initialed by the related borrower and relate
to such Mortgage Loan, (iii) based on its or the Custodian's examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule that corresponds to items (1) through (3), (6), (9), (10), (13), (15)
and (19) of the definition of "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File.

          The Trustee was under no duty or obligation (i) to inspect, review or
examine any such documents, instruments, certificates or other papers to
determine whether they are genuine, enforceable, or appropriate for the
represented purpose or whether they have actually been recorded or that they are
other than what they purport to be on their face or (ii) to determine whether
any Mortgage File should include any of the documents specified in clause (v) of
Section 2.01.

                                      C-1-1

          <PAGE>

          Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement.

                                             DEUTSCHE BANK NATIONAL TRUST
                                             COMPANY, as Trustee

                                             By:______________________________
                                             Name:
                                             Title:

                                      C-1-1

<PAGE>

                                   EXHIBIT C-2

                      FORM OF TRUSTEE'S FINAL CERTIFICATION

                                                     [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

     Re:  Pooling and Servicing Agreement, dated as of July 1, 2003,
          among Ameriquest Mortgage Securities Inc., Ameriquest Mortgage
          Company and Deutsche Bank National Trust Company, Asset-Backed
          Mortgage Pass-Through Certificates, Series 2003-7
          --------------------------------------------------------------

Ladies and Gentlemen:

          In accordance with Section 2.02 of the above-captioned Pooling and
Servicing 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 or a Custodian on its
behalf has received each of the documents listed in Section 2.01.

          The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in the Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.

          Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                              DEUTSCHE BANK NATIONAL TRUST
                                              COMPANY, as Trustee

                                              By:______________________________
                                              Name:
                                              Title:

                                      C-2-1

<PAGE>

                                   EXHIBIT C-3

                   FORM OF TRUSTEE'S RECEIPT OF MORTGAGE NOTES

                                                   [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

           Re: Pooling and Servicing Agreement, dated as of July 1,  2003,
           among Ameriquest Mortgage Securities Inc., Ameriquest Mortgage
           Company and Deutsche Bank National Trust Company, Asset-
           Backed Mortgage Pass-Through Certificates, Series 2003-7
           --------------------------------------------------------------

Ladies and Gentlemen:

     Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated as
of July 1, 2003, among Ameriquest Mortgage Securities Inc. as Depositor,
Ameriquest Mortgage Company, as master servicer and Deutsche Bank National Trust
Company as trustee, we hereby acknowledge the receipt of the original Mortgage
Note for each Mortgage Loan with any exceptions thereto listed on Exhibit 1.

     Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement.

                                             DEUTSCHE BANK NATIONAL TRUST
                                             COMPANY, as Trustee

                                             By:______________________________
                                             Name:
                                             Title:

                                      C-3-1

<PAGE>

                                    EXHIBIT D

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                                       D-1

<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated July 3, 2003, between Ameriquest Mortgage Company, a Delaware corporation
(the "Originator") and Ameriquest Mortgage Securities Inc., a Delaware
corporation (the "Purchaser").

                              PRELIMINARY STATEMENT

                  The Originator intends to sell the Mortgage Loans (as
hereinafter defined) to the Purchaser on the terms and subject to the conditions
set forth in this Agreement. The Purchaser shall deposit the Mortgage Loans into
a mortgage pool constituting the Trust Fund. The Trust Fund will be evidenced by
a single series of asset-backed pass-through certificates designated as Series
2003-7 (the "Certificates"). The Certificates will consist of ten classes of
certificates. The Class CE Certificates, the Class P Certificates, the Class R
Certificates and the Class R-X Certificates (collectively, the "Non-Offered
Certificates") will be delivered to the Originator or its designee as partial
consideration for the Mortgage Loans as further described below.

                  The Certificates will be issued pursuant to a Pooling and
Servicing Agreement relating to the Series 2003-7 Certificates, dated as of July
1, 2003 (the "Pooling and Servicing Agreement"), among the Purchaser as
depositor (in such capacity, the "Depositor"), the Originator as master servicer
(in such capacity the "Master Servicer") and Deutsche Bank National Trust
Company as trustee (the "Trustee "). Pursuant to the Pooling and Servicing
Agreement, the Depositor will assign all of its right, title and interest in and
to the Mortgage Loans, together with its rights under this Agreement, to the
Trustee for the benefit of the Certificateholders. Capitalized terms used but
not defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.

                  The parties hereto agree as follows:

                  SECTION 1. AGREEMENT TO PURCHASE. The Originator hereby sells,
and the Purchaser hereby purchases, on or before July 3, 2003 (the "Closing
Date"), certain adjustable-rate and fixed-rate conventional, one- to
four-family, residential mortgage loans (the "Mortgage Loans"), having an
aggregate principal balance as of the close of business on July 1, 2003 (the
"Cut-off Date") of $600,000,760.92, after giving effect to all payments due on
the Mortgage Loans on or before the Cut-off Date (the "Closing Balance"),
whether or not received including the right to any Prepayment Charges collected
after the Cut-off Date from the Mortgagors in connection with any Principal
Prepayments on the Mortgage Loans. Any payments (including Prepayment Charges)
collected on or before the Cut-off Date, including all scheduled payments of
principal and interest due on or before the Cut-off Date and collected after the
Cut-off Date, shall belong to the Originator.

                  SECTION 2. MORTGAGE LOAN SCHEDULE AND PREPAYMENT CHARGE
SCHEDULE. The Purchaser and the Originator have agreed upon which of the
mortgage loans owned by the Originator are to be purchased by the Purchaser
pursuant to this Agreement, and the Originator shall prepare or cause to be
prepared on or prior to the Closing Date a final schedule (the "Closing
Schedule")

<PAGE>

                                       -2-

describing such Mortgage Loans and setting forth all of the Mortgage Loans to be
purchased under this Agreement. The Closing Schedule shall conform to the
requirements set forth in this Agreement and to the definition of "Mortgage Loan
Schedule" under the Pooling and Servicing Agreement. The Closing Schedule shall
be used as the Mortgage Loan Schedule under the Pooling and Servicing Agreement.
The Originator shall also prepare or cause to be prepared on or prior to the
Closing Date a final schedule (the "Prepayment Charge Schedule") setting forth
each Mortgage Loan containing a Prepayment Charge and conforming to the
definition of Prepayment Charge Schedule under the Pooling and Servicing
Agreement.

                  SECTION 3. CONSIDERATION. In consideration for the Mortgage
Loans to be purchased hereunder, the Purchaser shall, as described in Section 8,
(i) pay to or upon the order of the Originator in immediately available funds an
amount equal to the net sale proceeds of the Class A Certificates, the Class M-1
Certificates, the Class M-2 Certificates, the Class M-3 Certificates, the Class
M-4 Certificates and the Class M-5 Certificates and (ii) deliver to the
Originator or its designee, the Non-Offered Certificates.

                  SECTION 4. TRANSFER OF THE MORTGAGE LOANS.

                           (a) POSSESSION OF MORTGAGE FILES. The Originator does
hereby sell to the Purchaser, without recourse but subject to the terms of this
Agreement, all of its right, title and interest in, to and under the Mortgage
Loans, including the related Prepayment Charges collected after the Cut-off
Date. The contents of each Mortgage File not delivered to the Purchaser or to
any assignee, transferee or designee of the Purchaser on or prior to the Closing
Date are and shall be held in trust by the Originator for the benefit of the
Purchaser or any assignee, transferee or designee of the Purchaser. Upon the
sale and contribution of the Mortgage Loans the ownership of each Mortgage Note,
the related Mortgage and the other contents of the related Mortgage File is
vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or that come into the
possession of the Originator on or after the Closing Date shall immediately vest
in the Purchaser and shall be delivered immediately to the Purchaser or as
otherwise directed by the Purchaser.

                           (b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The
Originator will, on or prior to the Closing Date, deliver or cause to be
delivered to the Purchaser or any assignee, transferee or designee of the
Purchaser each of the following documents for each Mortgage Loan:

                  (i) the original Mortgage Note, endorsed in blank without
         recourse or in the following form: "Pay to the order of Deutsche Bank
         National Trust Company, as Trustee under the applicable agreement,
         without recourse," with all prior and intervening endorsements showing
         a complete chain of endorsement from the originator to the Person so
         endorsing to the Trustee, or with respect to any lost Mortgage Note, an
         original Lost Note Affidavit; PROVIDED HOWEVER, that such substitutions
         of Lost Note Affidavits for original Mortgage Notes may occur only with
         respect to Mortgage Loans, the aggregate Cut-off Date

<PAGE>

                                       -3-

         Principal Balance of which is less than or equal to 2.00% of the Pool
         Balance as of the Cut- off Date;

                  (ii) the original Mortgage with evidence of recording thereon,
         and a copy, certified by the appropriate recording office, of the
         recorded power of attorney, if the Mortgage was executed pursuant to a
         power of attorney, with evidence of recording thereon;

                  (iii) an original Assignment of the Mortgage assigned in
         blank, without recourse;

                  (iv) the original recorded intervening Assignment or
         Assignments of the Mortgage showing a complete chain of assignment from
         the originator to the Person assigning the Mortgage to the Trustee as
         contemplated by the immediately preceding clause (iii) or the original
         unrecorded intervening Assignments;

                  (v) the original or copies of each assumption, modification,
         written assurance or substitution agreement, if any; and

                  (vi) the original lender's title insurance policy or an
         attorney's opinion of title or similar, guarantee of title acceptable
         to mortgage lenders generally in the jurisdiction where the Mortgaged
         Property is located, together with all endorsements or riders which
         were issued with or subsequent to the issuance of such policy, insuring
         the priority of the Mortgage as a first lien on the Mortgaged Property
         represented therein as a fee interest vested in the Mortgagor, or in
         the event such original title policy is unavailable, a written
         commitment or uniform binder or preliminary report of title issued by
         the title insurance or escrow company.

                  If any document referred to in Section 4(b)(ii), 4(b)(iii) or
4(b)(iv) above has been submitted for recording but either (x) has not been
returned from the applicable public recording office or (y) has been lost or
such public recording office has retained the original of such document, the
obligations of the Originator hereunder shall be deemed to have been satisfied
upon (1) delivery by or on behalf of the Originator promptly upon receipt
thereof to the Purchaser or any assignee, transferee or designee of the
Purchaser of either the original or a copy of such document certified by the
Originator in the case of (x) above or the public recording office in the case
of (y) above to be a true and complete copy of the recorded original thereof and
(2) if such delivered copy is certified by the Originator then in addition
thereto delivery promptly upon receipt thereof of either the original or a copy
of such document certified by the public recording office to be a true and
complete copy of the original. In the event that the original lender's title
insurance policy has not yet been issued, the Originator shall deliver to the
Purchaser or any assignee, transferee or designee of the Purchaser a written
commitment or interim binder or preliminary report of title issued by the title
insurance or escrow company. Promptly upon receipt by the Originator of any such
original title insurance policy the Originator shall deliver such to the
Purchaser or any assignee, transferee or designee of the Purchaser.

<PAGE>

                                       -4-

                  The Originator shall promptly (and in no event later than
thirty (30) Business Days, subject to extension upon mutual agreement between
the Originator and the Trustee, following the later of (i) the Closing Date,
(ii) the date on which the Originator receives the Assignment from the Trustee
and (iii) the date of receipt by the Originator of the recording information for
a Mortgage) submit or cause to be submitted for recording, at no expense to the
Trust Fund or the Trustee, in the appropriate public office for real property
records, each Assignment referred to in (iii) and (iv) above and shall execute
each original Assignment referred to in (iii) in the following form: "Deutsche
Bank National Trust Company, as Trustee under the applicable agreement without
recourse". In the event that any such Assignment is lost or returned unrecorded
because of a defect therein, the Originator shall promptly prepare or cause to
be prepared a substitute Assignment or cure or cause to be cured such defect, as
the case may be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the Assignments of
Mortgage shall not be required to be submitted for recording (except with
respect to any Mortgage Loan located in Maryland) unless such failure to record
would result in a withdrawal or a downgrading by any Rating Agency of the rating
on any Class of Certificates; provided further, however, each Assignment of
Mortgage shall be submitted for recording by the Originator in the manner
described above, at no expense to the Trust Fund or the Trustee, upon the
earliest to occur of: (i) reasonable direction by Holders of Certificates
entitled to at least 25% of the Voting Rights, (ii) failure of the Master
Servicer Termination Test, (iii) the occurrence of the bankruptcy or insolvency
of the Originator, (iv) the occurrence of a servicing transfer as described in
Section 7.02 of the Pooling and Servicing Agreement, and (v) if the Originator
is not the Master Servicer and with respect to any one assignment or Mortgage,
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage.

                  Each original document relating to a Mortgage Loan which is
not delivered to the Purchaser or its assignee, transferee or designee, if held
by the Originator, shall be so held for the benefit of the Purchaser or its
assignee, transferee or designee.

                           (c) ACCEPTANCE OF MORTGAGE LOANS. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Closing Date (and with respect to each document permitted to be
delivered after the Closing Date within seven days of its delivery) to ascertain
that all required documents have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule.

                           (d) RESERVED.

                           (e) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to effect the purposes of the Pooling and
Servicing Agreement, without the consent of the Originator, and the assignee
shall succeed to the rights and obligations hereunder of the Purchaser. Any
expense

<PAGE>

                                       -5-

reasonably incurred by or on behalf of the Purchaser or the Trustee in
connection with enforcing any obligations of the Originator under this Agreement
will be promptly reimbursed by the Originator.

                           (f) EXAMINATION OF MORTGAGE FILES. Prior to the
Closing Date, the Originator shall either (i) deliver in escrow to the Purchaser
or to any assignee, transferee or designee of the Purchaser, for examination,
the Mortgage File pertaining to each Mortgage Loan or (ii) make such Mortgage
Files available to the Purchaser or to any assignee, transferee or designee of
the Purchaser for examination at the Trustee's offices in Santa Ana, California.
Such examination may be made by the Purchaser, and its respective designees,
upon reasonable notice to the Originator and the Trustee during normal business
hours before the Closing Date and within 60 days after the Closing Date. If any
such person makes such examination prior to the Closing Date and identifies any
Mortgage Loans that do not conform to the requirements of the Purchaser as
described in this Agreement, such Mortgage Loans shall be deleted from the
Closing Schedule. The Purchaser may, at its option and without notice to the
Originator, purchase all or part of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or any person has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the rights of the Purchaser or any assignee,
transferee or designee of the Purchaser to demand repurchase or other relief as
provided herein or under the Pooling and Servicing Agreement.

                  SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                             ORIGINATOR.

                  The Originator hereby represents and warrants to the
Purchaser, as of the date hereof and as of the Closing Date, and covenants,
that:

                  (i) The Originator is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
duly authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by the Originator in any state in which a
Mortgaged Property is located or is otherwise not required under applicable law
to effect such qualification and, in any event, is in compliance with the doing
business laws of any such State, to the extent necessary to ensure its ability
to enforce each Mortgage Loan and to service the Mortgage Loans in accordance
with the terms of the Pooling and Servicing Agreement;

                  (ii) The Originator had the full corporate power and authority
to originate, hold and sell each Mortgage Loan and has the full corporate power
and authority to service each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary corporate action on the part
of the Originator the execution, delivery and performance of this Agreement; and
this Agreement, assuming the due authorization, execution and delivery thereof
by the Purchaser, constitutes a legal, valid and binding obligation of the
Originator, enforceable against the Originator in accordance with its terms,
except to the extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws relating
to creditors' rights generally and

<PAGE>

                                       -6-

(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought;

                  (iii) The execution and delivery of this Agreement by the
Originator, the servicing of the Mortgage Loans by the Originator under the
Pooling and Servicing Agreement, the consummation of any other of the
transactions herein contemplated, and the fulfillment of or compliance with the
terms hereof are in the ordinary course of business of the Originator and will
not (A) result in a breach of any term or provision of the charter or by-laws of
the Originator or (B) conflict with, result in a breach, violation or
acceleration of, or result in a default under, the terms of any other material
agreement or instrument to which the Originator is a party or by which it may be
bound, or any statute, order or regulation applicable to the Originator of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Originator; and the Originator is not a party to, bound
by, or in breach or violation of any indenture or other agreement or instrument,
or subject to or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it, which materially and adversely affects or, to the Originator's
knowledge, would in the future materially and adversely affect, (x) the ability
of the Originator to perform its obligations under this Agreement or (y) the
business, operations, financial condition, properties or assets of the
Originator taken as a whole;

                  (iv) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation of the transactions contemplated hereby, or if any
such consent, approval, authorization or order is required, the Originator has
obtained the same;

                  (v) The Originator is an approved originator/servicer for
Fannie Mae or Freddie Mac in good standing and is a HUD approved mortgagee
pursuant to Section 203 and Section 211 of the National Housing Act; and

                  (vi) Except as otherwise disclosed in the Prospectus
Supplement, no litigation is pending against the Originator that would
materially and adversely affect the execution, delivery or enforceability of
this Agreement or the ability of the Originator to service the Mortgage Loans or
to perform any of its other obligations hereunder in accordance with the terms
hereof.

                  SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
                             RELATING TO THE MORTGAGE LOANS.

                  The Originator hereby represents and warrants to the Purchaser
that as of the Closing Date:

<PAGE>

                                       -7-

                           (i) The information set forth on the Mortgage Loan
Schedule with respect to each Mortgage Loan is true and correct in all material
respects;

                           (ii) [Reserved];

                           (iii) No material error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to a Mortgage Loan has
taken place on the part of any person, including without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the origination of the Mortgage Loan or in the application of any insurance
in relation to such Mortgage Loan;

                           (iv) All payments due prior to the Cut-off Date have
been made and none of the Mortgage Loans will have been contractually delinquent
for more than one calendar month more than once since the origination thereof;

                           (v) Each Mortgage is a valid and enforceable first
lien on the Mortgaged Property, including all improvements thereon, subject only
to (a) the lien of nondelinquent current real property taxes and assessments,
(b) covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan, and (c) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by such Mortgage;

                           (vi) Immediately prior to the sale of the Mortgage
Loans to the Purchaser, the Originator had good title to, and was the sole legal
and beneficial owner of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and has full right and authority, subject to no
interest or participation of, or agreement with, any other party to sell and
assign the same;

                           (vii) There is no delinquent tax or assessment lien
against any Mortgaged Property;

                           (viii) There is no valid offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage Note, nor
will the operation of any of the terms of the Mortgage Note and the Mortgage, or
the exercise of any right thereunder, render the Mortgage unenforceable, in
whole or in part, or subject to any valid right of rescission, set-off,
counterclaim or defense, including the defense of usury and no such valid right
of rescission, set-off, counterclaim or defense has been asserted with respect
thereto;

<PAGE>

                                       -8-

                           (ix) There are no mechanics' liens or claims for
work, labor or material rendered to the Mortgaged Property affecting any
Mortgaged Property which are or may be a lien prior to, or equal with, the lien
of the related Mortgage, except those which are insured against by the title
insurance policy referred to in (xiii) below;

                           (x) Subject to the Escrow Withhold referred to in
(xx) below, each Mortgaged Property is free of material damage and is in good
repair;

                           (xi) Each Mortgage Loan at origination complied in
all material respects with applicable local, state and federal laws, including,
without limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending, disclosure laws and all applicable predatory and
abusive lending laws, and consummation of the transactions contemplated hereby
will not involve the violation of any such laws;

                           (xii) Neither the Originator nor any prior holder of
any Mortgage has modified the Mortgage in any material respect (except that a
Mortgage Loan may have been modified by a written instrument which has been
recorded, if necessary, to protect the interests of the Purchaser and which has
been delivered to the Trustee); satisfied, canceled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property in whole
or in part from the lien of such Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction with respect thereto;

                           (xiii) A lender's policy of title insurance together
with a condominium endorsement, extended coverage endorsement, and an adjustable
rate mortgage endorsement (each as applicable) in an amount at least equal to
the Cut-off Date principal balance of each such Mortgage Loan or a commitment
(binder) to issue the same was effective on the date of the origination of each
Mortgage Loan, each such policy is valid and remains in full force and effect,
the transfer of the related Mortgage Loan to the Purchaser will not affect the
validity or enforceability of such policy and each such policy was issued by a
title insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located and in a form acceptable to Fannie Mae or Freddie Mac, which
policy insures the Originator and successor owners of indebtedness secured by
the insured Mortgage, as to the first priority lien of the Mortgage; no claims
have been made under such lender's title insurance policy and no prior holder of
the related Mortgage, including the Originator, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;

                           (xiv) Each Mortgage Loan was originated by the
Originator (or, if generated on behalf of the Originator by a person other than
the Originator, is subject to the same underwriting standards and procedures
used by the Originator in originating mortgage loans directly) or by a savings
and loan association, savings bank, commercial bank, credit union, insurance
company or similar institution which is supervised and examined by a federal or
state authority (including a

<PAGE>

                                       -9-

mortgage broker), or by a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to Sections 203 and 211 of the National Housing Act;

                           (xv) With respect to each Adjustable-Rate Mortgage
Loan, on each adjustment date, the Mortgage Rate will be adjusted to equal the
Index plus the Gross Margin, rounded to the nearest 0.125%, subject to the
Periodic Rate Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate. The
related Mortgage Note is payable on the first day of each month in
self-amortizing monthly installments of principal and interest, with interest
payable in arrears, and requires a monthly payment which is sufficient to fully
amortize the outstanding principal balance of the Mortgage Loan over its
remaining term and to pay interest at the applicable Mortgage Rate. No Mortgage
Loan is subject to negative amortization;

                           (xvi) All of the improvements which were included for
the purpose of determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of such property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property, except those, if any, which are insured against by the lender's title
insurance policy referred to in (xiii) above.

                           (xvii) All inspections, licenses and certificates
required to be made or issued with respect to all occupied portions of the
Mortgaged Property including but not limited to certificates of occupancy, have
been made or obtained from the appropriate authorities and the Mortgaged
Property is lawfully occupied under applicable law except as may otherwise be
insured against by the lender's title insurance policy referred to in (xiii)
above.

                           (xviii) All parties which have had any interest in
the Mortgage, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located;

                           (xix) The Mortgage Note and the related Mortgage are
genuine, and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms and with applicable laws. All
parties to the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have been
duly and properly executed by such parties;

                           (xx) The proceeds of each Mortgage Loan have been
fully disbursed, there is no requirement for future advances thereunder and any
and all requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied with,
except any Mortgaged Property or Mortgage Loan subject to an Escrow Withhold as
defined in the Originator's underwriting guidelines. All costs, fees and
expenses incurred in making, closing or recording the Mortgage Loans were paid;

<PAGE>

                                      -10-

                           (xxi) The related Mortgage contains customary and
enforceable provisions which render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case of a Mortgage designated as
a deed of trust, by trustee's sale, and (ii) otherwise by judicial foreclosure.
There is no homestead or other exemption available to the Mortgagor which would
materially interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;

                           (xxii) With respect to each Mortgage constituting a
deed of trust, a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;

                           (xxiii) There exist no deficiencies with respect to
escrow deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow deposits or
payments of other charges or payments due the Originator have been capitalized
under the Mortgage or the related Mortgage Note;

                           (xxiv) The origination, collection and servicing
practices used by the Originator with respect to each Mortgage Loan have been in
all material respects legal, proper, reasonable and customary in the subprime
mortgage origination and servicing business;

                           (xxv) There is no pledged account or other security
other than real estate securing the Mortgagor's obligations;

                           (xxvi) No Mortgage Loan has a shared appreciation
feature, or other contingent interest feature;

                           (xxvii) The improvements upon each Mortgaged Property
are covered by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located
representing coverage not less than the lesser of the outstanding principal
balance of the related Mortgage Loan or the minimum amount required to
compensate for damage or loss on a replacement cost basis. All individual
insurance policies and flood policies referred to in clause (xxviii) below
contain a standard mortgagee clause naming the Originator or the original
mortgagee, and its successors in interest, as mortgagee, and the Originator has
received no notice that any premiums due and payable thereon have not been paid;
the Mortgage obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor, except as may be limited or
restricted by applicable law;

<PAGE>

                                      -11-

                           (xxviii) If the Mortgaged Property is in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance Administration is
in effect with respect to such Mortgaged Property with a generally acceptable
carrier in an amount representing coverage not less than the least of (A) the
original outstanding principal balance of the Mortgage Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement cost basis or
(C) the maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973;

                           (xxix) There is no default, breach, violation or
event of acceleration existing under the Mortgage or the related Mortgage Note;
and the Originator has not waived any default, breach, violation or event of
acceleration;

                           (xxx) Each Mortgaged Property is improved by a one-
to four-family residential dwelling, including condominium units and dwelling
units in planned unit developments, which does not include (a) cooperatives or
(b) mobile homes and manufactured homes (as defined in the Fannie Mae
Seller-Servicer's Guide), except when the appraisal indicates that (i) the
mobile or manufactured home was built under the Federal Manufactured Home
Construction and Safety Standards of 1976 or (ii) otherwise assumes the
characteristics of site-built housing and meets local building codes, is readily
marketable, has been permanently affixed to the site, is not in a mobile home
"park," and is treated as real property under the applicable state law. With
respect to any Mortgage Loan that is secured by a leasehold estate, (a) the
lease is valid, in full force and effect; (b) all rents and other payments due
under the lease have been paid; (c) the lessee is not in default under any
provision of the lease; (d) the term of the lease exceeds the maturity date of
the related Mortgage Loan by at least five years and (e) the Mortgagee under the
Mortgage Loan is given notice and an opportunity to cure any defaults under the
lease;

                           (xxxi) There is no obligation on the part of the
Originator or any other party under the terms of the Mortgage or related
Mortgage Note to make payments in lieu of or in addition to those made by the
Mortgagor;

                           (xxxii) Any future advances made prior to the related
Purchase Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the Mortgage
Loan Schedule. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;

                           (xxxiii) Each Mortgage Loan was underwritten in
accordance with the Originator's underwriting guidelines;

                           (xxxiv) The Mortgage File contains an appraisal which
was performed by either (i) an appraiser who satisfied, and which was conducted
in accordance with, all of the

<PAGE>

                                      -12-

applicable requirements of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended or (ii) an insured valuation model;

                           (xxxv) None of the Mortgage Loans is a graduated
payment mortgage loan, nor is any Mortgage Loan subject to a temporary buydown
or similar arrangement;

                           (xxxvi) [reserved];

                           (xxxvii) The Mortgage Loans comply in all material
respects with the description set forth under the heading "The Mortgage Pool" in
the Depositor's Prospectus Supplement, dated the date hereof (the "Prospectus
Supplement");

                           (xxxviii) The Mortgage contains an enforceable
provision for the acceleration of the payment of the unpaid principal balance of
the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee thereunder,
except as may be limited by applicable law;

                           (xxxix) The information set forth in the Prepayment
Charge Schedule is complete, true and correct in all material respects at the
date or dates respecting which such information is furnished and each Prepayment
Charge is permissible and enforceable in accordance with its terms upon the
voluntary prepayment by the Mortgagor and complied in all material respects with
applicable local, state and federal laws (except to the extent that: (1) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally; or
(2) the collectability thereof may be limited due to acceleration in connection
with a foreclosure or other involuntary payoff);

                           (xl) Each Mortgage Loan is an obligation that is
principally secured by real property for purposes of the REMIC Provisions of the
Code;

                           (xli) No Mortgage Loan is a High Cost Loan as defined
by the Home Ownership and Equity Protection Act of 1994 ("HOEPA") or any other
applicable predatory or abusive lending laws and no Mortgage Loan is in
violation of any other applicable predatory or abusive lending laws;

                           (xlii) No proceeds from any Mortgage Loan were used
to finance single- premium credit insurance policies;

                           (xliii) No Mortgage Loan originated before October 1,
2002 will impose a Prepayment Charge for a term in excess of five years and no
Mortgage Loan originated on or after October 1, 2002 will impose a Prepayment
Charge for a term in excess of three years;

<PAGE>

                                      -13-

                           (xliv) No Mortgage Loan that is secured by property
located in the State of Georgia is either a "Covered Loan" or "High Cost Home
Loan" within the meaning of the Georgia Fair Lending Act, as amended (the
"Georgia Act");

                           (xlv) No Mortgagor has currently requested any relief
under the Soldiers' and Sailors' Civil Relief Act of 1940 or similar state laws;

                           (xlvi) The Master Servicer has fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its
Mortgagor credit files to Equifax, Experian and Trans Union Credit Information
Company or their successors (the "Credit Repositories") on a monthly basis;

                           (xlvii) No Mortgage Loan secured by a Mortgaged
Property located in Georgia was originated on or after October 1, 2002 through
and including March 6, 2003;

                           (xlviii) Each Mortgage Loan is in compliance with the
anti-predatory lending eligibility for purchase requirements of Fannie Mae's
Selling Guide;

                           (xlix) No Mortgage Loan is a "High Cost Home Loan" as
defined in New York Banking Law 6-1;

                           (l) The methodology used in underwriting the
extension of credit for each Mortgage Loan employs objective mathematical
principles which relate the Mortgagor's income, assets and liabilities to the
proposed payment and such underwriting methodology does not rely on the extent
of the Mortgagor's equity in the collateral as the principal determining factor
in approving such credit extension. Such underwriting methodology confirmed that
at the time of origination (application/approval) the Mortgagor had a reasonable
ability to make timely payments on the Mortgage Loan;

                           (li) With respect to any Mortgage Loan that contains
a provision permitting imposition of a charge upon a prepayment prior to
maturity: (i) prior to the Mortgage Loan's origination, the Mortgagor agreed to
such charge in exchange for a monetary benefit, including but not limited to a
rate or fee reduction, (ii) prior to the Mortgage Loan's origination, the
Mortgagor was offered the option of obtaining a mortgage loan that did not
require payment of such a charge, (iii) the prepayment charge is disclosed to
the Mortgagor in the loan documents pursuant to applicable state and federal
law, and (iv) notwithstanding any state or federal law to the contrary, the
Master Servicer shall not impose such prepayment charge in any instance when the
mortgage debt is accelerated as the result of the Mortgagor's default in making
the loan payments;

                           (lii) No Mortgagor was required to purchase any
credit life, disability, accident or health insurance product as a condition of
obtaining the extension of credit. No Mortgagor obtained a prepaid single
premium credit life, disability, accident or health insurance

<PAGE>

                                      -14-

policy in connection with the origination of the Mortgage Loan. No proceeds from
any Mortgage Loan were used to purchase single premium credit insurance policies
as part of the origination of, or as a condition to closing, such Mortgage Loan;

                           (liii) All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with applicable
state and federal law and regulation. Except in the case of a Mortgage Loan in
an original principal amount of less than $60,000 which would have resulted in
an unprofitable origination, no Mortgagor was charged "points and fees" (whether
or not financed) in an amount greater than 5% of the principal amount of such
loan and such 5% limitation is calculated in accordance with Fannie Mae's
anti-predatory lending requirements as set forth in the Fannie Mae Selling
Guide;

                           (liv) All fees and charges (including finance
charges) and whether or not financed, assessed, collected or to be collected in
connection with the origination and servicing of each Mortgage Loan has been
disclosed in writing to the Mortgagor in accordance with applicable state and
federal law and regulation; and

                           (lv) The Master Servicer will transmit full-file
credit reporting data for each Mortgage Loan pursuant to Fannie Mae Guide
Announcement 95-19 and that for each Mortgage Loan, the Master Servicer agrees
it shall report one of the following statuses each month as follows: new
origination, current, delinquent (30-, 60-, 90-days, etc.), foreclosed, or
charged-off.

                  SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
                             AND FOR BREACH OF REPRESENTATION AND WARRANTY.

                  (a) The representations and warranties contained in Section 6
shall not be materially impaired by any review and examination of loan files or
other documents evidencing or relating to the Mortgage Loans or any failure on
the part of the Purchaser to review or examine such documents and shall inure to
the benefit of any assignee, transferee or designee of the Purchaser, including
the Trustee for the benefit of the Certificateholders.

                  Upon discovery by the Originator, the Purchaser or any
assignee, transferee or designee of the Purchaser of any materially defective
document in, or that any material document was not transferred by the Originator
(as listed on the Trustee's Preliminary Exception Report), as part of, any
Mortgage File or of a breach of any of the representations and warranties
contained in Section 5 or Section 6 that materially and adversely affects the
value of any Mortgage Loan or the interest therein of the Purchaser or the
Purchaser's assignee, transferee or designee (it being understood that with
respect to the representations and warranties set forth in (xli), (xlii),
(xliii), (xlvi) and (xlvii) of Section 6 herein, a breach of any such
representation or warranty shall in and of itself be deemed to materially
adversely affect the interest therein of the Purchaser and the Purchaser's
assignee, transferee or designee), the party discovering the breach shall give
prompt

<PAGE>

                                      -15-

written notice to the other. Within ninety (90) days of its discovery or its
receipt of notice of any such missing documentation which was not transferred to
the Purchaser as described above or materially defective documentation or any
such breach of a representation and warranty (it being understood that with
respect to the representations and warranties set forth in (xli), (xlii),
(xliii), (xlvi) and (xlvii) of Section 6 herein, a breach of any such
representation or warranty shall in and of itself be deemed to materially
adversely affect the interest therein of the Purchaser and the Purchaser's
assignee, transferee or designee), the Originator promptly shall deliver such
missing document or cure such defect or breach in all material respects, or in
the event the Originator cannot deliver such missing document or such defect or
breach cannot be cured, the Originator shall, within 90 days of its discovery or
receipt of notice, either (i) repurchase the affected Mortgage Loan at a price
equal to the Purchase Price or (ii) pursuant to the provisions of the Pooling
and Servicing Agreement, cause the removal of such Mortgage Loan from the Trust
Fund and substitute one or more Qualified Substitute Mortgage Loans. In the
event that any Mortgage Loan is subject to a breach of the representation and
warranty in Section 6(xxxix) resulting in the Master Servicer's inability to
collect all or part of the Prepayment Charge from the Mortgagor, in lieu of
repurchase, the Originator shall be obligated to remit to the Master Servicer
(for deposit in the Collection Account) any shortfall in the Prepayment Charge
collected upon the Mortgagor's voluntary principal prepayment.

                  The Originator shall amend the Closing Schedule to reflect the
withdrawal of such Mortgage Loan from the terms of this Agreement and the
Pooling and Servicing Agreement and the addition, if any, of a Qualified
Substitute Mortgage Loan. The Originator shall deliver to the Purchaser such
amended Closing Schedule and shall deliver such other documents as are required
by this Agreement or the Pooling and Servicing Agreement within five (5) days of
any such amendment. Any repurchase pursuant to this Section 7(a) shall be
accomplished by deposit in the Collection Account of the amount of the Purchase
Price in accordance with Section 2.03 of the Pooling and Servicing Agreement.
Any repurchase or substitution required by this Section shall be made in a
manner consistent with Section 2.03 of the Pooling and Servicing Agreement.

                  In addition, upon discovery by the Originator, the Purchaser,
or any assignee, transferee or designee of the Purchaser that any Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the party discovering the breach shall give prompt
written notice within five Business Days to the others. Within ninety (90) days
of its discovery or its receipt of notice, the Originator promptly shall either
(i) repurchase the affected Mortgage Loan at the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans.

                  (b) It is understood and agreed that the obligations of the
Originator set forth in this Section 7 to cure, remit a Prepayment Charge
shortfall, repurchase or substitute for a defective Mortgage Loan constitute the
sole remedies of the Purchaser against the Originator respecting a

<PAGE>

                                      -16-

missing or defective material document or a breach of the representations and
warranties contained in Section 5 or Section 6.

                  SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood at 10:00 AM New York City time on
the Closing Date.

                  The closing shall be subject to each of the following
conditions:

                  (a)      All of the representations and warranties of the
                           Originator under this Agreement shall be true and
                           correct in all material respects as of the date as of
                           which they are made and no event shall have occurred
                           which, with notice or the passage of time, would
                           constitute a default under this Agreement;

                  (b)      The Purchaser shall have received, or the attorneys
                           of the Purchaser shall have received in escrow (to be
                           released from escrow at the time of closing), all
                           Closing Documents as specified in Section 9 of this
                           Agreement, in such forms as are agreed upon and
                           acceptable to the Purchaser, duly executed by all
                           signatories other than the Purchaser as required
                           pursuant to the respective terms thereof;

                  (c)      The Originator shall have delivered or caused to be
                           delivered and released to the Purchaser or to its
                           designee, all documents (including without
                           limitation, the Mortgage Loans) required to be so
                           delivered by the Purchaser pursuant to Section 2.01
                           of the Pooling and Servicing Agreement; and

                  (d)      All other terms and conditions of this Agreement
                           shall have been complied with.

                  Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Originator on the Closing Date, against
delivery and release by the Originator to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement, by delivery to the
Originator of the Purchase Price.

                  SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

                  (a)      (i) An Officers' Certificate of the Originator, dated
                           the Closing Date, in form satisfactory to and upon
                           which the Purchaser and the Placement Agent may rely,
                           and attached thereto copies of the certificate of
                           incorporation, by-laws and certificate of good
                           standing of the Originator under the laws of Delaware

<PAGE>

                                      -17-

                           and stating that the information contained in the
                           Prospectus Supplement, relating to the Mortgage
                           Loans, the Originator, and its loan portfolio, is
                           true and accurate in all material respects and does
                           not contain any untrue statement of a material fact
                           or omit to state a material fact required to be
                           stated therein or necessary to make the statements
                           therein, in light of the circumstances under which
                           they were made, not misleading and (ii) if the Class
                           CE Certificates and Class P Certificates are offered
                           on the Closing Date pursuant to a Private Placement
                           Memorandum, the Originator shall deliver an Officer's
                           Certificate stating that the same information
                           contained in such Private Placement Memorandum is
                           true and accurate in all material respects;

                  (b)      An Officers' Certificate of the Originator, dated the
                           Closing Date, in form satisfactory to and upon which
                           the Purchaser and the Placement Agent may rely, with
                           respect to certain facts regarding the sale of the
                           Mortgage Loans by the Originator to the Purchaser;

                  (c)      An Opinion of Counsel of the Originator, dated the
                           Closing Date, in form satisfactory to and addressed
                           to the Purchaser and the Placement Agent;

                  (d)      Such opinions of counsel from the Purchaser's or
                           Originator's counsel as the Rating Agencies may
                           request in connection with the sale of the Mortgage
                           Loans by the Originator to the Purchaser or the
                           Originator's execution and delivery of, or
                           performance under, this Agreement and upon which the
                           Placement Agent may rely;

                  (e)      A letter from Deloitte & Touche L.L.P., certified
                           public accountants, dated the date hereof and to the
                           effect that they have performed certain specified
                           procedures as a result of which they determined that
                           certain information of an accounting, financial or
                           statistical nature set forth in the Prospectus
                           Supplement, under the captions "Summary of Prospectus
                           Supplement", "Risk Factors", "The Mortgage Pool",
                           "Yield on the Certificates", "Description of the
                           Certificates", and "Pooling and Servicing
                           Agreement--The Originator and Master Servicer",
                           agrees with the records of the Originator;

                  (f)      The Originator shall deliver for inclusion in the
                           Prospectus Supplement under the captions "The
                           Mortgage Pool--Underwriting Standards;
                           Representations" and "Pooling and Servicing
                           Agreement--The Originator and Master Servicer", or
                           for inclusion in other offering material such
                           publicly available information regarding its
                           financial condition and its mortgage loan
                           delinquency, foreclosure and loss experience,
                           underwriting standards, lending activities and loan
                           sales, production, and servicing and collection
                           practices, and any similar nonpublic, unaudited
                           financial information; and

<PAGE>

                                      -18-

                  (g)      Such further information, certificates, opinions and
                           documents as the Purchaser or the Placement Agent may
                           reasonably request.

                  SECTION 10. COSTS. The Originator shall pay (or shall
reimburse the Purchaser or any other Person to the extent that the Purchaser or
such other Person shall pay) all costs and expenses incurred in connection with
the transfer and delivery of the Mortgage Loans, including without limitation,
assignment of mortgage recording costs and/or fees for title policy endorsements
and continuations, the fees and expenses of the Originator's in-house
accountants and in-house attorneys, the costs and expenses incurred in
connection with producing the Originator's loan loss, foreclosure and
delinquency experience, and the costs and expenses incurred in connection with
obtaining the documents referred to in Sections 9(d) and 9(e) to the extent such
costs and expenses were not previously paid by the Originator. The Originator
shall pay (or shall reimburse the Purchaser or any other Person to the extent
that the Purchaser or such other Person shall pay) the costs and expenses of
printing (or otherwise reproducing) and delivering this Agreement, the Pooling
and Servicing Agreement, the Certificates, the prospectus, the prospectus
supplement, and the private placement memorandum relating to the Certificates
and other related documents, the initial fees, costs and expenses of the Trustee
relating to the issuance of the initial certification of the Trustee under
Section 2.02 of the Pooling and Servicing Agreement, the fees and expenses of
the Originator's counsel in connection with the preparation of all documents
relating to the securitization of the Mortgage Loans, the filing fee charged by
the Securities and Exchange Commission for registration of the Certificates, the
cost of outside special counsel that may be required for the Purchaser, the cost
of obtaining the documents referred to in Section 9(g) and the fees charged by
any rating agency to rate the Certificates. All other costs and expenses in
connection with the transactions contemplated hereunder shall be borne by the
party incurring such expense.

                  SECTION 11. [Reserved]

                  SECTION 12. [Reserved]

                  SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Originator's failure
to deliver the Mortgage Loans on or before the Closing Date. The Originator
hereby grants to the Purchaser a lien on and a continuing security interest in
the Originator's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Originator
of its obligation hereunder, and the Originator agrees that it holds such
Mortgage Loans in custody for the Purchaser, subject to the Purchaser's (i)
right, prior to the Closing Date, to reject any Mortgage Loan to the extent
permitted by this Agreement, and (ii) obligation to deliver or cause to be
delivered the consideration for the Mortgage Loans pursuant to Section 8 hereof.
Any Mortgage Loans rejected

<PAGE>

                                      -19-

by the Purchaser shall concurrently therewith be released from the security
interest created hereby. The Originator agrees that, upon acceptance of the
Mortgage Loans by the Purchaser or its designee and delivery of payment to the
Originator, that its security interest in the Mortgage Loans shall be released.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.

         Notwithstanding the foregoing, if on the Closing Date, each of the
conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price, or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the Purchase Price, the Purchaser
shall immediately effect the redelivery of the Mortgage Loans, if delivery to
the Purchaser has occurred and the security interest created by this Section 13
shall be deemed to have been released.

                  SECTION 14. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Purchaser, addressed to the Purchaser at 1100 Town & Country Road, Suite
1100, Orange, California 92868, Facsimile: (714) 564-9639, Attention: General
Counsel, or such other address as may hereafter be furnished to the Originator
in writing by the Purchaser; if to the Originator, addressed to the Originator
at 1100 Town & Country Road, Suite 1100, Orange, California 92868, Facsimile:
(714) 564-9639, Attention: General Counsel, or to such other address as the
Originator may designate in writing to the Purchaser.

                  SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

                  SECTION 16. AGREEMENT OF PARTIES. The Originator and the
Purchaser agree to execute and deliver such instruments and take such actions as
either of the others may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement and the
Pooling and Servicing Agreement.

                  SECTION 17. SURVIVAL. The Originator agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto

<PAGE>

                                      -20-

shall be deemed to be relied upon by the Purchaser, notwithstanding any
investigation heretofore or hereafter made by the Purchaser or on its behalf,
and that the representations, warranties and agreements made by the Originator
herein or in any such certificate or other instrument shall survive the delivery
of and payment for the Mortgage Loans and shall continue in full force and
effect, notwithstanding any restrictive or qualified endorsement on the Mortgage
Notes and notwithstanding subsequent termination of this Agreement, the Pooling
and Servicing Agreement or the Trust Fund.

                  SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (EXCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.

                  SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Originator to the Purchaser as provided
in Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Originator to the Purchaser and not as a pledge of the Mortgage Loans by the
Originator to the Purchaser to secure a debt or other obligation of the
Originator. However, in the event that, notwithstanding the aforementioned
intent of the parties, the Mortgage Loans are held to be property of the
Originator, then, (a) it is the express intent of the parties that such
conveyance be deemed a pledge of the Mortgage Loans by the Originator to the
Purchaser to secure a debt or other obligation of the Originator and (b) (1)
this Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the New York Uniform Commercial Code; (2) the
conveyance provided for in Section 4 hereof shall be deemed to be a grant by the
Originator to the Purchaser of a security interest in all of the Originator's
right, title and interest in and to the Mortgage Loans and all amounts payable
to the holders of the Mortgage Loans in accordance with the terms thereof and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Collection Account whether in the form of cash, instruments, securities
or other property; (3) the possession by the Purchaser or its agent of Mortgage
Notes, the related Mortgages and such other items of property

<PAGE>

                                      -21-

that constitute instruments, money, negotiable documents or chattel paper shall
be deemed to be "possession" for purposes of perfecting the security interest
pursuant to the New York Uniform Commercial Code; and (4) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Purchaser for the purpose of perfecting
such security interest under applicable law. Any assignment of the interest of
the Purchaser pursuant to Section 4(d) hereof shall also be deemed to be an
assignment of any security interest created hereby. The Originator and the
Purchaser shall, to the extent consistent with this Agreement, take such actions
as may be necessary to ensure that, if this Agreement were deemed to create a
security interest in the Mortgage Loans, such security interest would be deemed
to be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of this Agreement and the Pooling
and Servicing Agreement.

<PAGE>

                  IN WITNESS WHEREOF, the Originator and the Purchaser have
caused their names to be signed by their respective officers thereunto duly
authorized as of the date first above written.

                                                AMERIQUEST MORTGAGE COMPANY

                                                By:_____________________________
                                                Name:
                                                Title:

                                                AMERIQUEST MORTGAGE SECURITIES
                                                INC.

                                                By:_____________________________
                                                Name:
                                                Title:

<PAGE>

                                   EXHIBIT E-1

                               REQUEST FOR RELEASE
                                  (for Trustee)

LOAN INFORMATION

         Name of Mortgagor:         ______________________________

         Master Servicer
         Loan No.:                  ______________________________

TRUSTEE

         Name:                      ______________________________

         Address:                   ______________________________
                                    ______________________________

         Trustee Mortgage
         File No.:                  ______________________________

DEPOSITOR

         Name:                      AMERIQUEST MORTGAGE SECURITIES INC.

         Address:                   ______________________________

         Certificates:              Asset-Backed Pass-Through
                                    Certificates, Series 2003-7.

                  The undersigned Master Servicer hereby acknowledges that it
has received from _______________________, as Trustee for the Holders of
Asset-Backed Pass-Through Certificates, Series 2003-7, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement, dated as of July 1, 2003, among the Trustee, the Depositor
and the Master Servicer (the "Pooling and Servicing Agreement").

( )      Promissory Note dated _______________, 20__, in the original principal
         sum of $__________, made by _____________________, payable to, or
         endorsed to the order of, the Trustee.

                                      E-1-1

<PAGE>

( )      Mortgage recorded on _________________________ as instrument no.
         ____________________ in the County Recorder's Office of the County of
         _______________, State of __________________ in
         book/reel/docket_________________ of official records at page/image
         _____________.

( )      Deed of Trust recorded on ___________________ as instrument no.
         ________________ in the County Recorder's Office of the County of
         _________________, State of ____________________ in book/reel/docket
         _________________ of official records at page/image ______________.

( )      Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
         __________________ as instrument no. _________ in the County Recorder's
         Office of the County of _______________, State of
         _______________________ in book/reel/docket ____________ of official
         records at page/image ____________.

( )      Other documents, including any amendments, assignments or other
         assumptions of the Mortgage Note or Mortgage.

( )      ---------------------------------------------

( )      ---------------------------------------------

( )      ---------------------------------------------

( )      ---------------------------------------------

                           The undersigned Master Servicer hereby acknowledges
and agrees as follows:

                           (1) The Master Servicer shall hold and retain
possession of the Documents in trust for the benefit of the Trustee, solely for
the purposes provided in the Agreement.

                           (2) The Master Servicer shall not cause or permit the
Documents to become subject to, or encumbered by, any claim, liens, security
interest, charges, writs of attachment or other impositions nor shall the Master
Servicer assert or seek to assert any claims or rights of setoff to or against
the Documents or any proceeds thereof.

                           (3) The Master Servicer shall return each and every
Document previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been remitted to the
Collection Account and except as expressly provided in the Agreement.

                           (4) The Documents and any proceeds thereof, including
any proceeds of proceeds, coming into the possession or control of the Master
Servicer shall at all times be earmarked for the account of the Trustee, and the
Master Servicer shall keep the Documents and any proceeds separate and distinct
from all other property in the Master Servicer's possession, custody or control.

                                      E-1-2

<PAGE>

Dated:

                                              [MASTER SERVICER]

                                              By:    ___________________________
                                              Name:
                                              Title:

                                      E-1-3

<PAGE>

                                   EXHIBIT E-2

                               REQUEST FOR RELEASE
                          [Mortgage Loans Paid in Full]

        OFFICERS' CERTIFICATE AND TRUST RECEIPT ASSET-BACKED PASS-THROUGH
                           CERTIFICATES SERIES 2003-7

____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH
BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN
MADE.

LOAN NUMBER:  _______________               BORROWER'S NAME: ___________________

COUNTY: ______________________

WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

________________________________            DATED:  ____________________________

/ / VICE PRESIDENT

/ / ASSISTANT VICE PRESIDENT

                                      E-2-1

<PAGE>

                                   EXHIBIT F-1

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                          [DATED]

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705-4934

        Re:    Ameriquest Mortgage Securities Inc., Asset-Backed
               Pass-Through Certificates, Series 2003-7, Class ___, representing
               a ___% Class ___ Percentage Interest
               -----------------------------------------------------------------

Ladies and Gentlemen:

        In connection with the transfer by ________________ (the "Transferor")
to ________________ (the "Transferee") of the captioned mortgage pass-through
certificates (the "Certificates"), the Transferor hereby certifies as follows:

        Neither the Transferor nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, (e)
has taken any other action, that (in the case of each of subclauses (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933, as amended (the "1933 Act"), or would render the
disposition of any Certificate a violation of Section 5 of the 1933 Act or any
state securities law or would require registration or qualification pursuant
thereto. The Transferor will not act, nor has it authorized or will it authorize
any person to act, in any manner set forth in the foregoing sentence with
respect to any Certificate. The Transferor will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of that
certain Pooling and Servicing Agreement, dated as of July 1, 2003, among
Ameriquest Mortgage Securities Inc. as Depositor, Ameriquest Mortgage Company as
Master Servicer and Deutsche Bank National Trust Company as Trustee (the
"Pooling and Servicing Agreement"), pursuant to which Pooling and Servicing
Agreement the Certificates were issued.

                                      F-1-1

<PAGE>

          Capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.

                                            Very truly yours,

                                            [Transferor]

                                            By:   ______________________________
                                            Name:
                                            Title:

                                      F-1-2

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                  [Date]

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705-4934

         Re:      Ameriquest Mortgage Securities Inc., Asset-Backed
                  Pass-Through Certificates, Series 2003-7, Class ___,
                  Representing a ___% Class ___ Percentage Interest
                  ----------------------------------------------------

Ladies and Gentlemen:

In connection with the purchase from ______________________ (the "Transferor")
on the date hereof of the captioned trust certificates (the "Certificates"),
_______________ (the "Transferee") hereby certifies as follows:

                  1. The Transferee is a "qualified institutional buyer" as that
         term is defined in Rule 144A ("Rule 144A") under the Securities Act of
         1933 (the "1933 Act") and has completed either of the forms of
         certification to that effect attached hereto as Annex 1 or Annex 2. The
         Transferee is aware that the sale to it is being made in reliance on
         Rule 144A. The Transferee is acquiring the Certificates for its own
         account or for the account of a qualified institutional buyer, and
         understands that such Certificate may be resold, pledged or transferred
         only (i) to a person reasonably believed to be a qualified
         institutional buyer that purchases for its own account or for the
         account of a qualified institutional buyer to whom notice is given that
         the resale, pledge or transfer is being made in reliance on Rule 144A,
         or (ii) pursuant to another exemption from registration under the 1933
         Act.

                  2. The Transferee has been furnished with all information
         regarding (a) the Certificates and distributions thereon, (b) the
         nature, performance and servicing of the Mortgage Loans, (c) the
         Pooling and Servicing Agreement referred to below, and (d) any credit
         enhancement mechanism associated with the Certificates, that it has
         requested.

                                      F-1-3

<PAGE>

                  All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of July 1, 2003, among Ameriquest Mortgage Securities Inc.
as Depositor, Ameriquest Mortgage Company as Master Servicer and Deutsche Bank
National Trust Company as Trustee, pursuant to which the Certificates were
issued.

                                            [TRANSFEREE]

                                            By: ______________________________
                                            Name:
                                            Title:

                                      F-1-4

<PAGE>

                                                          ANNEX 1 TO EXHIBIT F-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

          The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Deutsche Bank National Trust Company as Trustee, with
respect to the mortgage pass-through certificates (the "Certificates") described
in the Transferee Certificate to which this certification relates and to which
this certification is an Annex:

          1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

          2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Transferee owned and/or
invested on a discretionary basis $______________________1 in securities (except
for the excluded securities referred to below) as of the end of the Transferee's
most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Transferee satisfies the criteria in the category marked
below.

   ___    CORPORATION, ETC. The Transferee is a corporation (other than a bank,
          savings and loan association or similar institution), Massachusetts or
          similar business trust, partnership, or any organization described in
          Section 501(c)(3) of the Internal Revenue Code of 1986.

   ___    BANK. The Transferee (a) is a national bank or banking institution
          organized under the laws of any State, territory or the District of
          Columbia, the business of which is substantially confined to banking
          and is supervised by the State or territorial banking commission or
          similar official or is a foreign bank or equivalent institution, and
          (b) has an audited net worth of at least $25,000,000 as demonstrated
          in its latest annual financial statements, A COPY OF WHICH IS ATTACHED
          HERETO.

   ___    SAVINGS AND LOAN. The Transferee (a) is a savings and loan
          association, building and loan association, cooperative bank,
          homestead association or similar institution, which is supervised and
          examined by a State or Federal authority having supervision over any
          such institutions or is a foreign savings and loan association or
          equivalent institution and (b) has an audited net worth of at least
          1Transferee must own and/or invest on a discretionary basis at least
          $100,000,000 in securities unless Transferee is a dealer, and, in that
          case, Transferee must own and/or invest on a discretionary basis at
          least $10,000,000 in securities. $25,000,000 as demonstrated in its
          latest annual financial statements, A COPY OF WHICH IS ATTACHED
          HERETO.

                                      F-1-5

<PAGE>

   ___    BROKER-DEALER. The Transferee is a dealer registered pursuant to
          Section 15 of the Securities Exchange Act of 1934.

   ___    INSURANCE COMPANY. The Transferee is an insurance company whose
          primary and predominant business activity is the writing of insurance
          or the reinsuring of risks underwritten by insurance companies and
          which is subject to supervision by the insurance commissioner or a
          similar official or agency of a State, territory or the District of
          Columbia.

   ___    STATE OR LOCAL PLAN. The Transferee is a plan established and
          maintained by a State, its political subdivisions, or any agency or
          instrumentality of the State or its political subdivisions, for the
          benefit of its employees.

   ___    ERISA PLAN. The Transferee is an employee benefit plan within the
          meaning of Title I of the Employee Retirement Income Security Act of
          1974.

   ___    INVESTMENT ADVISOR. The Transferee is an investment advisor registered
          under the Investment Advisers Act of 1940.

          3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.

          4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the Transferee
used the cost of such securities to the Transferee and did not include any of
the securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated
with the Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the Securities Exchange Act of 1934.

          5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Transferee may be in reliance on Rule 144A.

      _____    _____    Will the Transferee be purchasing the Certificates
      Yes      No       only for the Transferee's own account?

                                      F-1-6

<PAGE>

                  6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.

                  7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.

Dated:

                                            Print Name of Transferee

                                            By:   ______________________________
                                            Name:
                                            Title:

                                      F-1-7

<PAGE>

                                                          ANNEX 2 TO EXHIBIT F-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Deutsche Bank National Trust Company, as
Trustee, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.

         ____     The Transferee owned $___________________ in securities (other
                  than the excluded securities referred to below) as of the end
                  of the Transferee's most recent fiscal year (such amount being
                  calculated in accordance with Rule 144A).

         ____     The Transferee is part of a Family of Investment Companies
                  which owned in the aggregate $______________ in securities
                  (other than the excluded securities referred to below) as of
                  the end of the Transferee's most recent fiscal year (such
                  amount being calculated in accordance with Rule 144A).

                  3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                  4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.

                                      F-1-8

<PAGE>

                  5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.

                  6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated:

                                           Print Name of Transferee or Advisor

                                           By:      ____________________________
                                           Name:
                                           Title:

                                           IF AN ADVISER:

                                           _____________________________________
                                           Print Name of Transferee

                                      F-1-9

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                  The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:

                  1.       I am an executive officer of the Purchaser.

                  2. The Purchaser is a "qualified institutional buyer", as
         defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933,
         as amended.

         3. As of the date specified below (which is not earlier than the last
         day of the Purchaser's most recent fiscal year), the amount of
         "securities", computed for purposes of Rule 144A, owned and invested on
         a discretionary basis by the Purchaser was in excess of $100,000,000.

Name of Purchaser      _________________________________________________________

By:      (Signature)   _________________________________________________________

Name of Signatory      _________________________________________________________

Title    _______________________________________________________________________

Date of this certificate _______________________________________________________

Date of information provided in paragraph 3 ____________________________________

                                     F-1-10

<PAGE>

                                   EXHIBIT F-2

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

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

                  ____________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ______________________ of __________________________
(the "Owner") a corporation duly organized and existing under the laws of
______________, the record owner of Ameriquest Mortgage Securities Inc.,
Asset-Backed Pass-Through Certificates, Series 2003-7, [Class R/Class R-X] (the
"Residual Certificates"), on behalf of whom I make this affidavit and agreement.
Capitalized terms used but not defined herein have the respective meanings
assigned thereto in the Pooling and Servicing Agreement pursuant to which the
Residual Certificates were issued.

                  2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 2003 and (ii) is acquiring the Residual Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.

                  3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Residual Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Residual
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Residual Certificates may be a "noneconomic residual interest" within the
meaning of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or collection of tax.

                                      F-2-1

<PAGE>

                  4. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Residual Certificates if, at any time during the taxable
year of the pass-through entity, a non- Permitted Transferee is the record
holder of an interest in such entity. (For this purpose, a "pass- through
entity" includes a regulated investment company, a real estate investment trust
or common trust fund, a partnership, trust or estate, and certain cooperatives.)

                  5. The Owner is aware that the Certificate Registrar will not
register the transfer of any Residual Certificate unless the transferee, or the
transferee's agent, delivers to the Certificate Registrar, among other things,
an affidavit in substantially the same form as this affidavit. The Owner
expressly agrees that it will not consummate any such transfer if it knows or
believes that any of the representations contained in such affidavit and
agreement are false.

                  6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Residual Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.

                  7. The Owner's taxpayer identification number is ____________.

                  8. The Owner has reviewed the restrictions set forth on the
face of the Residual Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Residual Certificates were
issued (in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which
authorize the Trustee to deliver payments to a person other than the Owner and
negotiate a mandatory sale by the Trustee in the event that the Owner holds such
Certificate in violation of Section 5.02(d)); and that the Owner expressly
agrees to be bound by and to comply with such restrictions and provisions.

                  9. The Owner is not acquiring and will not transfer the
Residual Certificates in order to impede the assessment or collection of any
tax.

                  10. The Owner anticipates that it will, so long as it holds
the Residual Certificates, have sufficient assets to pay any taxes owed by the
holder of such Residual Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Residual Certificates that the
Owner intends to pay taxes associated with holding such Residual Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Residual Certificates.

                  11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Residual Certificates.

                  12. The Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.

                  13. The Owner is not acquiring the Residual Certificates with
the intent to transfer the Residual Certificates to any person or entity that
will not have sufficient assets to pay any taxes

                                      F-2-2

<PAGE>

owed by the holder of such Residual Certificates, or that may become insolvent
or subject to a bankruptcy proceeding, for so long as the Residual Certificates
remain outstanding.

                  14. The Owner will, in connection with any transfer that it
makes of the Residual Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Residual Certificate were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.

                  15. The Owner will, in connection with any transfer that it
makes of the Residual Certificates, deliver to the Certificate Registrar an
affidavit, which represents and warrants that it is not transferring the
Residual Certificates to impede the assessment or collection of any tax and that
it has no actual knowledge that the proposed transferee: (i) has insufficient
assets to pay any taxes owed by such transferee as holder of the Residual
Certificates; (ii) may become insolvent or subject to a bankruptcy proceeding
for so long as the Residual Certificates remains outstanding; and (iii) is not a
"Permitted Transferee".

                  16. The Owner is a citizen or resident of the United States, a
corporation or partnership (or other entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States, any state thereof or the District of Columbia
(except, in the case of a partnership or entity treated as a partnership, to the
extent provided in regulations), an estate the income of which is subject to
United States federal income taxation regardless of its source or a trust other
than a "foreign trust" described in section 7701(a)(31) of the Code.

                                      F-2-3

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 200__.

                                            [OWNER]

                                            By:      ___________________________
                                            Name:
                                            Title:   [Vice] President

ATTEST:

By:      ______________________________
Name:
Title:   [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of __________,
200__.

                                                _______________________________
                                                         Notary Public

                                                County of _____________________
                                                State of ______________________

                                                My Commission expires:

                                      F-2-4

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

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

                  _______________________________________, being duly sworn,
deposes, represents and warrants _____________________________ as follows:

                  1. I am a ____________________ of (the "Owner"), a corporation
duly organized and existing under the laws of ______________, on behalf of whom
I make this affidavit.

                  2. The Owner is not transferring the [Class R/Class R-X] (the
"Residual Certificates") to impede the assessment or collection of any tax.

                  3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

                  4. The Owner understands that the Purchaser has delivered to
the Certificate Registrar a transfer affidavit and agreement in the form
attached to the Pooling and Servicing Agreement as Exhibit F-2. The Owner does
not know or believe that any representation contained therein is false.

                  5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E- 1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.

                  6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.

                                      F-2-5

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 200__.

                                               [OWNER]

                                               By:    __________________________
                                               Name:
                                               Title:  [Vice] President

ATTEST:

By:      ______________________________
Name:
Title:   [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of __________,
200__.

                                               _________________________________
                                                         Notary Public

                                               County of  ______________________
                                               State of ________________________

                                               My Commission expires:

                                      F-2-6

<PAGE>

                                    EXHIBIT G

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                                  _____________, 200__

Ameriquest Mortgage Securities Inc.         Deutsche Bank National Trust Company
1100 Town & Country Road                    1761 East St. Andrew Place
Orange, California 92868                    Santa Ana, California 92705-4934
Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

                           Re:   Ameriquest Mortgage Securities Inc.
                                 Asset-Backed Pass-Through Certificates,
                                 Series 2003-7, Class [CE], [P], [R]
                                 -----------------------------------

Dear Ladies and Gentlemen:

                  __________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Ameriquest Mortgage Securities Inc.,
Asset-Backed Pass-Through Certificates, Series 2003-7, Class ___ (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of July 1, 2003 among Ameriquest
Mortgage Securities Inc. as depositor (the "Depositor"), Ameriquest Mortgage
Company as master servicer (the "Master Servicer") and Deutsche Bank National
Trust Company as trustee (the "Trustee"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in the Pooling and
Servicing Agreement. The Transferee hereby certifies, represents and warrants
to, and covenants with the Depositor, the Trustee and the Master Servicer that
the following statements in either (1) or (2) are accurate:

                  The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29
C.F.R.ss.2510.3-101.

                                               Very truly yours,

                                               By: _____________________________
                                               Name:
                                               Title:

                                       G-1

<PAGE>

                                    EXHIBIT H

                                   [RESERVED]

                                       H-1

<PAGE>

                                    EXHIBIT I

<TABLE>
<CAPTION>
                           LOSS MITIGATION ACTION PLAN

---------------------------------------------------------------------------------------------------------
DEFAULT MITIGATION ACTION                          SUPPORTING STANDARDS
---------------------------------------------------------------------------------------------------------
<S>                                                <C>
Forbearance Workout                                Borrower  documents a temporary financial hardship
Defer any of the following:                        resulting in request for a forbearance
1.accrued interest                                 Borrower documents financial ability to pay under the
2.past due principal                               proposed forbearance terms
3.escrow advances                                  Borrower expresses a willingness to perform.
4.corporate advances                               Current monthly payments  are scheduled to  be made
5.ancillary fees                                   prior to late charge date during the forbearance term
6.any combination of the above

---------------------------------------------------------------------------------------------------------
Loan Modification Workout                          Borrower documents a  non-temporary financial
Any of the following:                              hardship resulting in the request for  a loan
1.waive accrued interest                           modification
2.waive past due principal                         Borrower documents financial ability to pay under the
3.waive corporate advances                         proposed loan modification terms
4.waive ancillary fees                             Borrower does not have the ability to pay under the
5.reduce principal                                 original loan terms
6.reduce interest rate                             Borrower expresses a willingness to perform
7.any combination of the above items               No waiver of escrow advances (taxes and insurance) is
8.any combination with the Forbearance items       allowed

---------------------------------------------------------------------------------------------------------
Short Sale Disposal                                Sale to a third party
Waive or negotiate a reduced amount of any         Independent appraisal supports sale price
of the following:                                  No cash to seller (borrower), excluding costs necessary
1.accrued interest                                 to close
2.principal                                        Borrower does not have the ability and/or willingness
3.escrow advances                                  to pay
4.corporate advances                               Borrower no longer wants property
5.ancillary fees
6.prepayment charges
7.any combination of the above items

---------------------------------------------------------------------------------------------------------
Short pay-off Disposal                             Refinance by independent third party Lender
Waive or negotiate a reduced amount of any         Independent appraisal supports new loan amount
of the following:                                  \New loan is no cash out (i.e. no cash to borrower
1.accrued interest                                 excluding costs necessary to close)
2.principal                                        Borrower  has expressed his/her unwillingness to pay
3.escrow advances                                  Anticipated refinance time frame is less than
4.corporate advances                               anticipated foreclosure time frame
5.ancillary fees
6.prepayment charges
7.any combination of the above items
</TABLE>

                                                        I-1

<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
DEFAULT MITIGATION ACTION                          SUPPORTING STANDARDS
---------------------------------------------------------------------------------------------------------
<S>                                                <C>
Deed-in-lieu Disposal                              Borrower has already  or will abandon the property or
---------------------                              is willing to vacate the property (in a broom sweep
                                                   condition) on a mutually agreeable date
                                                   Borrower does not have the ability and/or willingness
                                                   to pay
                                                   Independent appraisal confirms property  has a value
                                                   Title is clean
                                                   Property appears to be resalable based on condition and
                                                   value shown in independent appraisal
                                                   Property does not appear to have any environmental or
                                                   hazardous conditions (or such conditions appear to be
                                                   curable)

---------------------------------------------------------------------------------------------------------
Foreclosure Disposal                               Borrower has already  or will abandon the property
--------------------                               (which may be by an eviction proceeding or mutual
                                                   agreement)
                                                   Borrower does not have the ability and/or willingness
                                                   to pay
                                                   Independent appraisal confirms property has a value
                                                   Property appears to be resalable based on condition and
                                                   value shown in independent appraisal
                                                   Property does not appear to have any environmental or
                                                   hazardous conditions (or such conditions appear to be
                                                   curable)
---------------------------------------------------------------------------------------------------------
</TABLE>

Workouts in the form of either a Forbearance or Loan Modification require that
the Borrower document the existence of a financial hardship leading to the
payment delinquency and document the ability to make the payments required under
the proposed Forbearance or Loan Modification. If the Borrower fails to meet
both of these conditions or the Borrower is uncooperative, a Disposal Loss
Mitigation Action will be employed to liquidate the delinquent loan, assuming
the Borrower does not otherwise cure the existing default. Each of the Default
Mitigation Actions and Supporting Standards may not be applicable to each and
every loan subject to a default in its monthly payments and in those cases where
a Default Mitigation Action or Supporting Standard may be applicable, each is
subject to amendment and/or waiver on an individual basis pursuant to applicable
federal, state and local laws, decisional authorities, court orders,
instructions of regulatory and/or other governmental authorities, the advice of
legal counsel, instructions from the Trustee and changes in the loan servicing
standards.

                                       I-2

<PAGE>

                                   EXHIBIT J-1

        FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K

                  Re:      Ameriquest Mortgage Securities Inc., Series 2003-7
                           Asset-Backed Certificates, Series 2003-7

                  I, John Grazer, the senior officer of Ameriquest Mortgage
Securities Inc. (the "Registrant") in charge of securitizations, certify that:

                  l. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution and servicing reports filed in
respect of periods included in the year covered by this annual report, of
Registrant;

                  2. Based on my knowledge, the information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;

                  3. Based on my knowledge, the distribution or servicing
information required to be provided to the Trustee by the Master Servicer under
the Pooling and Servicing Agreement is included in these reports;

                  4. I am responsible for reviewing the activities performed by
the Master Servicer under the Pooling and Servicing Agreement and based upon my
knowledge and the annual compliance review required under the Pooling and
Servicing Agreement, and except as disclosed in the reports, the Master Servicer
has fulfilled its obligations under the Pooling and Servicing Agreement; and

                  5. The reports disclose all significant deficiencies relating
to the Master Servicer's compliance with the minimum servicing standards based
upon the report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar procedure, as set forth in the Pooling and Servicing
Agreement that is included in these reports.

                  In giving the certifications above, I have reasonably relied
on information provided to me by the following unaffiliated parties: Deutsche
Bank National Trust Company.

                                      J-1-1

<PAGE>

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated July 1,
2003 (the "Pooling and Servicing Agreement"), among the Registrant as depositor,
Ameriquest Mortgage Company as master servicer and Deutsche Bank National Trust
Company as trustee.

                                          AMERIQUEST MORTGAGE SECURITIES INC.

                                          By:___________________________________
                                          Name:
                                          Title:
                                          Date:

                                      J-2-2

<PAGE>

                                   EXHIBIT J-2

                            FORM CERTIFICATION TO BE
                      PROVIDED TO DEPOSITOR BY THE TRUSTEE

                  Re:    Ameriquest Mortgage Securities Inc., Series 2003-7
                         Asset-Backed Certificates, Series 2003-7

                  I, [identify the certifying individual], a [title] of Deutsche
Bank National Trust Company, as Trustee, hereby certify to Ameriquest Mortgage
Securities Inc. (the "Depositor"), and its officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:

                  1. I have reviewed the annual report on Form 10-K for the
fiscal year [___], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Depositor relating to the above-referenced trust;

                  2. Based on my knowledge, the information in these
distribution reports prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and

                  3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in these distribution reports.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated July 1,
2003 (the "Pooling and Servicing Agreement"), among the Registrant as depositor,
Ameriquest Mortgage Company as master servicer and Deutsche Bank National Trust
Company as trustee.

                                               DEUTSCHE BANK NATIONAL TRUST
                                               COMPANY, as Trustee

                                               By:______________________________
                                               Name:
                                               Title:
                                               Date:

                                      J-2-3

<PAGE>

                                    EXHIBIT K

                     FORM OF NOTICE FOR LOCATION OF ACCOUNTS

                                                              July ___, 2003

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868
Attn: General Counsel

[NIMS INSURER]

                    Re:  Pooling and Servicing Agreement (the "Pooling
                         and Servicing Agreement"), dated as of July 1,
                         2003 among Ameriquest Mortgage Securities Inc.,
                         as Depositor, Ameriquest Mortgage Company, as
                         Seller and Master Servicer, and Deutsche Bank
                         National Trust Company, as Trustee, with
                         respect to Ameriquest Mortgage Securities Inc.,
                         Series 2003-7
                         ------------------------------------------------

Dear Sirs:

          Pursuant to Section 3.04(i) of the above referenced Pooling and
Servicing Agreement you are hereby notified of the location and the date of
establishment of the following accounts:

          Distribution Account and the Net WAC Rate Carryover Reserve Account.

          The accounts were established on____________________, 2003, are held
at Deutsche Bank National Trust Company in New York, New York, and are
maintained by Deutsche Bank National Trust Company at 1761 East St. Andrew
Place, Santa Ana, California 92705.

          If you should have any questions, please feel free to contact me at
(714) 247- _______.

                                                 Very truly yours,

                                                 DEUTSCHE BANK NATIONAL TRUST
                                                 COMPANY

                                                 By:____________________________
                                                 Name:
                                                 Title:

                                       K-1

<PAGE>

                     FORM OF NOTICE FOR LOCATION OF ACCOUNTS

                                                     July ___, 2003

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705

[NIMS INSURER]

                    Re:  Pooling and Servicing Agreement (the "Pooling
                         and Servicing Agreement"), dated as of July 1,
                         2003 among Ameriquest Mortgage Securities Inc.,
                         as Depositor, Ameriquest Mortgage Company, as
                         Seller and Master Servicer and Deutsche Bank
                         National Trust Company, as Trustee, with
                         respect to Ameriquest Mortgage Securities Inc.,
                         Series 2003-7
                         -----------------------------------------------

Dear Sirs:

          Pursuant to Section 3.04(i) of the above referenced Pooling and
Servicing Agreement you are hereby notified of the location and the date of
establishment of the following account:

          Collection Account

          The accounts were established on____________________, 2003, are held
at Ameriquest Mortgage Company in Orange, California, and are maintained by
Ameriquest Mortgage Company at 1100 Town & Country Road, Suite 1100.

                                       K-2

<PAGE>

          If you should have any questions, please feel free to contact me at
(714) 564-____.

                                                 Very truly yours,

                                                 AMERIQUEST MORTGAGE COMPANY

                                                 By:____________________________
                                                 Name:
                                                 Title:

                                       K-3

<PAGE>

                                    EXHIBIT L

                              OFFICER'S CERTIFICATE
                    REGARDING ANNUAL STATEMENT OF COMPLIANCE

                   ___________________ Trust, Series 200_-___
                    _______________ Pass-Through Certificates

          I, _____________________, hereby certify that I am a duly appointed
__________________________ of _______________________________ (the "[Master
Servicer]"), and further certify as follows:

          1. This certification is being made pursuant to the terms of the
Pooling and Servicing Agreement, dated as of ____________, _____ (the
"Agreement"), among ______________________, as depositor, the [Master Servicer],
as [master servicer] and ________________, as trustee.

          2. I have reviewed the activities of the [Master Servicer] during the
preceding year and the [Master Servicer's] performance under the Agreement and
to the best of my knowledge, based on such review, the [Master Servicer] has
fulfilled all of its obligations under the Agreement throughout the year.

          Capitalized terms not otherwise defined herein have the meanings set
forth in the Agreements.

Dated: _________________

                                       L-1

<PAGE>

          IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of _____________.

                                             By:  _____________________________
                                             Name:
                                             Title:

          I, _________________________, a (an) __________________ of the [Master
Servicer], hereby certify that _________________ is a duly elected, qualified,
and acting _______________________ of the [Master Servicer] and that the
signature appearing above is his/her genuine signature.

          IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of ______________.

                                             By:  ______________________________
                                             Name:
                                             Title:

                                       L-2

<PAGE>

                                   SCHEDULE 1

                             MORTGAGE LOAN SCHEDULE

                                [Filed by Paper]

                                  Schedule-1-1

<PAGE>

                                   SCHEDULE 2

                           PREPAYMENT CHARGE SCHEDULE

                            [Available Upon Request]

                                  Schedule-2-1SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
                                    Depositor

                          UNION PLANTERS MORTGAGE, INC.
                                 Master Servicer

                                       and

                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT
                            Dated as of July 1, 2003

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

                       Mortgage Pass-Through Certificates

                                 Series 2003-UP2

<PAGE>

                                TABLE OF CONTENTS

SECTION                                                                     PAGE
-------                                                                     ----

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.01.  Defined Terms.................................................-3-
SECTION 1.02.  Allocation of Certain Interest Shortfalls....................-44-

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

SECTION 2.01.  Conveyance of Mortgage Loans.................................-45-
SECTION 2.02.  Acceptance of REMIC I by the Trustee.........................-47-
SECTION 2.03.  Repurchase or Substitution of Mortgage Loans by
               the Seller...................................................-49-
SECTION 2.04.  [Reserved]...................................................-51-
SECTION 2.05.  Representations, Warranties and Covenants of the
               Master Servicer..............................................-51-
SECTION 2.06.  Issuance of the Certificates.................................-53-

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

SECTION 3.01.  Master Servicer to Act as Master Servicer....................-54-
SECTION 3.02.  Sub-Servicing Agreements Between the Master Servicer
               and Sub-Servicers............................................-55-
SECTION 3.03.  Successor Sub-Servicers......................................-56-
SECTION 3.04.  Liability of the Master Servicer.............................-57-
SECTION 3.05.  No Contractual Relationship Between Sub-Servicers
               and Trustee or Certificateholders............................-57-
SECTION 3.06.  Assumption or Termination of Sub-Servicing Agreements
               by Trustee...................................................-57-
SECTION 3.07.  Collection of Certain Mortgage Loan Payments.................-58-
SECTION 3.08.  Sub-Servicing Accounts.......................................-58-
SECTION 3.09.  Collection of Taxes, Assessments and Similar Items;
               Servicing Accounts...........................................-59-
SECTION 3.10.  Collection Account and Distribution Account..................-60-
SECTION 3.11.  Withdrawals from the Collection Account and Distribution
               Account......................................................-62-
SECTION 3.12.  Investment of Funds in the Collection Account and the
               Distribution Account.........................................-64-
SECTION 3.13.  Maintenance of the Primary Mortgage Insurance Policies;
               Collections Thereunder.......................................-65-

                                        i

<PAGE>

SECTION 3.14.  Maintenance of Hazard Insurance and Errors and Omissions
               and Fidelity Coverage........................................-66-
SECTION 3.15.  Enforcement of Due-On-Sale Clauses; Assumption Agreements....-68-
SECTION 3.16.  Realization Upon Defaulted Mortgage Loans....................-69-
SECTION 3.17.  Trustee to Cooperate; Release of Mortgage Files..............-71-
SECTION 3.18.  Servicing Compensation.......................................-72-
SECTION 3.19.  Reports to the Trustee; Collection Account Statements........-72-
SECTION 3.20.  Statement as to Compliance...................................-72-
SECTION 3.21.  Independent Public Accountants' Servicing Report.............-73-
SECTION 3.22.  Access to Certain Documentation..............................-73-
SECTION 3.23.  Title, Management and Disposition of REO Property............-74-
SECTION 3.24.  Obligations of the Master Servicer in Respect of
               Prepayment Interest Shortfalls...............................-77-
SECTION 3.25.  Obligations of the Master Servicer in Respect of
               Monthly Payments.............................................-77-
SECTION 3.26.  Advance Facility.............................................-77-

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

SECTION 4.01.  Distributions................................................-79-
SECTION 4.02.  Statements to Certificateholders.............................-83-
SECTION 4.03.  Remittance Reports; P&I Advances.............................-86-
SECTION 4.04.  Allocation of Extraordinary Trust Fund Expenses and
               Realized Losses..............................................-87-
SECTION 4.05.  Compliance with Withholding Requirements.....................-89-
SECTION 4.06.  Distributions on the REMIC I Regular Interests...............-89-
SECTION 4.07.  Commission Reporting.........................................-90-
SECTION 4.08.  Excess Diverted Interest Reserve Account.....................-92-

                                    ARTICLE V

                                THE CERTIFICATES

SECTION 5.01.  The Certificates.............................................-93-
SECTION 5.02.  Registration of Transfer and Exchange of Certificates........-95-
SECTION 5.03.  Mutilated, Destroyed, Lost or Stolen Certificates............-99-
SECTION 5.04.  Persons Deemed Owners........................................-99-
SECTION 5.05.  Certain Available Information...............................-100-

                                       ii

<PAGE>

                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

SECTION 6.01.  Liability of the Depositor and the Master Servicer..........-101-
SECTION 6.02.  Merger or Consolidation of the Depositor or the Master
               Servicer....................................................-101-
SECTION 6.03.  Limitation on Liability of the Depositor, the Master
               Servicer and Others.........................................-101-
SECTION 6.04.  Limitation on Resignation of the Master Servicer............-102-
SECTION 6.05.  Rights of the Depositor in Respect of the Master Servicer...-103-

                                   ARTICLE VII

                                     DEFAULT

SECTION 7.01.  Master Servicer Events of Default...........................-104-
SECTION 7.02.  Trustee to Act; Appointment of Successor....................-106-
SECTION 7.03.  Notification to Certificateholders..........................-107-
SECTION 7.04.  Waiver of Master Servicer Events of Default.................-107-

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

SECTION 8.01.  Duties of Trustee...........................................-109-
SECTION 8.02.  Certain Matters Affecting the Trustee.......................-110-
SECTION 8.03.  Trustee not Liable for Certificates or Mortgage Loans.......-111-
SECTION 8.04.  Trustee May Own Certificates................................-111-
SECTION 8.05.  Trustee's Fees and Expenses.................................-111-
SECTION 8.06.  Eligibility Requirements for Trustee........................-112-
SECTION 8.07.  Resignation and Removal of the Trustee......................-112-
SECTION 8.08.  Successor Trustee...........................................-113-
SECTION 8.09.  Merger or Consolidation of Trustee..........................-114-
SECTION 8.10.  Appointment of Co-Trustee or Separate Trustee...............-114-
SECTION 8.11.  [intentionally omitted].....................................-115-
SECTION 8.12.  Appointment of Office or Agency.............................-115-
SECTION 8.13.  Representations and Warranties..............................-115-

                                   ARTICLE IX

                                   TERMINATION

SECTION 9.01.  Termination Upon Repurchase or Liquidation of the
               Trust Fund..................................................-117-
SECTION 9.02.  Additional Termination Requirements.........................-119-

                                       iii

<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

SECTION 10.01.   REMIC Administration......................................-120-
SECTION 10.02.   Prohibited Transactions and Activities....................-122-
SECTION 10.03.   Master Servicer and Trustee Indemnification...............-123-

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

SECTION 11.01.   Amendment.................................................-124-
SECTION 11.02.   Recordation of Agreement; Counterparts....................-125-
SECTION 11.03.   Limitation on Rights of Certificateholders................-125-
SECTION 11.04.   Governing Law.............................................-126-
SECTION 11.05.   Notices...................................................-126-
SECTION 11.06.   Severability of Provisions................................-127-
SECTION 11.07.   Notice to Rating Agency...................................-127-
SECTION 11.08.   Article and Section References............................-128-
SECTION 11.09.   Grant of Security Interest................................-128-

                                       iv

<PAGE>

Exhibits
--------

Exhibit A-1    Form of Class A-1 Certificate
Exhibit A-2    Form of Class A-2 Certificate
Exhibit A-3    Form of Class A-3 Certificate
Exhibit A-4    Form of Class A-4 Certificate
Exhibit A-5    Form of Class S-1 Certificate
Exhibit A-6    Form of Class S-2 Certificate
Exhibit A-7    Form of Class IO-1 Certificate
Exhibit A-8    Form of Class IO-2 Certificate
Exhibit A-9    Form of Class PO-1 Certificate
Exhibit A-10   Form of Class PO-2 Certificate
Exhibit A-11   Form of Class B-1 Certificate
Exhibit A-12   Form of Class B-2 Certificate
Exhibit A-13   Form of Class B-3 Certificate
Exhibit A-14   Form of Class B-4 Certificate
Exhibit A-15   Form of Class B-5 Certificate
Exhibit A-16   Form of Class B-6 Certificate
Exhibit A-17   Form of Class R Certificate
Exhibit B      [Reserved]
Exhibit C-1    Form of Trustee's Initial Certification
Exhibit C-2    Form of Trustee's Final Certification
Exhibit C-3    Form of Receipt of Mortgage Note
Exhibit D      Form of Mortgage Loan Purchase Agreement
Exhibit E      Request for Release
Exhibit F-1    Form of Transferor Representation Letter and Form of Transferee
               Representation Letter in Connection with Transfer of Private
               Certificates Pursuant to Rule 144A Under the 1933 Act
Exhibit F-2    Form of Transfer Affidavit and Agreement and Form of Transferor
               Affidavit in Connection with Transfer of Residual Certificates
Exhibit G      Form of Certification with respect to ERISA and the Code
Exhibit H      Loss Mitigation Procedures
Exhibit I      Form of Statement as to Compliance
Exhibit J-1    Form of Certification to be Provided by the Depositor with Form
               10-K
Exhibit J-2    Form of Certification to be Provided to the Depositor by the
               Trustee
Exhibit J-3    Form of Certification to be Provided to the Depositor by the
               Master Servicer

Schedule 1     Mortgage Loan Schedule
Schedule 2     Mortgage Loans covered by a Primary Mortgage Insurance Policy

                                        v

<PAGE>

                  This Pooling and Servicing Agreement, is dated and effective
as of July 1, 2003, among SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., as
Depositor, UNION PLANTERS MORTGAGE, INC., as Master Servicer and WELLS FARGO
BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee.

                             PRELIMINARY STATEMENT:

                  The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder.

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a REMIC (as defined herein) for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC I". The Class R-I Interest will be the sole class of
"residual interests" in REMIC I for purposes of the REMIC Provisions (as defined
herein). The following table irrevocably sets forth the designation, the REMIC I
Remittance Rate, the initial Uncertificated Balance and, solely for purposes of
satisfying Treasury regulation section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC I Regular Interests (as defined herein).
None of the REMIC I Regular Interests will be certificated

REMIC I Regular       REMIC I         Initial Uncertificated     Latest Possible
    Interest      Remittance Rate             Balance           Maturity Date(1)
---------------   ---------------     ----------------------    ----------------
     LT-A1        7.00% per annum         $131,586,000.00        June 25, 2033
     LT-A2        7.00% per annum         $ 95,033,000.00        June 25, 2033
     LT-A3        7.00% per annum         $  9,117,000.00        June 25, 2033
     LT-A4        7.00% per annum         $ 45,883,000.00        June 25, 2033
     LT-PO1       0.00% per annum         $  8,564,365.00        June 25, 2033
     LT-IO1         Variable(2)                  (3)             June 25, 2033
     LT-PO2       0.00% per annum         $  5,424,762.00        June 25, 2033
     LT-IO2         Variable(2)                  (3)             June 25, 2033
     LT-B1        7.00% per annum         $  4,333,400.00        June 25, 2033
     LT-B2        7.00% per annum         $  3,404,800.00        June 25, 2033
     LT-B3        7.00% per annum         $  2,476,200.00        June 25, 2033
     LT-B4        7.00% per annum         $  1,083,300.00        June 25, 2033
     LT-B5        7.00% per annum         $    773,700.00        June 25, 2033
     LT-B6        7.00% per annum         $  1,857,869.45        June 25, 2033
      LT-R        7.00% per annum         $        100.00        June 25, 2033
_______________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loan with the latest maturity date has been designated as
     the "latest possible maturity date" for each REMIC I Regular Interest.
(2)  Calculated in accordance with the definition of "REMIC I Remittance Rate"
     herein.
(3)  Uncertificated Notional Amount as set forth herein.

<PAGE>

                                    REMIC II
                                    --------

                  As provided herein, the Trustee will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
(as defined herein) for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC II". The Class R-II Interest will be the
sole class of "residual interests" in REMIC II for purposes of the REMIC
Provisions (as defined herein). The following table irrevocably sets forth the
designation, the Pass- Through Rate, the initial aggregate Certificate Principal
Balance and, solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC I
Regular Interests (as defined herein).

                                             Initial
                                      Aggregate Certificate   Latest Possible
Designation    Pass-Through Rate        Principal Balance     Maturity Date(1)
-----------    -----------------      ---------------------   ----------------
 Class A-1      4.00% per annum          $131,586,000.00       June 25, 2033
 Class A-2      4.00% per annum          $ 95,033,000.00       June 25, 2033
 Class A-3      4.00% per annum          $ 9,117,000.00        June 25, 2033
 Class A-4      4.00% per annum          $ 45,883,000.00       June 25, 2033
 Class S-1      3.00% per annum                (4)             June 25, 2033
 Class S-2      3.00% per annum                (4)             June 25, 2033
 Class PO-1        0.000%(2)             $ 8,564,365.00        June 25, 2033
 Class IO-1       Variable(3)                  (4)             June 25, 2033
 Class PO-2        0.000%(2)             $ 5,424,762.00        June 25, 2033
 Class IO-2       Variable(3)                  (4)             June 25, 2033
 Class B-1      7.00% per annum          $ 4,333,400.00        June 25, 2033
 Class B-2      7.00% per annum          $ 3,404,800.00        June 25, 2033
 Class B-3      7.00% per annum          $ 2,476,200.00        June 25, 2033
 Class B-4      7.00% per annum          $ 1,083,300.00        June 25, 2033
 Class B-5      7.00% per annum           $ 773,700.00         June 25, 2033
 Class B-6      7.00% per annum          $ 1,857,869.45        June 25, 2033
  Class R       7.00% per annum             $ 100.00           June 25, 2033
_______________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loan with the latest maturity date has been designated as
     the "latest possible maturity date" for each Class of Certificates.
(2)  The Class PO Certificates are not entitled to distributions of interest.
(3)  Calculated in accordance with the definition of "Pass-Through Rate" herein.
(4)  Initial Notional Amount. As provided herein, the Class S Certificates and
     the Class IO Certificates entitle the Holders thereof solely to
     distributions of interest accrued on the related Notional Amount of such
     Certificates. For federal income tax purposes, the Class IO-1 and Class
     IO-2 Certificates will not have Notional Amounts, but will be entitled to
     100% of amounts distributed on REMIC I Regular Interests LT-IO1 and LT-IO2,
     respectively.

                  As of the Cut-off Date, the Original Group I Mortgage Loans
had an aggregate Scheduled Principal Balance equal to $146,754,369.87. As of the
Cut-off Date, the Original Group II Mortgage Loans had an aggregate Scheduled
Principal Balance equal to $162,783,126.58.

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

                                       -2-

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01. Defined Terms.

                  Whenever used in this Agreement, including, without
limitation, in the Preliminary Statement hereto, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, all calculations
described herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months.

                  "Advancing Person": As defined in Section 3.26 hereof.

                  "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.

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

                  "Aggregate Senior Percentage": With respect to any
Distribution Date and the Class A Certificates, the lesser of (a) 100% and (b) a
fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of the Class A Certificates for such Distribution
Date and the denominator of which is the sum of (i) the aggregate of the
Non-Class PO Percentage of the Scheduled Principal Balance of each of the
Mortgage Loans, plus (ii) the aggregate of the Non-Class PO Percentage of the
Scheduled Principal Balance of each of the REO Properties, in each case before
reduction for any Realized Losses on such Distribution Date.

                  "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.

                  "Available Distribution Amount": The Group I Available
Distribution Amount or the Group II Available Distribution Amount, as the
context requires.

                  "Bankruptcy Amount": As of any date of determination, an
amount equal to the excess, if any, of (A) $150,000 over (B) the aggregate
amount of Bankruptcy Losses allocated solely to the Group I Subordinate
Certificates in accordance with Section 4.04.

                  "Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.

                                       -3-

<PAGE>

                  "Bankruptcy Loss": With respect to any Mortgage Loan, a
Realized Loss resulting from a Deficient Valuation or Debt Service Reduction.

                  "Book-Entry Certificate": Any Certificate registered in the
name of the Depository or its nominee. Initially, the Book-Entry Certificates
will be the Senior Certificates, the Class B-1 Certificates, the Class B-2
Certificates and the Class B-3 Certificates.

                  "Book-Entry Custodian": The custodian appointed pursuant to
Section 5.01.

                  "Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings and loan institutions in the State of
California, the State of Maryland or the State of New York, or in the city in
which either Corporate Trust Office of the Trustee is located, are authorized or
obligated by law or executive order to be closed.

                  "Cash-out Refinancing": A Refinanced Mortgage Loan the
proceeds of which are more than $1,000 in excess of the principal balance of any
existing first mortgage or subordinate mortgage on the related Mortgaged
Property and related closing costs.

                  "Certificate": Any one of the Citigroup Mortgage Loan Trust,
Series 2003-UP2, Mortgage Pass-Through Certificates issued under this Agreement.

                  "Certificate Factor": With respect to any Class of
Certificates as of any Distribution Date, a fraction, expressed as a decimal
carried to six places, the numerator of which is the aggregate Certificate
Principal Balance or Notional Amount of such Class of Certificates on such
Distribution Date (after giving effect to any distributions of principal and
allocations of Realized Losses and Extraordinary Trust Fund Expenses in
reduction of the Certificate Principal Balance or Notional Amount of such Class
of Certificates to be made on such Distribution Date), and the denominator of
which is the initial aggregate Certificate Principal Balance or Notional Amount
of such Class of Certificates as of the Closing Date.

                  "Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or a Non-United States Person shall not be a Holder of
a Residual Certificate for any purposes hereof and, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or the Master Servicer or any Affiliate thereof shall be
deemed not to be outstanding and the Voting Rights to which it is entitled shall
not be taken into account in determining whether the requisite percentage of
Voting Rights necessary to effect any such consent has been obtained, except as
otherwise provided in Section 11.01. The Trustee may conclusively rely upon a
certificate of the Depositor or the Master Servicer in determining whether a
Certificate is held by an Affiliate thereof. All references herein to "Holders"
or "Certificateholders" shall reflect the rights of Certificate Owners as they
may indirectly exercise such rights through the Depository and participating
members thereof, except as otherwise specified herein; PROVIDED, HOWEVER, that
the Trustee shall be required to recognize as a "Holder" or "Certificateholder"
only the Person in whose name a Certificate is registered in the Certificate
Register.

                                       -4-

<PAGE>

                  "Certificate Owner": With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Depository Participant or on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent.

                  "Certificate Principal Balance": With respect to any
Certificate (other than a Class S Certificate or Class IO Certificate), as of
any date of determination, the Certificate Principal Balance of such Certificate
on the Distribution Date immediately prior to such date of determination,
reduced by the aggregate of (a) all distributions of principal made thereon on
such immediately prior Distribution Date and (b) without duplication of amounts
described in clause (a) above, reductions in the Certificate Principal Balance
thereof in connection with allocations thereto of Realized Losses on the
Mortgage Loans and Extraordinary Trust Fund Expenses on such immediately prior
Distribution Date (or, in the case of any date of determination up to and
including the initial Distribution Date, the initial Certificate Principal
Balance of such Certificate, as stated on the face thereof); PROVIDED, HOWEVER,
that the Certificate Principal Balance of the Class of Subordinate Certificates
outstanding with the highest numerical designation at any given time shall not
be greater than the Percentage Interest evidenced by such Certificate multiplied
by the excess, if any, of (A) the then aggregate Stated Principal Balance of the
Mortgage Loans over (B) the then aggregate Certificate Principal Balances of all
other Classes of Certificates then outstanding. The Class S Certificates and the
Class IO Certificates shall not have Certificate Principal Balances and shall
not be entitled to any distributions of principal.

                  "Certificate Register": The register maintained pursuant to
Section 5.02.

                  "Class": Collectively, all of the Certificates bearing the
same class designation.

                  "Class A Certificate": Any Class A-1 Certificate, Class A-2
Certificate, Class A-3 Certificate or Class A-4 Certificate.

                  "Class A Principal Adjustment Amount": As to any Distribution
Date on which there is an Undercollateralized Loan Group and the Certificate
Principal Balance of the Class A Certificates in the Overcollateralized Loan
Group has been reduced to zero, the remaining Senior Principal Distribution
Amount for the Overcollateralized Loan Group after reducing the Certificate
Principal Balance of the Class A Certificates in the Overcollateralized Loan
Group to zero.

                  "Class A-1 Certificate": Any one of the Class A-1 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-1 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class A-2 Certificate": Any one of the Class A-2 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-2 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class A-2 Principal Distribution Percentage": With respect to
any Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (i) the Certificate Principal Balance of the Class A-2 Certificates
immediately prior to such Distribution Date, and the denominator of

                                       -5-

<PAGE>

which is (ii) the aggregate Certificate Principal Balance of the Group II Class
A Certificates immediately prior to such Distribution Date.

                  "Class A-3 Certificate": Any one of the Class A-3 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-3 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class A-4 Certificate": Any one of the Class A-4 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-4 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class A-4 Principal Distribution Amount": With respect to any
Distribution Date, an amount equal to the greater of (i) $571,500 and (ii) the
product of (a) $12,800 and (b) the number of months elapsed since the Closing
Date divided by 2.

                  "Class B Percentage": Any one of the Class B-1 Percentage, the
Class B-2 Percentage, the Class B-3 Percentage, the Class B-4 Percentage, the
Class B-5 Percentage or the Class B-6 Percentage.

                  "Class B-1 Certificate": Any one of the Class B-1 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-11 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class B-1 Percentage": With respect to any Distribution Date,
a fraction, expressed as a percentage, the numerator of which is the excess, if
any, of the aggregate Certificate Principal Balance of the Class B-1
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class B-1 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the aggregate Certificate
Principal Balance of the Subordinate Certificates immediately prior to such
date.

                  "Class B-2 Certificate": Any one of the Class B-2 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-12 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class B-2 Percentage": With respect to any Distribution Date,
a fraction, expressed as a percentage, the numerator of which is the excess, if
any, of the aggregate Certificate Principal Balance of the Class B-2
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class B-2 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the aggregate Certificate
Principal Balance of the Subordinate Certificates immediately prior to such
date.

                  "Class B-3 Certificate": Any one of the Class B-3 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-13 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                                       -6-

<PAGE>

                  "Class B-3 Percentage": With respect to any Distribution Date,
a fraction, expressed as a percentage, the numerator of which is the excess, if
any, of the aggregate Certificate Principal Balance of the Class B-3
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class B-3 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the aggregate Certificate
Principal Balance of the Subordinate Certificates immediately prior to such
date.

                  "Class B-4 Certificate": Any one of the Class B-4 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-14 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class B-4 Percentage": With respect to any Distribution Date,
a fraction, expressed as a percentage, the numerator of which is the excess, if
any, of the aggregate Certificate Principal Balance of the Class B-4
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class B-4 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the aggregate Certificate
Principal Balance of the Subordinate Certificates immediately prior to such
date.

                  "Class B-5 Certificate": Any one of the Class B-5 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-15 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class B-5 Percentage": With respect to any Distribution Date,
a fraction, expressed as a percentage, the numerator of which is the excess, if
any, of the aggregate Certificate Principal Balance of the Class B-5
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class B-5 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the aggregate Certificate
Principal Balance of the Subordinate Certificates immediately prior to such
date.

                  "Class B-6 Certificate": Any one of the Class B-6 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-16 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class B-6 Percentage": With respect to any Distribution Date,
a fraction, expressed as a percentage, the numerator of which is the excess, if
any, of the aggregate Certificate Principal Balance of the Class B-6
Certificates immediately prior to such date over the aggregate amount, if any,
payable to the Holders of the Class B-6 Certificates on such date pursuant to
Section 4.01(b)(i)(Z), and the denominator of which is the aggregate Certificate
Principal Balance of the Subordinate Certificates immediately prior to such
date.

                  "Class IO Certificate": Any Class IO-1 Certificate or Class
IO-2 Certificate.

                  "Class IO Mortgage Loan": Each Group I Mortgage Loan and Group
II Mortgage Loan with a Net Mortgage Rate equal to or greater than 7.00% per
annum as of the Cut-off Date.

                                       -7-

<PAGE>

                  "Class IO-1 Certificate": Any one of the Class IO-1
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-7 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions. The Class IO-1 Certificates shall
not have a Certificate Principal Balance and shall not be entitled to any
distributions of principal.

                  "Class IO-2 Certificate": Any one of the Class IO-2
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-8 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions. The Class IO-2 Certificates shall
not have a Certificate Principal Balance and shall not be entitled to any
distributions of principal.

                  "Class PO Certificate": Any Class PO-1 Certificate or Class
PO-2 Certificate.

                  "Class PO-1 Certificate": Any one of the Class PO-1
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-9 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class PO-2 Certificate": Any one of the Class PO-2
Certificates executed, authenticated and delivered by the Trustee, substantially
in the form annexed hereto as Exhibit A-10 and evidencing a Regular Interest in
REMIC II for purposes of the REMIC Provisions.

                  "Class PO Mortgage Loan": Each Group I Mortgage Loan and Group
II Mortgage Loan with a Net Mortgage Rate below 7.00% per annum as of the
Cut-off Date.

                  "Class PO Principal Distribution Amount": For any Distribution
Date, an amount equal to the aggregate of:

                  (a)      the sum of the following:

                           (i) the Class PO-1 Percentage or the Class PO-2
                  Percentage, as applicable, of the principal portion of each
                  Monthly Payment due during the related Due Period in respect
                  of each related Class PO Mortgage Loan whether or not
                  received;

                           (ii) the Class PO-1 Percentage or the Class PO-2
                  Percentage, as applicable, of the principal portion of all
                  Insurance Proceeds and Liquidation Proceeds (other than
                  amounts described in clause (c) below) received in respect of
                  each related Class PO Mortgage Loan during the related
                  Prepayment Period (other than any such related Class PO
                  Mortgage Loan that was purchased, sold or replaced pursuant to
                  or as contemplated by Section 2.03, Section 3.16(c) or Section
                  9.01 during the related Prepayment Period), net of any portion
                  thereof that represents a recovery of principal for which an
                  advance was made by the Master Servicer pursuant to Section
                  4.03 in respect of a preceding Distribution Date;

                                       -8-

<PAGE>

                           (iii) the Class PO-1 Percentage or the Class PO-2
                  Percentage, as applicable, of the Stated Principal Balance
                  (calculated immediately prior to such Distribution Date) of
                  each related Class PO Mortgage Loan that was purchased, sold
                  or replaced pursuant to or as contemplated by Section 2.03,
                  Section 3.16(c) or Section 9.01 during the related Prepayment
                  Period;

                           (iv) the Class PO-1 Percentage or the Class PO-2
                  Percentage, as applicable, of all REO Principal Amortization
                  collected in respect of any REO Property during the related
                  Prepayment Period; and

                           (v) in connection with the substitution of one or
                  more Qualified Substitute Mortgage Loans for one or more
                  Deleted Mortgage Loans which were Class PO Mortgage Loans
                  pursuant to Section 2.03 during the related Prepayment Period,
                  the excess, if any, of (A) the Class PO-1 Percentage or the
                  Class PO-2 Percentage, as applicable, of the aggregate of the
                  Stated Principal Balances (calculated as of the respective
                  dates of substitution) of such Deleted Mortgage Loans, net of
                  the aggregate of the Class PO-1 Percentage or the Class PO-2
                  Percentage, as applicable, of the principal portions of the
                  Monthly Payments due during the related Prepayment Period (to
                  the extent received from the related Mortgagor or advanced by
                  the Master Servicer and distributed pursuant to Section 4.01
                  on the Distribution Date in the related Prepayment Period) in
                  respect of each such Deleted Mortgage Loan that was replaced
                  prior to the Distribution Date in the related Prepayment
                  Period, over (B) the Class PO-1 Percentage or the Class PO-2
                  Percentage, as applicable, of the Stated Principal Balances
                  (calculated as of the respective dates of substitution) of
                  such Qualified Substitute Mortgage Loans;

                  (b) the Class PO-1 Percentage or the Class PO-2 Percentage, as
         applicable, of all Principal Prepayments received in respect of each
         related Class PO Mortgage Loan during the related Prepayment Period;

                  (c) with respect to any related Class PO Mortgage Loan which
         was the subject of a Final Recovery Determination in the related
         Prepayment Period, the Class PO-1 Percentage or the Class PO-2
         Percentage, as applicable, of the Stated Principal Balance of such
         Mortgage Loan at the time of such Final Recovery Determination (net of
         the principal portion of any Realized Loss allocated to the related
         Class PO Certificates) to the extent of the principal portion of all
         Liquidation Proceeds with respect to such related Class PO Mortgage
         Loan; and

                  (d) in the case of any Distribution Date subsequent to the
         initial Distribution Date, an amount equal to the excess, if any, of
         the related Class PO Principal Distribution Amount for the immediately
         preceding Distribution Date, over the aggregate distributions of
         principal made in respect of the related Class PO Certificates on such
         immediately preceding Distribution Date pursuant to Section 4.01 to the
         extent that any such amounts are not attributable to Realized Losses
         which were allocated to the Subordinate Certificates pursuant to
         Section 4.04.

                                       -9-

<PAGE>

                  The Class PO Principal Distribution Amount shall only consist
of scheduled and unscheduled principal received on the Mortgage Loans.

                  "Class PO-1 Percentage": With respect to each Class PO
Mortgage Loan in Loan Group I, the quotient of (i) 7.00% per annum minus the
related Net Mortgage Rate divided by (ii) 7.00% per annum. With respect to each
Class IO Mortgage Loan in Loan Group I, 0.000% per annum.

                  "Class PO-2 Percentage": With respect to each Class PO
Mortgage Loan in Loan Group II, the quotient of (i) 7.00% per annum minus the
related Net Mortgage Rate divided by (ii) 7.00% per annum. With respect to each
Class IO Mortgage Loan in Loan Group II, 0.000% per annum.

                  "Class R Certificate": Any one of the Class R Certificates
executed, authenticated and delivered by the Trust Administrator, substantially
in the form annexed hereto as Exhibit A-17 and evidencing the ownership of the
Class R-I Interest and the Class R-II Interest.

                  "Class R-I Interest": The Residual Interest in REMIC I for
purposes of the REMIC Provisions.

                  "Class R-II Interest": The Residual Interest in REMIC II for
purposes of the REMIC Provisions.

                  "Class S Certificate": Any Class S-1 Certificate or Class S-2
Certificate.

                  "Class S-1 Certificate": Any one of the Class S-1 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-5 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions. The Class S-1 Certificates shall not have a
Certificate Principal Balance and shall not be entitled to any distributions of
principal.

                  "Class S-2 Certificate": Any one of the Class S-2 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-6 and evidencing a Regular Interest in REMIC II for
purposes of the REMIC Provisions. The Class S-2 Certificates shall not have a
Certificate Principal Balance and shall not be entitled to any distributions of
principal.

                  "Closing Date": July 30, 2003.

                  "Code": The Internal Revenue Code of 1986.

                  "Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled, "Union Planters Mortgage, Inc., as Master Servicer for Wells Fargo
Bank Minnesota, National Association, as Trustee, in trust for the registered
holders of Citigroup Mortgage Loan Trust, Series 2003-UP2, Mortgage Pass-Through
Certificates." The Collection Account must be an Eligible Account.

                                      -10-

<PAGE>

                  "Commission": The Securities and Exchange Commission.

                  "Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at (i) for Certificate transfer
purposes, Sixth Street and Marquette Avenue, MAC N 9303-121, Minneapolis,
Minnesota 55479, Attention: SBMSVII, Series 2003-UP2 and (ii) for all other
purposes, 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention: SBMSVII
Series 2003-UP2, or at such other address as the Trustee may designate from time
to time by notice to the Certificateholders, the Depositor, the Master Servicer
and the Seller.

                  "Corresponding Certificate": With respect to the REMIC I
Regular Interests, the Regular Certificate or Residual Certificate, as
applicable, corresponding such REMIC I Regular Interest as set forth below:

                                            Regular Certificate or Residual
         REMIC I Regular Interest                     Certificate
      -------------------------------       -------------------------------
      REMIC I Regular Interest LT-A1            Class A-1 Certificates
      REMIC I Regular Interest LT-A2            Class A-2 Certificates
      REMIC I Regular Interest LT-A3            Class A-3 Certificates
      REMIC I Regular Interest LT-A4            Class A-4 Certificates
      REMIC I Regular Interest LT-PO1           Class PO-1 Certificates
      REMIC I Regular Interest LT-PO2           Class PO-2 Certificates
      REMIC I Regular Interest LT-IO1           Class IO-1 Certificates
      REMIC I Regular Interest LT-IO1           Class IO-1 Certificates
      REMIC I Regular Interest LT-B1            Class B-1 Certificates
      REMIC I Regular Interest LT-B2            Class B-2 Certificates
      REMIC I Regular Interest LT-B3            Class B-3 Certificates
      REMIC I Regular Interest LT-B4            Class B-4 Certificates
      REMIC I Regular Interest LT-B5            Class B-5 Certificates
      REMIC I Regular Interest LT-B6            Class B-6 Certificates
       REMIC I Regular Interest LT-R             Class R Certificates
..
                  "Cross-Collateralization Date": Any Distribution Date on which
there exists an Undercollateralizated Loan Group and an Overcollateralized Loan
Group.

                  "Cut-off Date": With respect to each Original Mortgage Loan,
July 1, 2003. With respect to all Qualified Substitute Mortgage Loans, their
respective dates of substitution. References herein to the "Cut-off Date," when
used with respect to more than one Mortgage Loan, shall be to the respective
Cut-off Dates for such Mortgage Loans.

                  "Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.

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

                                      -11-

<PAGE>

principal balance of the Mortgage Loan, which valuation results from a
proceeding initiated under the Bankruptcy Code.

                  "Definitive Certificates": As defined in Section 5.01(b).

                  "Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.

                  "Depositor": Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation, or its successor in interest.

                  "Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository, for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
CEDE & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended.

                  "Depository Institution": Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated "A-1" or better by S&P or "P-1" or better by Moody's, if rated by
Moody's (or comparable ratings if S&P and Moody's are not the Rating Agencies).

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

                  "Determination Date": With respect to each Distribution Date,
the 13th day of the calendar month in which such Distribution Date occurs or, if
such 13th day is not a Business Day, the Business Day immediately preceding such
13th day.

                  "Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by REMIC I, other than
through an Independent Contractor; PROVIDED, HOWEVER, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.

                  "Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are

                                      -12-

<PAGE>

subject to tax and, except for Freddie Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an "electing
large partnership" within the meaning of Section 775 of the Code and (vi) any
other Person so designated by the Trustee based upon an Opinion of Counsel that
the holding of an Ownership Interest in a Residual Certificate by such Person
may cause REMIC I or any Person having an Ownership Interest in any Class of
Certificates (other than such Person) to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the Transfer
of an Ownership Interest in a Residual Certificate to such Person. The terms
"United States," "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.

                  "Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Wells Fargo Bank Minnesota, National Association, as Trustee, in trust
for the registered holders of Citigroup Mortgage Loan Trust, Series 2003-UP2,
Mortgage Pass-Through Certificates." The Distribution Account must be an
Eligible Account.

                  "Distribution Date": The 25th day of any month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in August 2003.

                  "Diverted Interest Amount": With respect to any Distribution
Date, one month's interest accrued during the related Interest Accrual Period on
the Overcollateralized Amount at the Pass-Through Rate for the Class A
Certificates related to the Undercollateralized Loan Group and any other unpaid
interest shortfalls on the Class A Certificates related to the
Undercollateralized Loan Group, to the extent available.

                  "DOL": The United States Department of Labor or any successor
in interest.

                  "DOL Regulations": The regulations promulgated by the DOL at
29 C.F.R.ss.2510.3- 101.

                  "Due Date": With respect to each Distribution Date, the first
day of the calendar month in which such Distribution Date occurs, which is the
day of the month on which the Monthly Payment is due on a Mortgage Loan,
exclusive of any days of grace (or, in the case of any Mortgage Loan which has
its Monthly Payment due on a day each calendar month other than the first day of
each calendar month, the date that such Monthly Payment due and which falls
within the Due Period relating to such Distribution Date).

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

                                      -13-

<PAGE>

                  "Eligible Account": Any of (i) an account or accounts
maintained with a Depository Institution, (ii) an account or accounts the
deposits in which are fully insured by the FDIC or (iii) a trust account or
accounts maintained with the corporate trust department of a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity. Eligible Accounts may bear interest.

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

                  "Estate in Real Property": A fee simple estate in a parcel of
land.

                  "Excess Bankruptcy Loss": Any Bankruptcy Loss, or portion
thereof, which exceeds the then applicable Bankruptcy Amount.

                  "Excess Diverted Interest Reserve Account": The account
established and maintained pursuant to Section 4.08.

                  "Excess Diverted Interest Reserve Amount": With respect to the
Class A Certificates and any Distribution Date, an amount equal to the excess,
if any, of (i) one month's interest accrued during the related Interest Accrual
Period on the Overcollateralized Amount at the Pass-Through Rate for the Class A
Certificates relating to the Overcollateralized Loan Group over (ii) the
Diverted Interest Amount.

                  "Excess Fraud Loss": Any Fraud Loss, or portion thereof, which
exceeds the then applicable Fraud Loss Amount.

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

                  "Excess Special Hazard Loss": Any Special Hazard Loss, or
portion thereof, that exceeds the then applicable Special Hazard Amount.

                  "Extraordinary Loss": Any Realized Loss or portion thereof
caused by or resulting from:

                  (i) nuclear or chemical reaction or nuclear radiation or
         radioactive or chemical contamination, all whether controlled or
         uncontrolled and whether such loss be direct or indirect, proximate or
         remote or be in whole or in part caused by, contributed to or
         aggravated by a peril covered by the definition of the term "Special
         Hazard Loss";

                  (ii) hostile or warlike action in time of peace or war,
         including action in hindering, combating or defending against an
         actual, impending or expected attack by any government or sovereign
         power, DE JURE or DE FACTO, or by any authority maintaining or using
         military, naval or air forces, or by military, naval or air forces, or
         by an agent of any such government, power, authority or forces;

                                      -14-

<PAGE>

                  (iii) any weapon of war employing atomic fission or
         radioactive forces whether in time of peace or war, and

                  (iv) insurrection, rebellion, revolution, civil war, usurped
         power or action taken by governmental authority in hindering, combating
         or defending against such an occurrence, seizure or destruction under
         quarantine or customs regulations, confiscation by order of any
         government or public authority, or risks of contraband or illegal
         transactions or trade.

                  "Extraordinary Trust Fund Expenses": Any amounts reimbursable
to the Master Servicer or the Depositor pursuant to Section 6.03, any amounts
payable from the Distribution Account in respect of taxes pursuant to Section
10.01(g)(iii), any amounts reimbursable to the Trustee from the Trust Fund
pursuant to Section 2.01, Section 7.02 or Section 8.05 and any other costs,
expenses, liabilities and losses borne by the Trust Fund (exclusive of any cost,
expense, liability or loss that is specific to a particular Mortgage Loan or REO
Property and is taken into account in calculating a Realized Loss in respect
thereof) for which the Trust Fund has not and, in the reasonable good faith
judgment of the Trustee, shall not, obtain reimbursement or indemnification from
any other Person.

                  "Fannie Mae": Fannie Mae, formerly known as the Federal
National Mortgage Association, or any successor thereto.

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

                  "Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Seller, the Depositor or the Master Servicer pursuant to or as
contemplated by Section 2.03, Section 3.16(c) or Section 9.01), a determination
made by the Master Servicer that all Liquidation Proceeds have been recovered.
The Master Servicer shall maintain records of each Final Recovery Determination
made thereby.

                  "Fraud Loss": Any Realized Loss or portion thereof sustained
by reason of a default arising from intentional fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan, including by
reason of the denial of coverage under any related Primary Mortgage Insurance
Policy.

                  "Fraud Loss Amount": As of any date of determination after the
Cut-off Date, an amount equal to: (x) prior to the first anniversary of the
Cut-off Date an amount equal to 2.00% of the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date minus the aggregate amount of Fraud Losses
on the Mortgage Loans allocated solely to the Subordinate Certificates in
accordance with Section 4.04 since the Cut-off Date up to such date of
determination and (y) from the first to the fifth anniversary of the Cut-off
Date, an amount equal to (1) the lesser of (a) the Fraud Loss Amount as of the
most recent anniversary of the Cut-off Date and (b) 1.00% of the aggregate
outstanding principal balance of all of the Mortgage Loans as of the most recent
anniversary of the Cut-off Date minus (2) the Fraud Losses on the Mortgage Loans
allocated solely to the Subordinate Certificates in accordance with Section 4.04
since the Cut-off Date up to such date of determination.

                                      -15-

<PAGE>

In addition, after the Certificate Principal Balances of the Subordinate
Certificates are reduced to zero, the Fraud Loss Amount will be zero.

                  "Freddie Mac": Freddie Mac, formally known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.

                  "Group I Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in the Collection Account and Distribution Account with
respect to the Group I Mortgage Loans as of the close of business on the related
Determination Date, (b) the aggregate of any amounts received in respect of an
REO Property relating to a Group I Mortgage Loans withdrawn from any REO Account
and deposited in the Distribution Account for such Distribution Date pursuant to
Section 3.23, (c) the aggregate of any amounts deposited in the Distribution
Account by the Master Servicer in respect of Prepayment Interest Shortfalls on
the Group I Mortgage Loans for such Distribution Date pursuant to Section 3.24
and (d) the aggregate of any P&I Advances made by the Master Servicer for such
Distribution Date with respect to the Group I Mortgage Loans pursuant to Section
4.03, reduced (to not less than zero) by (2) the portion of the amount described
in clause (1)(a) above that represents (i) Monthly Payments on the Group I
Mortgage Loans received from a Mortgagor on or prior to the Determination Date
but due during any Due Period subsequent to the related Due Period, (ii)
Principal Prepayments on the Group I Mortgage Loans received after the related
Prepayment Period (together with any interest payments received with such
Principal Prepayments to the extent they represent the payment of interest
accrued on the Group I Mortgage Loans during a period subsequent to the related
Prepayment Period), (iii) Liquidation Proceeds and Insurance Proceeds received
in respect of the Group I Mortgage Loans after the related Prepayment Period,
(iv) amounts reimbursable or payable with respect to the Group I Mortgage Loans
to the Depositor, the Master Servicer, the Trustee, the Seller or any
Sub-Servicer pursuant to Section 3.11(a) or Section 3.12 or otherwise payable in
respect of Extraordinary Trust Fund Expenses and (v) amounts deposited in the
Collection Account or the Distribution Account in error with respect to the
Group I Mortgage Loans. Notwithstanding the foregoing, the Group I Available
Distribution Amount for any Distribution Date shall be increased (in the case of
an Undercollateralized Loan Group with respect to Loan Group I) or decreased (in
the case of an Overcollateralized Loan Group with respect to Loan Group I) by
any applicable Diverted Interest Amount or Class A Principal Adjustment Amount,
in each case for such Distribution Date. The Group I Available Distribution
Amount shall not include any Prepayment Interest Excess related to the Group I
Mortgage Loans.

                  "Group I Excess Diverted Interest Reserve Deposit": An amount
withdrawn from the Excess Diverted Interest Reserve Account equal to the lesser
of (i) the amount on deposit in the Excess Diverted Interest Reserve Account and
(ii) the sum of (a) any interest shortfalls on the Class A-1 Certificates and
(b) the aggregate amount of Realized Losses on the Group I Mortgage Loans on
such Distribution Date.

                  "Group I Mortgage Loan": A first lien fixed-rate Mortgage Loan
with an original term to maturity up to 180 months. The Group I Mortgage Loans
are identified as such on the Mortgage Loan Schedule.

                                      -16-

<PAGE>

                  "Group I Senior Certificates": The Class A-1 Certificates, the
Class S-1 Certificates, the Class IO-1 Certificates and the Class PO-1
Certificates.

                  "Group I Senior Percentage": With respect to any Distribution
Date and the Class A-1 Certificates, the lesser of (a) 100% and (b) a fraction,
expressed as a percentage, the numerator of which is the excess, if any, of the
aggregate Certificate Principal Balance of the Class A-1 Certificates for such
Distribution Date over the aggregate amount, if any, payable to the Holders of
the Class A-1 Certificates on such date pursuant to clause (d) of the definition
of "Senior Principal Distribution Amount," and the denominator of which is the
sum of (i) the aggregate of the Non-Class PO Percentage of the Scheduled
Principal Balance of each of the Group I Mortgage Loans, plus (ii) the aggregate
of the Non-Class PO Percentage of the Scheduled Principal Balance of each of the
REO Properties in Loan Group I, in each case before reduction for any Realized
Losses on such Distribution Date.

                  Notwithstanding the foregoing, on any Cross-Collateralization
Date on which the aggregate Scheduled Principal Balance of the Group I Mortgage
Loans exceed the Certificate Principal Balance of the Class A-1 Certificates,
the Group I Senior Percentage will equal the sum of the Certificate Principal
Balance of the Class A-1 Certificates immediately prior to such Distribution
Date plus the Overcollateralized Amount divided by the aggregate of the
Non-Class PO Percentage of the Scheduled Principal Balances of the Group I
Mortgage Loans immediately prior to such Distribution Date. On any Distribution
Date after the reduction of the Certificate Principal Balance of the Group II
Class A Certificates to zero, the Group I Senior Percentage will be a percentage
equal to the Certificate Principal Balance of the Class A-1 Certificates
immediately prior to such Distribution Date divided by the aggregate of the
Non-Class PO Percentages of the Scheduled Principal Balances of all of the
Mortgage Loans immediately prior to such Distribution Date.

                  "Group I Senior Prepayment Percentage": With respect to any
Distribution Date and within the range indicated below, the percentage as
indicated below:

        Distribution Date                      Senior Prepayment Percentage
-----------------------------        -------------------------------------------
August 2003 through July 2008        100%
August 2008 through July 2009        Group I Senior Percentage plus 70% of the
                                     Group I Subordinate Percentage
August 2009 through July 2010        Group I Senior Percentage plus 60% of the
                                     Group I Subordinate Percentage
August 2010 through July 2011        Group I Senior Percentage plus 40% of the
                                     Group I Subordinate Percentage
August 2011 through July 2012        Group I Senior Percentage plus 20% of the
                                     Group I Subordinate Percentage
August 2012 and thereafter           Group I Senior Percentage

PROVIDED, HOWEVER, no reduction to the Group I Senior Prepayment Percentage
described above shall be made as of any Distribution Date unless (i) the
outstanding principal balance of the Mortgage Loans delinquent 60 days or more
(including REO Properties and Mortgage Loans in foreclosure) averaged over the
last six months does not exceed 50% of the sum of the then current Certificate

                                      -17-

<PAGE>

Principal Balances of the Subordinate Certificates and (ii) Realized Losses on
the Mortgage Loans to date are less than the then applicable Trigger Amount.

                  On any Distribution Date on which Realized Losses on the
Mortgage Loans to date are greater than the then applicable Trigger Amount, the
Group I Senior Prepayment Percentage will be the greater of (x) the Group I
Senior Prepayment Percentage for such Distribution Date or (y) the Group I
Senior Prepayment Percentage for the immediately preceding Distribution Date.

                  On any Distribution Date on which the Aggregate Senior
Percentage exceeds the initial Aggregate Senior Percentage, the Group I Senior
Prepayment Percentage shall be 100%.

                  "Group I Subordinate Percentage": With respect to the
Subordinate Certificates and any Distribution Date, a percentage equal to 100%
minus the Group I Senior Percentage.

                  "Group I Subordinate Prepayment Percentage": With respect to
the Subordinate Certificates and any Distribution Date, 100% minus the Group I
Senior Prepayment Percentage for such Distribution Date.

                  "Group II Available Distribution Amount": With respect to any
Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the
amounts on deposit in the Collection Account and Distribution Account with
respect to the Group II Mortgage Loans as of the close of business on the
related Determination Date, (b) the aggregate of any amounts received in respect
of an REO Property relating to a Group II Mortgage Loans withdrawn from any REO
Account and deposited in the Distribution Account for such Distribution Date
pursuant to Section 3.23, (c) the aggregate of any amounts deposited in the
Distribution Account by the Master Servicer in respect of Prepayment Interest
Shortfalls on the Group II Mortgage Loans for such Distribution Date pursuant to
Section 3.24 and (d) the aggregate of any P&I Advances made by the Master
Servicer for such Distribution Date with respect to the Group II Mortgage Loans
pursuant to Section 4.03, reduced (to not less than zero) by (2) the portion of
the amount described in clause (1)(a) above that represents (i) Monthly Payments
on the Group II Mortgage Loans received from a Mortgagor on or prior to the
Determination Date but due during any Due Period subsequent to the related Due
Period, (ii) Principal Prepayments on the Group II Mortgage Loans received after
the related Prepayment Period (together with any interest payments received with
such Principal Prepayments to the extent they represent the payment of interest
accrued on the Group II Mortgage Loans during a period subsequent to the related
Prepayment Period), (iii) Liquidation Proceeds and Insurance Proceeds received
in respect of the Group II Mortgage Loans after the related Prepayment Period,
(iv) amounts reimbursable or payable with respect to the Group II Mortgage Loans
to the Depositor, the Master Servicer, the Trustee, the Seller or any
Sub-Servicer pursuant to Section 3.11(a) or Section 3.12 or otherwise payable in
respect of Extraordinary Trust Fund Expenses and (v) amounts deposited in the
Collection Account or the Distribution Account in error with respect to the
Group II Mortgage Loans. Notwithstanding the foregoing, the Group II Available
Distribution Amount for any Distribution Date shall be increased (in the case of
an Undercollateralized Loan Group with respect to Loan Group II) or decreased
(in the case of an Overcollateralized Loan Group with respect to Loan Group II)
by any applicable Diverted Interest Amount or Class A Principal Adjustment
Amount, in each case for such Distribution Date. The Group II Available
Distribution Amount shall not include any Prepayment Interest Excess related to
the Group II Mortgage Loans.

                                      -18-

<PAGE>

                  "Group II Class A Certificates": The Class A-2 Certificates,
the Class A-3 Certificates and the Class A-4 Certificates.

                  "Group II Excess Diverted Interest Reserve Deposit": An amount
withdrawn from the Excess Diverted Interest Reserve Account equal to the lesser
of (i) the amount on deposit in the Excess Diverted Interest Reserve Account and
(ii) the sum of (a) any interest shortfalls on the Group II Class A Certificates
and (b) the aggregate amount of Realized Losses on the Group II Mortgage Loans
on such Distribution Date.

                  "Group II Mortgage Loan": A first lien fixed-rate Mortgage
Loan with an original term to maturity greater than 180 months and up to 360
months. The Group II Mortgage Loans are identified as such on the Mortgage Loan
Schedule.

                  "Group II Senior Certificates": The Group II Class A
Certificates, the Class S-2 Certificates, the Class IO-2 Certificates and the
Class PO-2 Certificates.

                  "Group II Senior Percentage": With respect to any Distribution
Date and the Group II Class A Certificates, the lesser of (a) 100% and (b) a
fraction, expressed as a percentage, the numerator of which is the excess, if
any, of the aggregate Certificate Principal Balance of the Group II Class A
Certificates and the Residual Certificates for such Distribution Date over the
aggregate amount, if any, payable to the Holders of the Group II Class A
Certificates on such date pursuant to clause (d) of the definition of "Senior
Principal Distribution Amount," and the denominator of which is the sum of (i)
the aggregate of the Non-Class PO Percentage of the Scheduled Principal Balance
of each of the Group II Mortgage Loans, plus (ii) the aggregate of the Non-Class
PO Percentage of the Scheduled Principal Balance of each of the REO Properties
in Loan Group II, in each case before reduction for any Realized Losses on such
Distribution Date.

                  Notwithstanding the foregoing, on any Cross-Collateralization
Date on which the aggregate Scheduled Principal Balance of the Group II Mortgage
Loans exceed the aggregate Certificate Principal Balance of the Group II Class A
Certificates, the Group II Senior Percentage will equal the sum of the aggregate
Certificate Principal Balance of the Group II Class A Certificates immediately
prior to such Distribution Date plus the Overcollateralized Amount divided by
the aggregate of the Non-Class PO Percentage of the Scheduled Principal Balances
of the Group II Mortgage Loans immediately prior to such Distribution Date. On
any Distribution Date after the reduction of the Certificate Principal Balance
of the Class A-1 Certificates to zero, the Group II Senior Percentage will be a
percentage equal to the aggregate Certificate Principal Balance of the Group II
Class A Certificates immediately prior to such Distribution Date divided by the
aggregate of the Non-Class PO Percentages of the Scheduled Principal Balances of
all of the Mortgage Loans immediately prior to such Distribution Date.

                  "Group II Senior Prepayment Percentage": With respect to any
Distribution Date and within the range indicated below, the percentage as
indicated below:

       Distribution Date                 Senior Prepayment Percentage
-----------------------------         ------------------------------------------
August 2003 through July 2008         100%

                                      -19-

<PAGE>

August 2008 through July 2009         Group II Senior Percentage plus 70% of the
                                      Group II Subordinate Percentage
August 2009 through July 2010         Group II Senior Percentage plus 60% of the
                                      Group II Subordinate Percentage
August 2010 through July 2011         Group II Senior Percentage plus 40% of the
                                      Group II Subordinate Percentage
August 2011 through July 2012         Group II Senior Percentage plus 20% of the
                                      Group II Subordinate Percentage
August 2012 and thereafter            Group II Senior Percentage

PROVIDED, HOWEVER, no reduction to the Group II Senior Prepayment Percentage
described above shall be made as of any Distribution Date unless (i) the
outstanding principal balance of the Mortgage Loans delinquent 60 days or more
(including REO Properties and Mortgage Loans in foreclosure) averaged over the
last six months does not exceed 50% of the sum of the then current Certificate
Principal Balances of the Subordinate Certificates and (ii) Realized Losses on
the Mortgage Loans to date are less than the then applicable Trigger Amount.

                  On any Distribution Date on which Realized Losses on the
Mortgage Loans to date are greater than the then applicable Trigger Amount, the
Group II Senior Prepayment Percentage will be the greater of (x) the Group II
Senior Prepayment Percentage for such Distribution Date or (y) the Group II
Senior Prepayment Percentage for the immediately preceding Distribution Date.

                  On any Distribution Date on which the Aggregate Senior
Percentage exceeds the initial Aggregate Senior Percentage, the Group II Senior
Prepayment Percentage shall be 100%.

                  "Group II Subordinate Percentage": With respect to the
Subordinate Certificates and any Distribution Date, a percentage equal to 100%
minus the Group II Senior Percentage.

                  "Group II Subordinate Prepayment Percentage": With respect to
the Subordinate Certificates and any Distribution Date, 100% minus the Group II
Senior Prepayment Percentage for such Distribution Date.

                  "Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer and their respective Affiliates, (b) does not have any direct financial
interest in or any material indirect financial interest in the Depositor, the
Master Servicer or any Affiliate thereof, and (c) is not connected with the
Depositor, the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; PROVIDED, HOWEVER, that a Person shall not fail to be Independent of
the Depositor, the Master Servicer or any Affiliate thereof merely because such
Person is the beneficial owner of 1% or less of any class of securities issued
by the Depositor or the Master Servicer or any Affiliate thereof, as the case
may be.

                  "Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an "independent contractor" with respect to
REMIC I within the meaning of Section 856(d)(3) of the Code if REMIC I were a
real estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35% or more of any Class of Certificates), so long as REMIC I does
not receive or derive any income

                                      -20-

<PAGE>

from such Person and provided that the relationship between such Person and the
Trust Fund is at arm's length, all within the meaning of Treasury Regulation
Section 1.856-4(b)(5), or (ii) any other Person (including the Master Servicer)
if the Trustee has received an Opinion of Counsel to the effect that the taking
of any action in respect of any REO Property by such Person, subject to any
conditions therein specified, that is otherwise herein contemplated to be taken
by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code), or cause any income realized in respect of such
REO Property to fail to qualify as Rents from Real Property.

                  "Insurance Proceeds": Proceeds of any Primary Mortgage
Insurance Policy title policy, hazard policy or other insurance policy covering
a Mortgage Loan, to the extent such proceeds are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the Master Servicer would follow in
servicing mortgage loans held for its own account, subject to the terms and
conditions of the related Mortgage Note and Mortgage.

                  "Interest Accrual Period": With respect to any Distribution
Date and any Class of Regular Certificates (other than the Class PO
Certificates), the one-month period ending on the last day of the calendar month
preceding the month in which such Distribution Date occurs.

                  "Interest Distribution Amount": With respect to any Class of
Regular Certificates (other than the Class PO Certificates) for any Distribution
Date, an amount equal to one month's interest accrued during the most recently
ended Interest Accrual Period at the applicable Pass- Through Rate on the
Certificate Principal Balance or Notional Amount thereof immediately prior to
such Distribution Date. The Class PO Certificates are not entitled to
distributions in respect of interest and, accordingly, will not accrue interest.
The Interest Distribution Amount for any Class of Regular Certificates (a) will
also include, in the case of any Distribution Date subsequent to the initial
Distribution Date, the excess, if any, of the Interest Distribution Amount in
respect of such Certificates for the immediately preceding Distribution Date,
over the aggregate distributions of interest made in respect of such
Certificates pursuant to Section 4.01(a) on such immediately preceding
Distribution Date, and (b) will be reduced, in the case of any Distribution
Date, by the amount of any Prepayment Interest Shortfalls (to the extent not
covered by payments by the Master Servicer pursuant to Section 3.24) and Relief
Act Interest Shortfalls that were allocated to such Certificates on such
Distribution Date pursuant to Section 1.02. The Interest Distribution Amount for
any Class of Certificates will be based on a 360 day year consisting of twelve
30 day Interest Accrual Periods. The Interest Distribution Amount shall only
consist of amounts in respect of interest received or advanced on the Mortgage
Loans.

                  "Late Collections": With respect to any Mortgage Loan, all
amounts received subsequent to the Determination Date immediately following any
Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent for
such Due Period and not previously recovered.

                                      -21-

<PAGE>

                  "Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage
Loan is removed from REMIC I by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01.
With respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from either REMIC I by reason of its being purchased
pursuant to Section 9.01.

                  "Liquidation Proceeds": The amount (including any Insurance
Proceeds or amounts received in respect of the rental of any REO Property prior
to REO Disposition) received by the Master Servicer in connection with (i) the
taking of all or a part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage
Loan through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.16(c), Section 3.23 or Section
9.01.

                  "Loan Group": Either Loan Group I or Loan Group II.

                  "Loan Group I": The Loan Group consisting of the Group I
Mortgage Loans. With respect to the Class A-1 Certificates, Loan Group I is
sometimes referred to herein as the related Loan Group and the Mortgage Loans in
such Loan Group are sometimes referred to herein as the related Mortgage Loans.

                  "Loan Group II": The Loan Group consisting of the Group II
Mortgage Loans. With respect to the Group II Class A Certificates, Loan Group II
is sometimes referred to herein as the related Loan Group and the Mortgage Loans
in such Loan Group are sometimes referred to herein as the related Mortgage
Loans.

                  "Loan-to-Value Ratio": As of any date of determination, the
fraction, expressed as a percentage, the numerator of which is the principal
balance of the related Mortgage Loan at such date and the denominator of which
is the Value of the related Mortgaged Property.

                  "Loss Mitigation Procedures": The policies and procedures set
forth in Exhibit H hereto relating to the realization on delinquent Mortgage
Loans, which are incorporated by reference into this Agreement shall be deemed a
part hereof.

                  "Master Servicer": Union Planters Mortgage, Inc. or any
successor master servicer appointed as herein provided, in its capacity as
Master Servicer hereunder.

                  "Master Servicer Event of Default": One or more of the events
described in Section 7.01.

                  "Master Servicer Remittance Date": With respect to any
Distribution Date, 12:00 p.m. New York time on the 18th calendar day of the
month in which such Distribution Date occurs (or the immediately preceding
Business Day, if such 18th day is not a Business Day).

                                      -22-

<PAGE>

                  "Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.07; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.

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

                  "Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on, or first priority security interest in, a Mortgaged
Property securing a Mortgage Note.

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

                  "Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee pursuant to Section 2.01 or Section 2.03(d) of this Agreement, as
from time to time held as a part of the Trust Fund, the Mortgage Loans so held
being identified in the Mortgage Loan Schedule.

                  "Mortgage Loan Purchase Agreement": The agreement among the
Depositor, the Seller and the Originator regarding the transfer of the Mortgage
Loans by the Seller to or at the direction of the Depositor, substantially in
the form of Exhibit D annexed hereto.

                  "Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in the Trust Fund on such date, attached hereto as Schedule 1.
The Mortgage Loan Schedule shall set forth the following information with
respect to each Mortgage Loan:

                  (i)      the Master Servicer's Mortgage Loan identifying
         number;

                  (ii)     [reserved];

                  (iii)    the state and zip code;

                  (iv)     a code indicating whether the Mortgaged Property is
         owner-occupied;

                  (v)      the type of Residential Dwelling constituting the
         Mortgaged Property;

                  (vi)     the original months to maturity;

                  (vii)    the original date of the mortgage;

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

                                      -23-

<PAGE>

                  (ix)     the Mortgage Rate;

                  (x)      the date on which the first Monthly Payment was due
         on the Mortgage Loan;

                  (xi)     the stated maturity date;

                  (xii)    the amount of the Monthly Payment as of the Cut-off
         Date;

                  (xiii)   the last Due Date on which a Monthly Payment was
         actually applied to the unpaid Stated Principal Balance;

                  (xiv)    the original principal amount of the Mortgage Loan;

                  (xv)     the Scheduled Principal Balance of the Mortgage Loan
         as of the close of business on the Cut-off Date;

                  (xvi)    a code indicating the purpose of the Mortgage Loan
         (i.e., purchase financing, Rate/Term Refinancing, Cash-Out
         Refinancing);

                  (xvii)   the Value of the Mortgaged Property;

                  (xviii)  the actual unpaid principal balance of the Mortgage
         Loan as of the Cut-off Date;

                  (xx)     the Class PO Percentage;

                  (xxi)    the Loan Group;

                  (xxii)   a code indicating the documentation program;

                  (xxiii)  a code indicating if the Mortgage Loan is subject to
         a Primary Mortgage Insurance Policy; and

                  (xxviv)  the risk grade.

                  The Mortgage Loan Schedule shall set forth the following
information with respect to the Mortgage Loans in the aggregate as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current principal
balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the
Mortgage Loans; (4) the weighted average maturity of the Mortgage Loans; (5) the
Scheduled Principal Balance of the Mortgage Loans as of the close of business on
the Cut-off Date (not taking into account any Principal Prepayments received on
the Cut-off Date); and (6) the amount of the Monthly Payment as of the Cut-off
Date. The Mortgage Loan Schedule shall be amended from time to time by the
Depositor in accordance with the provisions of this Agreement. With respect to
any Qualified Substitute Mortgage Loan, Cut-off Date shall refer to the related
Cut-off Date for such Mortgage Loan, determined in accordance with the
definition of Cut-off Date herein.

                                      -24-

<PAGE>

                  "Mortgage Note": The original executed note or other evidence
of the indebtedness of a Mortgagor under a Mortgage Loan; PROVIDED, HOWEVER,
that with respect to a Mortgage Loan on a Mortgaged Property located in the
State of Texas, the Mortgage Note may read "Renewal and Extension."

                  "Mortgage Pool": The pool of Mortgage Loans consisting of Loan
Group I and Loan Group II, identified on Schedule 1 from time to time, and any
REO Properties acquired in respect thereof.

                  "Mortgage Rate": The annual rate at which interest accrues on
such Mortgage Loan from time to time in accordance with the provisions of the
related Mortgage Note, without regard to any reduction thereof as a result of a
Debt Service Reduction or operation of the Relief Act. With respect to each
Mortgage Loan that becomes an REO Property, as of any date of determination, the
annual rate determined in accordance with the immediately preceding sentence as
of the date such Mortgage Loan became an REO Property.

                  "Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.

                  "Mortgagor": The obligor on a Mortgage Note.

                  "Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property) as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.

                  "New Lease": Any lease of REO Property entered into on behalf
of REMIC I, including any lease renewed or extended on behalf of REMIC I, if
REMIC I has the right to renegotiate the terms of such lease.

                  "Non-Class PO Percentage": With respect to each Class IO
Mortgage Loan, 100%. With respect to each Class PO Mortgage Loan, 100% less the
Class PO-1 Percentage or the Class PO-2 Percentage, as applicable.

                  "Nonrecoverable P&I Advance": Any P&I Advance previously made
or proposed to be made in respect of a Mortgage Loan or REO Property that, in
the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed P&I Advance, would not be ultimately recoverable from related
late payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan
or REO Property as provided herein.

                  "Non-United States Person": Any Person other than a United
States Person.

                  "Notional Amount": For any Distribution Date with respect to
the Class S-1 Certificates, the Certificate Principal Balance of the Class A-1
Certificates for such Distribution Date. For federal income tax purposes, the
Notional Amount of the Class S-1 Certificates will equal the Uncertificated
Balance of REMIC I Regular Interest LT-A1. For any Distribution Date with
respect to the Class S-2 Certificates, the aggregate Certificate Principal
Balance of the Group II Class

                                      -25-

<PAGE>

A Certificates for such Distribution Date. For federal income tax purposes, the
Notional Amount of the Class S-2 Certificates will equal the aggregate
Uncertificated Balance of REMIC I Regular Interest LT-A2, REMIC I Regular
Interest LT-A3 and REMIC I Regular Interest LT-A4. For any Distribution Date
with respect to the Class IO-1 Certificates, the aggregate Stated Principal
Balance of the Group I Mortgage Loans for such Distribution Date. For any
Distribution Date with respect to the Class IO-2 Certificates, the aggregate
Stated Principal Balance of the Group II Mortgage Loans for such Distribution
Date. For federal income tax purposes, the Class IO-1 Certificates and the Class
IO-2 Certificates will not have a Notional Amount, but will be entitled to 100%
of amounts distributed on REMIC I Regular Interest LT-IO1 and REMIC I Regular
Interest LT-IO2, respectively.

                  "Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Seller or the Depositor, as
applicable; with respect to the Master Servicer, any officer who is authorized
to act for the Master Servicer in matters relating to this Agreement, and whose
action is binding upon the Master Servicer, initially including those
individuals whose names appear on the list of authorized officers delivered at
the closing.

                  "Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be salaried counsel for the Depositor or the Master
Servicer, acceptable to the Trustee, except that any opinion of counsel relating
to (a) the qualification of any Trust REMIC as a REMIC or (b) compliance with
the REMIC Provisions must be an opinion of Independent counsel.

                  "Original Group I Mortgage Loan": Any Mortgage Loan included
in Loan Group I as of the Closing Date.

                  "Original Group II Mortgage Loan": Any Mortgage Loan included
in Loan Group II as of the Closing Date.

                  "Originator": Union Planters Bank, National Association, or
its successor in interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.

                  "Overcollateralized Amount": As to any Distribution Date, an
amount equal to the Undercollateralized Amount for the unrelated Class of Class
A Certificates.

                  "Overcollateralized Loan Group": As to any Distribution Date,
either Loan Group for which an Overcollateralized Amount greater than zero is
calculated.

                  "Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.

                  "Pass-Through Rate": With respect to any Class A Certificate,
4.00% per annum for each Distribution Date through and including the
Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in

                                      -26-

<PAGE>

the Trust Fund is reduced to less than 5% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date, and 7.00% per annum in the
case of each Distribution Date thereafter.

                  With respect to any Class S Certificate, 3.00% per annum for
each Distribution Date through and including the Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to less than
5% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date and 0.00% per annum in the case of each Distribution Date
thereafter.

                  With respect to the Class IO-1 Certificates and any
Distribution Date, the Weighted Average Stripped Interest Rate for the Group I
Mortgage Loans for such Distribution Date. With respect to the Class IO-2
Certificates and any Distribution Date, the Weighted Average Stripped Interest
Rate for the Group II Mortgage Loans for such Distribution Date. For federal
income tax purposes, the Class IO-1 Certificates and the Class IO-2 Certificates
will not have a Pass-Through Rate, but will be entitled to 100% of amounts
distributed on REMIC I Regular Interest LT-IO1 and REMIC I Regular Interest
LT-IO2, respectively.

                  With respect to the Subordinate Certificates and any
Distribution Date, 7.00% per annum.

                  The Class PO Certificates shall have a Pass-Through Rate of
0.000% per annum and shall not be entitled to any distributions of interest.

                  "Percentage Interest": With respect to any Class of
Certificates, the portion of the respective Class evidenced by such Certificate,
expressed as a percentage, the numerator of which is the initial Certificate
Principal Balance or Notional Amount represented by such Certificate, and the
denominator of which is the initial aggregate Certificate Principal Balance or
Notional Amount of all of the Certificates of such Class. The Book-Entry
Certificates are issuable only in Percentage Interests corresponding to initial
Certificate Principal Balances of $100,000 and integral multiples of $1.00 in
excess thereof. The Private Certificates are issuable only in Percentage
Interests corresponding to the initial Certificate Principal Balances or
Notional Amounts of $100,000 and integral multiples of $1,000 in excess thereof;
PROVIDED, HOWEVER, that a single Certificate of each such Class of Certificates
may be issued having a Percentage Interest corresponding to the remainder of the
aggregate initial Certificate Principal Balance or Notional Amount of such Class
or to an otherwise authorized denomination for such Class plus such remainder.
The Residual Certificates are issuable only in Percentage Interests of 20% and
multiples thereof.

                  "Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued by the Depositor, the Master Servicer, the Trustee
or any of their respective Affiliates:

                  (i) direct obligations of, or obligations fully guaranteed as
         to timely payment of principal and interest by, the United States or
         any agency or instrumentality thereof, provided such obligations are
         backed by the full faith and credit of the United States;

                                      -27-

<PAGE>

                  (ii) demand and time deposits in, certificates of deposit of,
         or bankers' acceptances (which shall each have an original maturity of
         not more than 90 days and, in the case of bankers' acceptances, shall
         in no event have an original maturity of more than 365 days or a
         remaining maturity of more than 30 days) denominated in United States
         dollars and issued by, any Depository Institution;

                  (iii) repurchase obligations with respect to any security
         described in clause (i) above entered into with a Depository
         Institution (acting as principal);

                  (iv) securities bearing interest or sold at a discount that
         are issued by any corporation incorporated under the laws of the United
         States of America or any state thereof and that are rated by each
         Rating Agency in its highest long-term unsecured rating category at the
         time of such investment or contractual commitment providing for such
         investment;

                  (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 30 days after the date of
         acquisition thereof) that is rated by each Rating Agency in its highest
         short-term unsecured debt rating available at the time of such
         investment;

                  (vi) units of money market funds, including money market funds
         managed or advised by the Trustee or an Affiliate thereof, that have
         been rated "Aaa" by Moody's and "AAA" by S&P; and

                  (vii) if previously confirmed in writing to the Trustee, any
         other demand, money market or time deposit, or any other obligation,
         security or investment, as may be acceptable to each Rating Agency as a
         permitted investment of funds backing securities having ratings
         equivalent to its highest initial rating of the Senior Certificates;

PROVIDED, HOWEVER, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.

                  "Permitted Transferee": Any Transferee of a Residual
Certificate other than a Disqualified Organization or Non-United States Person.

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

                  "P&I Advance": As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer in respect of any Distribution Date pursuant
to Section 4.03.

                  "Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and bank

                                      -28-

<PAGE>

collective investment funds and insurance company general or separate accounts
in which such plans, accounts or arrangements are invested, that are subject to
ERISA or Section 4975 of the Code.

                  "Prepayment Assumption": A prepayment rate for the Mortgage
Loans of 35% CPR. The Prepayment Assumption is used solely for determining the
accrual of original issue discount on the Certificates for federal income tax
purposes. A CPR (or Constant Prepayment Rate) represents an annualized constant
assumed rate of prepayment each month of a pool of mortgage loans relative to
its outstanding principal balance for the life of such pool.

                  "Prepayment Interest Excess": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment Period occurring between the
first day of the calendar month in which such Distribution Date occurs and the
Determination Date of the calendar month in which such Distribution Date occurs,
an amount equal to interest (to the extent received) at the applicable Net
Mortgage Rate on the amount of such Principal Prepayment for the number of days
commencing on the first day of the calendar month in which such Distribution
Date occurs and ending on the last date through which interest is collected from
the related Mortgagor.

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a Principal
Prepayment in full during the portion of the related Prepayment Period occurring
between the first day of the related Prepayment Period and the last day of the
calendar month preceding the month in which such Distribution Date occurs, an
amount equal to interest at the applicable Net Mortgage Rate on the amount of
such Principal Prepayment for the number of days commencing on the date on which
the prepayment is applied and ending on the last day of the related Prepayment
Period. The obligations of the Master Servicer in respect of any Prepayment
Interest Shortfall are set forth in Section 3.24.

                  "Prepayment Period": With respect to any Distribution Date,
the period commencing on the day after the Determination Date in the month
preceding the month in which such Distribution Date falls (or, in the case of
the first Distribution Date, commencing July 1, 2003) and ending on the
Determination Date of the calendar month in which such Distribution Date falls.

                  "Primary Mortgage Insurance Policy": Each primary policy of
mortgage guaranty insurance in effect as represented in the Mortgage Loan
Purchase Agreement and as so indicated on the Mortgage Loan Schedule, or any
replacement policy therefor obtained by the Master Servicer or any Sub-Servicer
pursuant to Section 3.13. Any Mortgage Loan which has a Primary Mortgage
Insurance Policy is set forth on Schedule 2 attached hereto.

                  "Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.

                  "Private Certificates": As defined in Section 5.02(b).

                                      -29-

<PAGE>

                  "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03, Section
3.16(c) or Section 9.01, and as confirmed by an Officers' Certificate from the
Master Servicer to the Trustee, an amount equal to the sum of: (i) 100% of the
Stated Principal Balance thereof as of the date of purchase (or such other price
as provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last covered
by a payment by the Mortgagor or an advance by the Master Servicer, which
payment or advance had as of the date of purchase been distributed pursuant to
Section 4.01, through the end of the calendar month in which the purchase is to
be effected, and (y) an REO Property, the sum of (1) accrued interest on such
Stated Principal Balance at the applicable Net Mortgage Rate in effect from time
to time from the Due Date as to which interest was last covered by a payment by
the Mortgagor or an advance by the Master Servicer through the end of the
calendar month immediately preceding the calendar month in which such REO
Property was acquired, plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, minus the total of all net rental income, Insurance Proceeds,
Liquidation Proceeds and P&I Advances that as of the date of purchase had been
distributed as or to cover REO Imputed Interest pursuant to Section 4.01; (iii)
any unreimbursed Servicing Advances and P&I Advances and any unpaid Servicing
Fees allocable to such Mortgage Loan or REO Property; (iv) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Sections 3.11(a)(ix) and Section 3.16(b); and
(v) in the case of a Mortgage Loan required to be purchased pursuant to Section
2.03, expenses reasonably incurred or to be incurred by the Master Servicer or
the Trustee in respect of the breach or defect giving rise to the purchase
obligation.

                  "Qualified Insurer": Any insurer which meets the requirements
of Fannie Mae and Freddie Mac.

                  "Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
which must, on the date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of the Scheduled
Principal Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month during which the substitution occurs, (ii) have a Mortgage Rate
not less than (and not more than one percentage point in excess of) the Mortgage
Rate of the Deleted Mortgage Loan, (iii) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan, (iv) have the same Due Date as the Due Date on the Deleted Mortgage Loan,
(v) have a Loan-to- Value Ratio as of the date of substitution equal to or lower
than the Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (vi)
be covered under a Primary Mortgage Insurance Policy if such Qualified
Substitute Mortgage Loan has a Loan-to-Value Ratio in excess of 80% and the
Deleted Mortgage Loan was covered by a Primary Mortgage Insurance Policy and
(vii) conform to each representation and warranty set forth in Section 6 of the
Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan. In the
event that one or more mortgage loans are substituted for one or more Deleted
Mortgage Loans, the amounts described in clause (i) hereof shall be determined
on the basis of aggregate principal balances, the Mortgage Rates described in
clause (ii) hereof shall be determined on the basis of weighted average Mortgage
Rates, the terms described

                                      -30-

<PAGE>

in clause (iii) shall be determined on the basis of weighted average remaining
terms to maturity, the Loan-to-Value Ratios described in clause (v) hereof shall
be satisfied as to each such mortgage loan; provided that no Mortgage Loan have
a maturity date after the "latest possible maturity date" identified in the
Preliminary Statement and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (vii) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.

                  "Rate/Term Refinancing": A Refinanced Mortgage Loan, the
proceeds of which are not more than $1,000 in excess of the existing first
mortgage loan and any subordinate mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively (except for such
$1,000) to satisfy the then existing first mortgage loan and any subordinate
mortgage loan of the Mortgagor on the related Mortgaged Property and to pay
related closing costs.

                  "Rating Agency": Moody's and S&P or their successors. If such
agencies or their successors are no longer in existence, the "Rating Agencies"
shall be such nationally recognized statistical rating agencies, or other
comparable Persons, designated by the Depositor, notice of which designation
shall be given to the Trustee and Master Servicer. References herein to "the
Rating Agency" shall be deemed to refer to both Rating Agencies, as the context
may require.

                  "Realized Loss": With respect to each Mortgage Loan as to
which a Final Recovery Determination has been made, an amount (not less than
zero) equal to (i) the unpaid principal balance of such Mortgage Loan as of the
commencement of the calendar month in which the Final Recovery Determination was
made, plus (ii) accrued interest from the Due Date as to which interest was last
paid by the Mortgagor through the end of the calendar month in which such Final
Recovery Determination was made, calculated in the case of each calendar month
during such period (A) at an annual rate equal to the annual rate at which
interest was then accruing on such Mortgage Loan and (B) on a principal amount
equal to the Stated Principal Balance of such Mortgage Loan as of the close of
business on the Distribution Date during such calendar month, plus (iii) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus (iv)
the proceeds, if any, received in respect of such Mortgage Loan prior to the
date such Final Recovery Determination was made, net of amounts that are payable
therefrom to the Master Servicer with respect to such Mortgage Loan pursuant to
Section 3.11(a)(iii)(A) and (B).

                  With respect to any REO Property as to which a Final Recovery
Determination has been made an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the calendar month in which such
Final Recovery Determination was made, calculated in the case of each calendar
month during such period (A) at an annual rate equal to the annual rate at which
interest was then accruing on the related Mortgage Loan and (B) on a principal
amount equal to the Stated Principal Balance of the related Mortgage Loan as of
the close of business on the Distribution Date during such calendar month, plus
(iii) any amounts previously withdrawn from the Collection Account in respect of
the related Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b),
minus (iv) the aggregate of all P&I Advances and Servicing Advances made by the
Master Servicer in respect of such REO Property or the related

                                      -31-

<PAGE>

Mortgage Loan and any unpaid Servicing Fees for which the Master Servicer has
been or, in connection with such Final Recovery Determination, will be
reimbursed pursuant to Section 3.11(a)(iii)(A) or (B) or Section 3.23 out of
rental income, Insurance Proceeds and Liquidation Proceeds received in respect
of such REO Property, minus (v) the total of all net rental income, Insurance
Proceeds and Liquidation Proceeds received in respect of such REO Property that
has been, or in connection with such Final Recovery Determination, will be
transferred to the Distribution Account pursuant to Section 3.23.

                  With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the difference between the principal balance
of the Mortgage Loan outstanding immediately prior to such Deficient Valuation
and the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation.

                  With respect to each Mortgage Loan which has become the
subject of a Debt Service Reduction, the portion, if any, of the reduction in
each affected Monthly Payment attributable to a reduction in the Mortgage Rate
imposed by a court of competent jurisdiction. Each such Realized Loss shall be
deemed to have been incurred on the Due Date for each affected Monthly Payment.

                  "Record Date": With respect to each Distribution Date and
Certificate, the last Business Day of the month immediately preceding the month
in which such Distribution Date occurs.

                  "Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.

                  "Regular Certificate": Any Senior Certificate or Subordinate
Certificate.

                  "Regular Interest": A "regular interest" in a REMIC within the
meaning of Section 860G(a)(1) of the Code.

                  "Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.

                  "Relief Act Interest Shortfall": With respect to any
Distribution Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended calendar month as
a result of the application of the Relief Act.

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

                  "REMIC I": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made, consisting of: (i) such
Mortgage Loans as from time to time are subject to this Agreement, together with
the Mortgage Files relating thereto, and together with all collections thereon
and proceeds thereof; (ii) any REO Property, together with all collections
thereon and proceeds thereof; (iii) the Trustee's rights under all insurance
policies required to be maintained pursuant to this Agreement and any proceeds
thereof; (iv) the Depositor's rights under the Mortgage

                                      -32-

<PAGE>

Loan Purchase Agreement (including any security interests created thereby); and
(v) the Collection Account, the Distribution Account and any REO Account and
such assets that are deposited therein from time to time and any investments
thereof, together with any and all income, proceeds and payments with respect
thereto. Notwithstanding the foregoing, however, REMIC I specifically excludes
all payments and other collections of principal and interest due on the Mortgage
Loans on or before the Cut-off Date.

                  "REMIC I Regular Interests": The REMIC I Regular Interests, as
defined in the Preliminary Statement.

                  "REMIC I Remittance Rate": With respect to REMIC I Regular
Interest LT-A1, REMIC I Regular Interest LT-A2, REMIC I Regular Interest LT-A3,
REMIC I Regular Interest LT- A4, REMIC I Regular Interest LT-B1, REMIC I Regular
Interest LT-B2, REMIC I Regular Interest LT-B3, REMIC I Regular Interest LT-B4,
REMIC I Regular Interest LT-B5 and REMIC I Regular Interest LT-B6, 7.00% per
annum. With respect to REMIC I Regular Interest LT-PO1 and REMIC I Regular
Interest LT-PO2, 0.00% per annum. With respect to REMIC I Regular Interest
LT-IO1, the Weighted Average Stripped Interest Rate for the Group I Mortgage
Loans for such Distribution Date. With respect to REMIC I Regular Interest
LT-IO2, the Weighted Average Stripped Interest Rate for the Group II Mortgage
Loans for such Distribution Date.

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

                  "REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of the Code, and related provisions, and proposed, temporary
and final regulations and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time.

                  "Remittance Report": A report in form and substance acceptable
to the Trustee prepared by the Master Servicer pursuant to Section 4.03 with
such additions, deletions and modifications as agreed to by the Trustee and the
Master Servicer.

                  "Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code as being
included in the term "rents from real property."

                  "REO Account": The account or accounts maintained by the
Master Servicer in respect of an REO Property pursuant to Section 3.23.

                  "REO Disposition": The sale or other disposition of an REO
Property on behalf of REMIC I.

                  "REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of REMIC I,
one month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first

                                      -33-

<PAGE>

such calendar month, of the related Mortgage Loan if appropriate) as of the
close of business on the Distribution Date in such calendar month.

                  "REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
9.01 that is allocable to such REO Property) or otherwise, net of any portion of
such amounts (i) payable pursuant to Section 3.23(c) in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Master Servicer pursuant to Section 3.23(d) for unpaid
Servicing Fees in respect of the related Mortgage Loan and unreimbursed
Servicing Advances and P&I Advances in respect of such REO Property or the
related Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO
Property for such calendar month.

                  "REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.

                  "Request for Release": A release signed by a Servicing
Officer, or in a mutually agreeable electronic format which will, in lieu of a
signature on its face, originate from a Servicing Officer, in the form of
Exhibit E attached hereto.

                  "Residential Dwelling": Any one of the following: (i) an
attached or detached one- family dwelling, (ii) a detached two- to four-family
dwelling, (iii) a one-family dwelling unit in a Fannie Mae eligible condominium
project, or (iv) a detached one-family dwelling in a planned unit development,
none of which is a co-operative, mobile or manufactured home (as defined in 42
United States Code, Section 5402(6)).

                  "Residual Certificate": Any one of the Class R Certificates.

                  "Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.

                  "Responsible Officer": When used with respect to the Trustee,
the President, any vice president, any assistant vice president, the Secretary,
any assistant secretary, the Treasurer, any assistant treasurer, any trust
officer or assistant trust officer, the Controller and any assistant controller
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and, with respect to a
particular matter, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.

                  "S&P": Standard & Poor's, a division of the McGraw-Hill
Companies, Inc., or its successor in interest.

                  "Scheduled Principal Balance": With respect to any Mortgage
Loan: (a) as of the Cut- off Date, the outstanding principal balance of such
Mortgage Loan as of such date, net of the

                                      -34-

<PAGE>

principal portion of all unpaid Monthly Payments, if any, due on or before such
date; (b) as of any Due Date subsequent to the Cut-off Date up to and including
the Due Date in the calendar month in which a Liquidation Event occurs with
respect to such Mortgage Loan, the Scheduled Principal Balance of such Mortgage
Loan as of the Cut-off Date, minus the sum of (i) the principal portion of each
Monthly Payment due on or before such Due Date but subsequent to the Cut-off
Date, whether or not received, (ii) all Principal Prepayments received before
such Due Date but after the Cut-off Date, (iii) the principal portion of all
Liquidation Proceeds and Insurance Proceeds received before such Due Date but
after the Cut-off Date, net of any portion thereof that represents principal due
(without regard to any acceleration of payments under the related Mortgage and
Mortgage Note) on a Due Date occurring on or before the date on which such
proceeds were received and (iv) any Realized Loss incurred with respect thereto
as a result of a Deficient Valuation occurring before such Due Date, but only to
the extent such Realized Loss represents a reduction in the portion of principal
of such Mortgage Loan not yet due (without regard to any acceleration of
payments under the related Mortgage and Mortgage Note) as of the date of such
Deficient Valuation; and (c) as of any Due Date subsequent to the occurrence of
a Liquidation Event with respect to such Mortgage Loan, zero. With respect to
any REO Property: (a) as of any Due Date subsequent to the date of its
acquisition on behalf of the Trust Fund up to and including the Due Date in the
calendar month in which a Liquidation Event occurs with respect to such REO
Property, an amount (not less than zero) equal to the Scheduled Principal
Balance of the related Mortgage Loan as of the Due Date in the calendar month in
which such REO Property was acquired, minus the aggregate amount of REO
Principal Amortization, if any, in respect of such REO Property for all
previously ended calendar months; and (b) as of any Due Date subsequent to the
occurrence of a Liquidation Event with respect to such REO Property, zero.

                  "Seller": Citigroup Global Markets Realty Corp. or its
successor in interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.

                  "Senior Interest Distribution Amount": With respect to any
Distribution Date, an amount equal to the aggregate of the Interest Distribution
Amounts for such Distribution Date for each Class of Class A Certificates, Class
S Certificates, Class IO Certificates and on the first Distribution Date, the
Residual Certificates.

                  "Senior Percentage": The Group I Senior Percentage or the
Group II Senior Percentage, as the context requires.

                  "Senior Prepayment Percentage": The Group I Senior Prepayment
Percentage or the Group II Senior Prepayment Percentage, as the context
requires.

                  "Senior Principal Distribution Amount": For any Distribution
Date and either Class of Class A Certificates, an amount equal to the sum of:

                  (a) the product of (x) the then-applicable related Senior
Percentage and (y) the sum of the following:

                                      -35-

<PAGE>

                           (i) the related Non-Class PO Percentage of the
                  aggregate of the principal portions of all Monthly Payments
                  due during the related Due Period in respect of the related
                  Mortgage Loans whether or not received;

                           (ii) the related Non-Class PO Percentage of the
                  principal portion of all Insurance Proceeds and Liquidation
                  Proceeds (other than amounts described in clause (c) below)
                  received in respect of the related Mortgage Loans during the
                  related Prepayment Period (other than any related Mortgage
                  Loan that was purchased, sold or replaced pursuant to or as
                  contemplated by Section 2.03, Section 3.16(c) or Section 9.01
                  during the related Prepayment Period), net of any portion
                  thereof that represents a recovery of principal for which an
                  advance was made by the Master Servicer pursuant to Section
                  4.03 in respect of a preceding Distribution Date;

                           (iii) the related Non-Class PO Percentage of the
                  Stated Principal Balance (calculated immediately prior to such
                  Distribution Date) of each related Mortgage Loan that was
                  purchased, sold or replaced pursuant to or as contemplated by
                  Section 2.03, Section 3.16(c) or Section 9.01 during the
                  related Prepayment Period;

                           (iv) the related Non-PO Percentage of all REO
                  Principal Amortization collected in respect of any REO
                  Property in respect of a related Mortgage Loan during the
                  related Prepayment Period; and

                           (v) in connection with the substitution of one or
                  more Qualified Substitute Mortgage Loans for one or more
                  Deleted Mortgage Loans in the related Loan Group pursuant to
                  Section 2.03 during the related Prepayment Period, the excess,
                  if any, of (A) the aggregate of the related Non-Class PO
                  Percentage of the Stated Principal Balances (calculated as of
                  the respective dates of substitution) of such Deleted Mortgage
                  Loans, net of the aggregate of the related Non-Class PO
                  Percentage of the principal portions of the Monthly Payments
                  due during the related Prepayment Period (to the extent
                  received from the related Mortgagor or advanced by the Master
                  Servicer and distributed pursuant to Section 4.01 on the
                  Distribution Date in the related Prepayment Period) in respect
                  of each such Deleted Mortgage Loan that was replaced prior to
                  the Distribution Date in the related Prepayment Period, over
                  (B) the aggregate of the related Non-Class PO Percentage of
                  the Stated Principal Balances (calculated as of the respective
                  dates of substitution) of such Qualified Substitute Mortgage
                  Loans;

                  (b) the product of (x) the then-applicable related Senior
Prepayment Percentage and (y) the related Non-Class PO Percentage of all
Principal Prepayments received in respect of the related Mortgage Loans during
the related Prepayment Period;

                  (c) with respect to any related Mortgage Loan which was the
subject of a Final Recovery Determination in the related Prepayment Period, the
least of (a) the then-applicable related Senior Prepayment Percentage of the
Non-Class PO Percentage multiplied by the net Liquidation Proceeds and Insurance
Proceeds allocable to principal in respect of the related Mortgage Loans, (b)
the then-applicable related Senior Percentage of the Non-Class PO Percentage
multiplied by the

                                      -36-

<PAGE>

Scheduled Principal Balance of the related Mortgage Loan at the time of such
Final Recovery Determination; and (c) the principal portion of all amounts
collected in connection with such a Final Recovery Determination to the extent
not distributed to the related Class PO Certificates; and

                  (d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of the related
Senior Principal Distribution Amount for the immediately preceding Distribution
Date, over the aggregate distributions of principal made in respect of the
related Class of Class A Certificates on such immediately preceding Distribution
Date pursuant to Section 4.01 to the extent that any such amounts are not
attributable to Realized Losses which were allocated to the Subordinate
Certificates pursuant to Section 4.04.

                  Notwithstanding the foregoing, on any Distribution Date on
which the balance of the Class A Certificates in the Overcollateralized Loan
Group has been reduced to zero, the Senior Principal Distribution Amount for the
Class A Certificates in the Undercollateralized Loan Group will be increased by
the Class A Principal Adjustment Amount.

                  The Senior Principal Distribution Amount shall only consist of
scheduled and unscheduled principal received on the Mortgage Loans.

                  "Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.

                  "Servicing Advances": The reasonable "out-of-pocket" costs and
expenses incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
in respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property,
and (iv) the performance of its obligations under Section 3.01, Section 3.09,
Section 3.13, Section 3.14, Section 3.16 and Section 3.23. The Master Servicer
shall not be required to make any Servicing Advance in respect of a Mortgage
Loan or REO Property that, in the good faith business judgment of the Master
Servicer, would not be ultimately recoverable from related Insurance Proceeds or
Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.

                  "Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one month's interest (or in the event of
any payment of interest which accompanies a Principal Prepayment in full made by
the Mortgagor during such calendar month, interest for the number of days
covered by such payment of interest) at the applicable Servicing Fee Rate on the
same principal amount on which interest on such Mortgage Loan accrues for such
calendar month. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.

                  "Servicing Fee Rate": 0.25% per annum

                  "Servicing Officer": Any employee of the Master Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans, whose name appear on a list of

                                      -37-

<PAGE>

Servicing Officers furnished by the Master Servicer to the Trustee and the
Depositor on the Closing Date, as such list may from time to time be amended.

                  "Senior Certificates": The Group I Senior Certificates and the
Group II Senior Certificates.

                  "Single Certificate": With respect to any Class of
Certificates (other than the Residual Certificates), a hypothetical Certificate
of such Class evidencing a Percentage Interest for such Class corresponding to
an initial Certificate Principal Balance or Notional Amount of $1,000. With
respect to the Residual Certificates, a hypothetical Certificate of such Class
evidencing a 20% Percentage Interest in such Class.

                  "Special Hazard Amount": Initially, an amount equal to
$3,095,374.96. As of each anniversary of the Cut-off Date, the Special Hazard
Amount shall equal the lesser of (i) the Special Hazard Amount on the
immediately preceding anniversary of the Cut-off Date less the sum of all
amounts allocated to the Subordinate Certificates in respect of Special Hazard
Losses on the Mortgage Loans during such year and (ii) the Adjustment Amount for
such anniversary. The "Adjustment Amount" with respect to each anniversary of
the Cut-off Date will be equal to the greatest of (i) 1.00% multiplied by the
aggregate outstanding principal balance of the Mortgage Loans on the
Distribution Date immediately preceding such anniversary, (ii) the aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of the Mortgage Loans secured by Mortgaged Properties located in the
California postal zip code area in which the highest percentage of related
Mortgage Loans based on outstanding principal balance are located and (iii) two
times the outstanding principal balance of the Mortgage Loan having the largest
outstanding principal balance, in each case as of such anniversary of the
Cut-off Date. After the Certificate Principal Balances of the Subordinate
Certificates are reduced to zero, the Special Hazard Amount will be zero.

                  "Special Hazard Loss": Any Realized Loss or portion thereof
not in excess of the lesser of the cost of repair or replacement of a Mortgaged
Property suffered by such Mortgaged Property by reason of damage caused by
certain hazards (including earthquakes, mudflows, and, to a limited extent,
floods) not insured against under the hazard insurance policies or fire or flood
insurance policies required to be maintained in respect of such Mortgaged
Property pursuant to Section 3.14, or by reason of the application of any
co-insurance provision. Special Hazard Losses shall not include any
Extraordinary Loss or any of the following:

                  (i) wear and tear, deterioration, rust or corrosion, mold, wet
         or dry rot; inherent vice or latent defect; animals, birds, vermin,
         insects;

                  (ii) smog, smoke, vapor, liquid or dust discharge from
         agricultural or industrial
         operations; pollution; contamination;

                  (iii) settling, subsidence, cracking, shrinkage, bulging or
         expansion of pavements, foundations, walls, floors, roofs or ceilings;
         and

                                      -38-

<PAGE>

                  (iv) errors in design, faulty workmanship or faulty materials,
         unless the collapse of the property or a part thereof ensues and then
         only for the ensuing loss.

                  "Startup Day": With respect to any Trust REMIC, the day
designated as such pursuant to Section 10.01(b) hereof.

                  "Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the Scheduled Principal Balance of such
Mortgage Loan as of the Cut-off Date, as shown in the Mortgage Loan Schedule,
minus the sum of (i) the principal portion of each Monthly Payment due on a Due
Date subsequent to the Cut-off Date, to the extent received from the Mortgagor
or advanced by the Master Servicer and distributed pursuant to Section 4.01 on
or before such date of determination, (ii) all Principal Prepayments received
after the Cut-off Date, to the extent distributed pursuant to Section 4.01 on or
before such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds applied by the Master Servicer as recoveries of principal in accordance
with the provisions of Section 3.16, to the extent distributed pursuant to
Section 4.01 on or before such date of determination, and (iv) any Realized Loss
incurred with respect thereto as a result of a Deficient Valuation made during
or prior to the Prepayment Period for the most recent Distribution Date
coinciding with or preceding such date of determination; and (b) as of any date
of determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, zero. With respect to any REO Property: (a) as of any date
of determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of the Trust Fund, minus the sum of (I) if such REO
Property was acquired before the Distribution Date in any calendar month, the
principal portion of the Monthly Payment due on the Due Date in the calendar
month of acquisition, to the extent advanced by the Master Servicer and
distributed pursuant to Section 4.01 on or before such date of determination, to
the extent distributed pursuant to Section 4.01 on or before such date of
determination, and (II) the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.

                  "Stripped Interest Rate": With respect to any Group I Mortgage
Loan or related REO Property, the excess, if any, of the Net Mortgage Rate minus
7.00% per annum. With respect to any Group II Mortgage Loan or related REO
Property, the excess, if any, of the Net Mortgage Rate minus 7.00% per annum.

                  "Subordinate Certificates": Any Class B-1 Certificate, Class
B-2 Certificate, Class B-3 Certificate, Class B-4 Certificate, Class B-5
Certificate or Class B-6 Certificate.

                  "Subordinate Principal Distribution Amount": For any
Distribution Date, an amount equal to the sum of:

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<PAGE>

                  (a) the product of (x) the then-applicable Group I Subordinate
Percentage or Group II Subordinate Percentage, as applicable, and (y) the sum of
the following:

                           (i) the related Non-Class PO Percentage of the
                  aggregate of the principal portions of all Monthly Payments
                  due during the related Due Period in respect of the related
                  Mortgage Loans whether or not received;

                           (ii) the related Non-Class PO Percentage of the
                  principal portion of all Insurance Proceeds and Liquidation
                  Proceeds (other than amounts described in clause (c) below)
                  received in respect of the related Mortgage Loans during the
                  related Prepayment Period (other than any such Mortgage Loan
                  that was purchased, sold or replaced pursuant to or as
                  contemplated by Section 2.03, Section 3.16(c) or Section 9.01
                  during the related Prepayment Period), net of any portion
                  thereof that represents a recovery of principal for which an
                  advance was made by the Master Servicer pursuant to Section
                  4.03 in respect of a preceding Distribution Date;

                           (iii) the related Non-Class PO Percentage of the
                  Stated Principal Balance (calculated immediately prior to such
                  Distribution Date) of each related Mortgage Loan that was
                  purchased, sold or replaced pursuant to or as contemplated by
                  Section 2.03, Section 3.16(c) or Section 9.01 during the
                  related Prepayment Period;

                           (iv) the related Non-PO Percentage of all REO
                  Principal Amortization collected in respect of any REO
                  Property during the related Prepayment Period; and

                           (v) in connection with the substitution of one or
                  more Qualified Substitute Mortgage Loans for one or more
                  Deleted Mortgage Loans in the related Loan Group pursuant to
                  Section 2.03 during the related Prepayment Period, the excess,
                  if any, of (A) the aggregate of the related Non-Class PO
                  Percentage of the Stated Principal Balances (calculated as of
                  the respective dates of substitution) of such Deleted Mortgage
                  Loans, net of the aggregate of the related Non-Class PO
                  Percentage of the principal portions of the Monthly Payments
                  due during the related Prepayment Period (to the extent
                  received from the related Mortgagor or advanced by the Master
                  Servicer and distributed pursuant to Section 4.01 on the
                  Distribution Date in the related Prepayment Period) in respect
                  of each such Deleted Mortgage Loan that was replaced prior to
                  the Distribution Date in the related Prepayment Period, over
                  (B) the aggregate of the related Non-Class PO Percentage of
                  the Stated Principal Balances (calculated as of the respective
                  dates of substitution) of such Qualified Substitute Mortgage
                  Loans;

                  (b) the product of (x) the then-applicable Group I Subordinate
Prepayment Percentage or Group II Subordinate Prepayment Percentage, as
applicable, and (y) related Non-Class PO Percentage of all Principal Prepayments
received in respect of the related Mortgage Loans during the related Prepayment
Period;

                  (c) with respect to any related Mortgage Loans which were the
subject of a Final Recovery Determination in the related Prepayment Period, the
amount, if any, by which the net

                                      -40-

<PAGE>

Liquidation Proceeds and Insurance Proceeds allocable to principal in respect of
such Mortgage Loans exceed the amount distributable to the related Class A
Certificates and the Class PO Certificates pursuant to clause (c) of the
definition of "Senior Principal Distribution Amount" and clause (c) of the
definition of "Class PO Principal Distribution Amount"; and

                  (d) in the case of any Distribution Date subsequent to the
initial Distribution Date, an amount equal to the excess, if any, of the
Subordinate Principal Distribution Amount for the immediately preceding
Distribution Date, over the aggregate distributions of principal made in respect
of the Subordinate Certificates on such immediately preceding Distribution Date
pursuant to Section 4.01 to the extent that any such amounts are not
attributable to Realized Losses that were allocated to the Subordinate
Certificates pursuant to Section 4.04.

                  "Sub-Servicer": Any Person with which the Master Servicer has
entered into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.

                  "Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the Master Servicer.

                  "Sub-Servicing Agreement": The written contract between the
Master Servicer and a Sub-Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02.

                  "Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of any Trust REMIC due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws.

                  "Termination Price": As defined in Section 9.01.

                  "Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.

                  "Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.

                  "Transferor": Any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.

                  "Trigger Amount": With respect to any Class of Class A
Certificates and any Distribution Date, the Trigger Amount occurring after the
first five years will be as follows: for any Distribution Date during the sixth
year after the Closing Date, 30% of the initial sum of the Certificate Principal
Balances of the Subordinate Certificates; for any Distribution Date during the

                                      -41-

<PAGE>

seventh year after the Closing Date, 35% of the initial sum of the Certificate
Principal Balances of the Subordinate Certificates; for any Distribution Date
during the eighth year after the Closing Date, 40% of the initial sum of the
Certificate Principal Balances of the Subordinate Certificates; for any
Distribution Date during the ninth year after the Closing Date, 45% of the
initial sum of the Certificate Principal Balances of the Subordinate
Certificates; and for any Distribution Date during the tenth year (or any year
thereafter) after the Closing Date, 50% of the initial sum of the Certificate
Principal Balances of the Subordinate Certificates.

                  "Trust Fund": Collectively, all of the assets of REMIC I and
REMIC II.

                  "Trust REMIC": Each of REMIC I and REMIC II.

                  "Trustee": Wells Fargo Bank Minnesota, National Association,
or its successor in interest, or any successor trustee appointed as herein
provided.

                  "Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder. The
Trustee Fee shall be an amount equal to interest or investment income earned on
funds deposited in the Distribution Account.

                  "Uncertificated Balance": The amount of any REMIC I Regular
Interest outstanding as of any date of determination. As of the Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest shall equal the
amount set forth in the Preliminary Statement hereto as its initial
Uncertificated Balance. On each Distribution Date, the Uncertificated Balance of
each REMIC I Regular Interest shall be reduced by all distributions of principal
made on such REMIC I Regular Interest, as applicable, on such Distribution Date
pursuant to Section 4.08 and, if and to the extent necessary and appropriate,
shall be further reduced on such Distribution Date by Realized Losses as
provided in Section 4.04.

                  "Uncertificated Notional Amount":

                  "Undercollateralized Amount": As to any Distribution Date and
Loan Group I, the excess, if any, of the Certificate Principal Balance of the
Class A-1 Certificates immediately prior to such Distribution Date over the sum
of (i) the aggregate of the Non-Class PO Percentage of the Scheduled Principal
Balance of each of the Group I Mortgage Loans plus (ii) the aggregate of the
Non-Class PO Percentage of the Scheduled Principal Balance of each of the REO
Properties in Loan Group I, in each case before reduction for any Realized
Losses on such Distribution Date. As to any Distribution Date and Loan Group II,
the excess, if any, of the aggregate Certificate Principal Balance of the Group
II Class A Certificates immediately prior to such Distribution Date over the sum
of (i) the aggregate of the Non-Class PO Percentage of the Scheduled Principal
Balance of each of the Group II Mortgage Loans plus (ii) the aggregate of the
Non-Class PO Percentage of the Scheduled Principal Balance of each of the REO
Properties in Loan Group II, in each case before reduction for any Realized
Losses on such Distribution Date.

                                      -42-

<PAGE>

                  "Undercollateralized Loan Group": As to any Distribution Date,
either Loan Group for which an Undercollateralized Amount greater than zero is
calculated.

                  "Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.

                  "United States Person": A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States, any State thereof or the District of
Columbia (except, in the case of a partnership, to the extent provided in
regulations); provided that, for purposes solely of the restrictions on the
transfer of the Class R Certificates, no partnership or other entity treated as
a partnership for United States federal income tax purposes shall be treated as
a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate whose income is
subject to United States federal income tax regardless of its source, or a trust
if a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States Persons have the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, which have not yet
been issued, a trust which was in existence on August 20, 1996 (other than a
trust treated as owned by the grantor under subpart E of part I of subchapter J
of chapter 1 of the Code), and which was treated as a United States person on
August 20, 1996 may elect to continue to be treated as a United States person
notwithstanding the previous sentence. The term "United States" shall have the
meaning set forth in Section 7701 of the Code.

                  "Value": With respect to any Mortgaged Property that is the
only Mortgaged Property securing a Mortgage Loan or is the primary Mortgaged
Property securing a Mortgage Loan, the lesser of (i) the value thereof as
determined by an appraisal made for the originator of the Mortgage Loan at the
time of origination of the Mortgage Loan and (ii) the purchase price paid for
the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan, PROVIDED, HOWEVER, in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the value determined
by an appraisal made for the originator of such Refinanced Mortgage Loan at the
time of origination of such Refinanced Mortgage Loan by an appraiser. With
respect to any Mortgaged Property that is not the only Mortgaged Property
securing a Mortgage Loan and that is an additional Mortgaged Property securing a
Mortgage Loan, the excess, if any, of (i) the value thereof as determined by an
appraisal made for the originator of the Mortgage Loan at the time of
origination of the Mortgage Loan over (ii) the amount secured by any senior
mortgage lien on such additional Mortgaged Property at the time of origination
of the Mortgage Loan.

                  "Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. At all times during the
term of this Agreement, (i) 98% of all of the Voting Rights shall be allocated
to the Regular Certificates (other than the Class S Certificates and the Class
IO Certificates), in proportion to their then outstanding Certificate Principal
Balances, (ii) 1% of all of the Voting Rights shall be allocated to the Class S
Certificates, in proportion to their then outstanding Notional Amounts, (iii) 1%
of all of the Voting Rights shall be allocated to the Class IO Certificates, in
proportion to their then outstanding Notional Amounts, and (iv) 1% of all

                                      -43-

<PAGE>

Voting Rights will be allocated among the holders of the Residual Certificates,
in proportion to their Percentage Interests in each such Class. All Voting
Rights allocated to any Class of Certificates shall be allocated among such
Certificates PRO RATA in accordance with the respective Percentage Interests
evidenced thereby.

                  "Weighted Average Stripped Interest Rate": With respect to any
Distribution Date, the weighted average of the Stripped Interest Rates in effect
during the most recently ended calendar month for the related Mortgage Loans and
REO Properties based on the respective Scheduled Principal Balances thereof as
of the Due Date in such most recently ended calendar month (or, in the case of
the initial Distribution Date, as of the Cut-off Date).

                  SECTION 1.02. Allocation of Certain Interest Shortfalls.

                  The aggregate amount of any Prepayment Interest Shortfalls (to
the extent not covered by payments by the Master Servicer pursuant to Section
3.24) and any Relief Act Interest Shortfalls incurred in respect of the Mortgage
Loans for any Distribution Date shall be allocated among the Certificates (other
than the Class PO Certificates), PRO RATA in accordance with, and to the extent
of one month's interest at the Pass-Through Rate on the respective Certificate
Principal Balance or Notional Amount of such Certificate immediately prior to
such Distribution Date.

                                      -44-

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION 2.01. Conveyance of Mortgage Loans.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to the Mortgage Loans
identified on the Mortgage Loan Schedule, the rights of the Depositor under the
Mortgage Loan Purchase Agreement, and all other assets included or to be
included in REMIC I. Such assignment includes all interest and principal
received by the Depositor or the Master Servicer on or with respect to the
Mortgage Loans (other than payments of principal and interest due on such
Mortgage Loans on or before the Cut-off Date). The Depositor herewith delivers
to the Trustee an executed copy of the Mortgage Loan Purchase Agreement.

                  In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, the Trustee, the following documents
or instruments with respect to each Mortgage Loan so transferred and assigned (a
"Mortgage File"):

                  (i) the original Mortgage Note, endorsed by the Originator or
         the Originator's successor in interest in blank, or with respect to any
         lost Mortgage Note, an original Lost Note Affidavit stating that the
         original mortgage note was lost, misplaced or destroyed, together with
         a copy of the related mortgage note; PROVIDED, HOWEVER, that such
         substitutions of Lost Note Affidavits for original Mortgage Notes may
         occur only with respect to Mortgage Loans, the aggregate Cut-off Date
         Principal Balance of which is less than or equal to 2.00% of the Pool
         Balance as of the Cut-off Date;

                  (ii) the original recorded Mortgage, with evidence of
         recording thereon or a copy of the Mortgage certified by the public
         recording office in those jurisdictions where the public recording
         office retains the original and the original recorded power of
         attorney, if the Mortgage was executed pursuant to a power of attorney,
         with evidence of recording thereon or a copy of the power of attorney
         certified by the public recording office where the public recording
         office retains the original;

                  (iii) an original Assignment of the Mortgage executed by the
         Originator or the Originator's successor in interest in blank, together
         with any intervening assignments and showing a complete chain of title
         from the original mortgagee named under the Mortgage to the Originator
         or the Originator's successor in interest in blank or an Affiliate of
         the Originator;

                  (iv) the originals of all assumption, modification,
         consolidation or extension agreements, if any;

                                      -45-

<PAGE>

                  (v) the original of any guarantee executed in connection with
         the Mortgage Note;

                  (vi) the original lender's title insurance policy, together
         with all endorsements or riders which were issued with or subsequent to
         the issuance of such policy, insuring the priority of the Mortgage as a
         first lien on the Mortgaged Property represented therein as a fee
         interest vested in the Mortgagor, or in the event such original title
         policy is unavailable, a written commitment or uniform binder or
         preliminary report of title issued by the title insurance or escrow
         company or an attorney's title opinion, if customary in the related
         jurisdiction where the Mortgaged Property is located; and

                  (vii) the original of any security agreement, chattel mortgage
         or equivalent document executed in connection with the Mortgage.

                  With respect to each Mortgage Note and Assignment endorsed in
blank as of the Closing Date, within ninety (90) days of the Closing Date the
Depositor shall cause such endorsements to be completed in the following form:
"Pay to the order of Wells Fargo Bank Minnesota, National Association, as
Trustee, without recourse."

                  Notwithstanding the foregoing, the parties hereto acknowledge
that on the Closing Date, the Depositor will deliver to, and deposit with, the
Trustee, the Mortgage Note and will deliver the remaining contents of each
Mortgage File within 60 days following the Closing Date.

                  In instances where an original recorded Mortgage, power of
attorney or any assumption, modification, consolidation or extension agreement
cannot be delivered by the Depositor to the Trustee within 60 days following the
Closing Date, due to a delay in connection with the recording of such Mortgage,
power of attorney or assumption, modification, consolidation or extension
agreement, the Depositor may, in lieu of delivering such original recorded
Mortgage, power of attorney or assumption, modification, consolidation or
extension agreement referred to in clause (ii) or clause (iv) above, deliver to
the Trustee a copy thereof, provided that the Depositor certifies that the
original Mortgage, power of attorney, assumption, modification, consolidation or
extension agreement has been delivered for recordation. In instances where an
original recorded Mortgage or power of attorney has been lost or misplaced, the
Depositor may deliver or cause to be delivered, in lieu of such Mortgage or
power of attorney, a copy of such Mortgage or power of attorney bearing
recordation information and certified as true and correct by the office in which
recordation thereof was made. In instances where an Assignment in recordable
form cannot be delivered by the Depositor to the Trustee within 60 days
following the Closing Date, due to a delay in connection with the recording of
the Mortgage, the Depositor may, in lieu of delivering the completed assignment
in recordable form referred to in clause (iii) above to the Trustee, deliver
such Assignment to the Trustee completed except for recording information. In
all such instances, the Depositor will deliver the original recorded Mortgage or
power of attorney and completed Assignment (if applicable) to the Trustee
promptly upon receipt of such Mortgage or power of attorney.

                  The Master Servicer shall enforce the obligations of the
Originator under the Mortgage Loan Purchase Agreement to cause all Assignments
referred to in Section 2.01(iii) hereof and, to the extent necessary, in Section
2.01(iv) hereof to be recorded. The Master Servicer shall

                                      -46-

<PAGE>

furnish the Trustee, or its designated agent, with a copy of each Assignment
submitted for recording. In the event that any such Assignment is lost or
returned unrecorded because of a defect therein, the Master Servicer shall cause
the Originator to promptly have a substitute Assignment prepared or have such
defect cured, as the case may be, and thereafter cause each such Assignment to
be duly recorded.

                  Notwithstanding the foregoing, for administrative convenience
and facilitation of servicing and to reduce closing costs, the Assignments shall
not be required to be submitted for recording (except with respect to any
Mortgage Loan located in Florida and Maryland) unless such failure to record
would result in a withdrawal or a downgrading by any Rating Agency of the rating
on any Class of Certificates; provided, however, the Trustee shall enforce the
obligation of the Originator under the Mortgage Loan Purchase Agreement to
submit each Assignment for recording, at the Originator's expense, upon a
Responsible Officer of the Trustee gaining actual knowledge of the earliest to
occur of: (i) direction by Holders of Certificates entitled to at least 25% of
the Voting Rights, (ii) the occurrence of a Master Servicer Event of
Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Originator, (iv) the occurrence of a servicing transfer as
described in Section 7.02 hereof, (v) with respect to any one Assignment the
occurrence of a foreclosure relating to the Mortgagor under the related Mortgage
and (vi) on or after the 90th day on which the payment for such Mortgage Loan
was due and payable and not received. Notwithstanding the foregoing, if the
Originator fails to pay the cost of recording the Assignments, such expense will
be paid by the Trustee and the Trustee shall be reimbursed for such expenses as
Extraordinary Trust Fund Expenses.

                  In addition to the foregoing, the Depositor shall also deliver
to the Trustee a true and complete copy, certified as such by an officer of the
Originator, of each certificate or other evidence of merger or change of name,
if any of the Mortgage Loans were acquired by the Originator by merger or
acquired or originated by the Originator while conducting business under a name
other than its present name and such certificate or other evidence shall not
have been recorded in the public recording office where the related Mortgage is
required to be recorded

                  The Depositor shall deliver or cause to be delivered to the
Trustee promptly upon receipt thereof any other original documents constituting
a part of a Mortgage File received with respect to any Mortgage Loan, including,
but not limited to, any original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan.

                  All original documents relating to the Mortgage Loans that are
not delivered to the Trustee are and shall be held by or on behalf of the
Seller, the Depositor or the Master Servicer, as the case may be, in trust for
the benefit of the Trustee on behalf of the Certificateholders. In the event
that any such original document is required pursuant to the terms of this
Section to be a part of a Mortgage File, such document shall be delivered
promptly to the Trustee. Any such original document delivered to or held by the
Depositor that is not required pursuant to the terms of this Section to be a
part of a Mortgage File, shall be delivered promptly to the Master Servicer.

                                      -47-

<PAGE>

                  SECTION 2.02. Acceptance of REMIC I by the Trustee.

                  Subject to the provisions of Section 2.01 and subject to the
review described below and any exceptions noted on the exception report
described in the second paragraph below, the Trustee acknowledges receipt of the
documents referred to in Section 2.01 above and all other assets included in the
definition of "REMIC I" and declares that it holds and will hold such documents
and the other documents delivered to it constituting a Mortgage File, and that
it holds or will hold all such assets and such other assets included in the
definition of "REMIC I" in trust for the exclusive use and benefit of all
present and future Certificateholders.

                  On or prior to the Closing Date, the Trustee agrees, for the
benefit of the Certificateholders, to execute and deliver to the Depositor and
the Master Servicer an acknowledgment of receipt of each Mortgage Note (with any
exceptions noted), substantially in the form attached as Exhibit C-3 hereto.

                  The Trustee agrees, for the benefit of the Certificateholders,
to review, or that it has reviewed pursuant to Section 2.01 each Mortgage File
within 90 days of the Closing Date, with respect to each Mortgage Loan (or, with
respect to any document delivered after the Startup Day, within 90 days of
receipt and with respect to any Qualified Substitute Mortgage, within 90 days
after the assignment thereof). The Trustee further agrees, for the benefit of
the Certificateholders, to certify in substantially the form attached hereto as
Exhibit C-1, within 90 days following the date on which the Trustee receives the
remaining contents of each Mortgage File from the Depositor, with respect to
each Mortgage Loan (or, with respect to any document delivered after the Startup
Day, within 90 days of receipt and with respect to any Qualified Substitute
Mortgage, within 90 days after the assignment thereof) that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in the exception report
annexed thereto as not being covered by such certification), (i) all documents
required to be delivered to it pursuant Section 2.01 of this Agreement are in
its possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged or torn and relate to such Mortgage Loan and (iii) based on
its examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule that corresponds to items (i), (iii) and (xiv) of the
Mortgage Loan Schedule accurately reflects information set forth in the Mortgage
File. It is herein acknowledged that, in conducting such review, the Trustee is
under no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.

                  Prior to the first anniversary date of this Agreement the
Trustee shall deliver to the Depositor and the Master Servicer a final
certification in the form annexed hereto as Exhibit C-2 evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon.

                  If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee finds any document or documents constituting a part of a Mortgage File
to be missing or defective in any material respect, at the conclusion of its
review the Trustee shall so notify the Depositor and the Master Servicer. In
addition, upon the discovery by the Depositor or the Master Servicer (or upon
receipt by the Trustee

                                      -48-

<PAGE>

of written notification of such breach) of a breach of any of the
representations and warranties made by the Originator or the Seller in the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties to this Agreement.

                  The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans, the
related Mortgage Notes and the related documents, conveying good title thereto
free and clear of any liens and encumbrances, from the Depositor to the Trustee
in trust for the benefit of the Certificateholders and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans, the related Mortgage Notes and the
related documents, and that this Agreement shall constitute a security agreement
under applicable law.

                  SECTION 2.03. Repurchase or Substitution of Mortgage Loans by
                                the Seller.

                  (a) Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Originator or the Seller of any representation, warranty or
covenant under the Mortgage Loan Purchase Agreement in respect of any Mortgage
Loan which materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders, the Trustee shall promptly notify
the Originator, the Seller and the Master Servicer of such defect, missing
document or breach and request that the Originator or the Seller, as applicable,
deliver such missing document or cure such defect or breach within 90 days from
the date the Originator or the Seller, as applicable, was notified of such
missing document, defect or breach, and if the Originator or the Seller, as
applicable, does not deliver such missing document or cure such defect or breach
in all material respects during such period, the Trustee shall enforce the
obligations of the Originator or the Seller, as applicable, under the Mortgage
Loan Purchase Agreement to repurchase such Mortgage Loan from REMIC I at the
Purchase Price within 90 days after the date on which the Originator or the
Seller, as applicable, was notified (subject to Section 2.03(e)) of such missing
document, defect or breach, if and to the extent that the Originator or the
Seller, as applicable, is obligated to do so under the Mortgage Loan Purchase
Agreement. The Purchase Price for the repurchased Mortgage Loan shall be
remitted by the Originator or the Seller, as applicable, to the Master Servicer
for deposit into the Collection Account, and the Trustee, upon receipt of
written certification from the Master Servicer of such deposit, shall release to
the Originator or the Seller, as applicable, the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as the Originator or the Seller, as applicable, shall furnish
to it and as shall be necessary to vest in the Originator or the Seller, as
applicable, any Mortgage Loan released pursuant hereto, and the Trustee shall
have no further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so provided in the
Mortgage Loan Purchase Agreement, the Originator or the Seller, as applicable,
may cause such Mortgage Loan to be removed from REMIC I (in which case it shall
become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute
Mortgage Loans in the manner and subject to the limitations set forth in Section
2.03(d). It is understood and

                                      -49-

<PAGE>

agreed that the obligation of the Originator or the Seller, as applicable, to
cure or to repurchase (or to substitute for) any Mortgage Loan as to which a
document is missing, a material defect in a constituent document exists or as to
which such a breach has occurred and is continuing shall constitute the sole
remedy respecting such omission, defect or breach available to the Trustee on
behalf of the Certificateholders.

                  (b) [Reserved];

                  (c) Within 90 days of the earlier of discovery by the Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.

                  (d) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected
prior to the date which is two years after the Startup Day for REMIC I.

                  As to any Deleted Mortgage Loan for which the Originator or
the Seller, as applicable, substitutes a Qualified Substitute Mortgage Loan or
Loans, such substitution shall be effected by the Originator or the Seller, as
applicable, delivering to the Trustee, for such Qualified Substitute Mortgage
Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee,
and such other documents and agreements, with all necessary endorsements
thereon, as are required by Section 2.01, together with an Officers' Certificate
providing that each such Qualified Substitute Mortgage Loan satisfies the
definition thereof and specifying the Substitution Shortfall Amount (as
described below), if any, in connection with such substitution. The Trustee
shall acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans
and shall thereafter, review such documents within the time periods and in the
manner specified in Section 2.02 and deliver the applicable certifications, with
any applicable exceptions noted thereon, within the time periods and in the
manner specified in Section 2.02. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution are not part of the Trust
Fund and will be retained by the Originator or the Seller, as applicable. For
the month of substitution, distributions to Certificateholders will reflect the
Monthly Payment due on such Deleted Mortgage Loan on or before the Due Date in
the month of substitution, and the Seller shall thereafter be entitled to retain
all amounts subsequently received in respect of such Deleted Mortgage Loan. The
Trustee shall give or cause to be given written notice to the Certificateholders
that such substitution has taken place, and the Master Servicer shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from
the terms of this Agreement and the substitution of the Qualified Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and the Mortgage Loan
Purchase Agreement, including all applicable representations and warranties
thereof included in the Mortgage Loan Purchase Agreement, in each case as of the
date of substitution.

                                      -50-

<PAGE>

                  For any month in which the Originator or the Seller, as
applicable, substitutes one or more Qualified Substitute Mortgage Loans for one
or more Deleted Mortgage Loans, the Master Servicer will determine the amount
(the "Substitution Shortfall Amount"), if any, by which the aggregate Purchase
Price of all such Deleted Mortgage Loans exceeds the aggregate of, as to each
such Qualified Substitute Mortgage Loan, the Scheduled Principal Balance thereof
as of the date of substitution, together with one month's interest on such
Scheduled Principal Balance at the applicable Net Mortgage Rate. On the date of
such substitution, the Originator or the Seller, as applicable, will deliver or
cause to be delivered to the Master Servicer for deposit in the Collection
Account an amount equal to the Substitution Shortfall Amount, if any, and the
Trustee, upon receipt of the related Qualified Substitute Mortgage Loan or Loans
and certification by the Master Servicer of such deposit, shall release to the
Seller the related Mortgage File or Files and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Originator or the Seller, as applicable, shall deliver to it and as shall be
necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.

                  In addition, the Originator or the Seller, as applicable,
shall obtain at its own expense and deliver to the Trustee an Opinion of Counsel
to the effect that such substitution will not cause (a) any federal tax to be
imposed on any Trust REMIC, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code, or
(b) any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificate is outstanding.

                  (e) Upon discovery by the Depositor, the Master Servicer or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall within two Business Days give written notice thereof to the other
parties. In connection therewith, the Originator or the Depositor shall
repurchase or, subject to the limitations set forth in Section 2.03(d),
substitute one or more Qualified Substitute Mortgage Loans for the affected
Mortgage Loan within 90 days of the earlier of discovery or receipt of such
notice with respect to such affected Mortgage Loan. Such repurchase or
substitution shall be made by (i) the Originator, if the affected Mortgage
Loan's status as a non-qualified mortgage is or results from a breach of any
representation, warranty or covenant made by the Originator under the Mortgage
Loan Purchase Agreement, or (ii) the Depositor, if the affected Mortgage Loan's
status as a non-qualified mortgage is a breach of no representation or warranty.
Any such repurchase or substitution shall be made in the same manner as set
forth in Sections 2.03(a). The Trustee shall reconvey to the Depositor or the
Originator, as the case may be, the Mortgage Loan to be released pursuant hereto
in the same manner, and on the same terms and conditions, as it would a Mortgage
Loan repurchased by the Seller or the Originator for breach of a representation
or warranty.

                  SECTION 2.04. [Reserved].

                  SECTION 2.05. Representations, Warranties and Covenants of the
                                Master Servicer.

                  The Master Servicer hereby represents, warrants and covenants
to the Trustee, for the benefit of each of the Trustee and the
Certificateholders, and to the Depositor that as of the Closing Date or as of
such date specifically provided herein:

                                      -51-

<PAGE>

                  (i) The Master Servicer is a corporation duly organized,
         validly existing and in good standing under the laws of the State of
         Mississippi and is duly authorized and qualified to transact any and
         all business contemplated by this Agreement to be conducted by the
         Master Servicer in any state in which a Mortgaged Property is located
         or is otherwise not required under applicable law to effect such
         qualification and, in any event, is in compliance with the doing
         business laws of any such State, to the extent necessary to ensure its
         ability to enforce each Mortgage Loan and to service the Mortgage Loans
         in accordance with the terms of this Agreement;

                  (ii) The Master Servicer has the full corporate power and
         authority to service each Mortgage Loan, and to execute, deliver and
         perform, and to enter into and consummate the transactions contemplated
         by this Agreement and has duly authorized by all necessary corporate
         action on the part of the Master Servicer the execution, delivery and
         performance of this Agreement; and this Agreement, assuming the due
         authorization, execution and delivery thereof by the other parties
         hereto, constitutes a legal, valid and binding obligation of the Master
         Servicer, enforceable against the Master Servicer in accordance with
         its terms, except to the extent that (a) the enforceability thereof may
         be limited by bankruptcy, insolvency, moratorium, receivership and
         other similar laws relating to creditors' rights generally and (b) the
         remedy of specific performance and injunctive and other forms of
         equitable relief may be subject to the equitable defenses and to the
         discretion of the court before which any proceeding therefor may be
         brought;

                  (iii) The execution and delivery of this Agreement by the
         Master Servicer, the servicing of the Mortgage Loans by the Master
         Servicer hereunder, the consummation of any other of the transactions
         herein contemplated, and the fulfillment of or compliance with the
         terms hereof are in the ordinary course of business of the Master
         Servicer and will not (A) result in a breach of any term or provision
         of the charter or by-laws of the Master Servicer or (B) conflict with,
         result in a breach, violation or acceleration of, or result in a
         default under, the terms of any other material agreement or instrument
         to which the Master Servicer is a party or by which it may be bound, or
         any statute, order or regulation applicable to the Master Servicer of
         any court, regulatory body, administrative agency or governmental body
         having jurisdiction over the Master Servicer; and the Master Servicer
         is not a party to, bound by, or in breach or violation of any indenture
         or other agreement or instrument, or subject to or in violation of any
         statute, order or regulation of any court, regulatory body,
         administrative agency or governmental body having jurisdiction over it,
         which materially and adversely affects or, to the Master Servicer's
         knowledge, would in the future materially and adversely affect, (x) the
         ability of the Master Servicer to perform its obligations under this
         Agreement or (y) the business, operations, financial condition,
         properties or assets of the Master Servicer taken as a whole;

                  (iv) The Master Servicer is an approved seller/servicer for
         Fannie Mae or Freddie Mac in good standing and is a HUD approved
         mortgagee pursuant to Section 203 of the National Housing Act;

                  (v) No litigation is pending against the Master Servicer that
         would materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of

                                                       -52-

<PAGE>

         the Master Servicer to service the Mortgage Loans or to perform any of
         its other obligations hereunder in accordance with the terms hereof;

                  (vi) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Master Servicer of, or compliance by the Master
         Servicer with, this Agreement or the consummation of the transactions
         contemplated by this Agreement, except for such consents, approvals,
         authorizations or orders, if any, that have been obtained prior to the
         Closing Date; and

                  (vii) The Master Servicer covenants that its computer and
         other systems used in servicing the Mortgage Loans operate in a manner
         such that the Master Servicer can service the Mortgage Loans in
         accordance with the terms of this Agreement.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Master Servicer or the Trustee of a breach of any of the
foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Trustee.

                  SECTION 2.06. Issuance of the Certificates.

                  The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the Mortgage Files, subject to the provisions of
Section 2.01 and Section 2.02, together with the assignment to it of all other
assets included in the Trust REMICs delivered on the date hereof, receipt of
which is hereby acknowledged. Concurrently with such assignment and delivery of
such assets delivered on the date hereof and in exchange therefor, the Trustee,
pursuant to the written request of the Depositor executed by an officer of the
Depositor, has executed, authenticated and delivered to or upon the order of the
Depositor, the Certificates in authorized denominations. The interests evidenced
by the Certificates constitute the entire beneficial ownership interest in REMIC
II.

                  SECTION 2.07. Conveyance of the REMIC I Regular Interests;
                                Acceptance of REMIC II by the Trustee.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests for the benefit of the Class R
Certificateholders (as holder of the Class R-I Interest and Class R-II Interest)
and REMIC II (as holder of the REMIC I Regular Interests). The Trustee
acknowledges receipt of the REMIC I Regular Interests and declares that it holds
and will hold the same in trust for the exclusive use and benefit of all present
and future Class R Certificateholders (as holder of the Class R-I Interest and
Class R-II Interest) and REMIC II (as holder of the REMIC I Regular Interests).
The rights of the Class R Certificateholders (as holder of the Class R-I
Interest and Class R-II Interest) and REMIC II (as holder of the REMIC I Regular
Interest) to receive distributions from the proceeds of REMIC

                                      -53-

<PAGE>

II in respect of the Class R-II Interest and REMIC II Regular Interests,
respectively, and all ownership interests evidenced or constituted by the Class
R-II Interest and the REMIC I Regular Interests, shall be as set forth in this
Agreement.

                                      -54-

<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

                  SECTION 3.01. Master Servicer to Act as Master Servicer.

                  The Master Servicer shall service and administer the Mortgage
Loans on behalf of the Trustee and in the best interests of and for the benefit
of the Certificateholders (as determined by the Master Servicer in its
reasonable judgment) in accordance with the terms of this Agreement and the
respective Mortgage Loans and, to the extent consistent with such terms, in the
same manner in which it services and administers similar mortgage loans for its
own portfolio, giving due consideration to customary and usual standards of
practice of prudent mortgage lenders until the Mortgage Loan is delinquent 90
days, and then following the Loss Mitigation Procedures or loan servicers
administering similar mortgage loans but, in each case, without regard to:

                  (i) any relationship that the Master Servicer, any
         Sub-Servicer or any Affiliate of the Master Servicer or any
         Sub-Servicer may have with the related Mortgagor;

                  (ii) the ownership of any Certificate by the Master Servicer
         or any Affiliate of the Master Servicer;

                  (iii) the Master Servicer's obligation to make P&I Advances or
         Servicing Advances; or

                  (iv) the Master Servicer's or any Sub-Servicer's right to
         receive compensation for its services hereunder or with respect to any
         particular transaction.

                  To the extent consistent with the foregoing, the Master
Servicer shall also seek to maximize the timely and complete recovery of
principal and interest on the Mortgage Notes. Subject only to the
above-described servicing standards and the terms of this Agreement and of the
respective Mortgage Loans, the Master Servicer shall have full power and
authority, acting alone or through Sub-Servicers as provided in Section 3.02, to
do or cause to be done any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting the
generality of the foregoing, the Master Servicer in its own name or in the name
of a Sub-Servicer is hereby authorized and empowered by the Trustee when the
Master Servicer believes it appropriate in its best judgment in accordance with
the servicing standards set forth above, to execute and deliver, on behalf of
the Certificateholders and the Trustee, and upon notice to the Trustee, any and
all instruments of satisfaction or cancellation, or of partial or full release
or discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee and Certificateholders. The Master Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. The Master Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each

                                      -55-

<PAGE>

insurer under each Primary Mortgage Insurance Policy and any standard hazard
insurance policy. Subject to Section 3.17, the Trustee shall execute, at the
written request of the Master Servicer, and furnish to the Master Servicer and
any Sub-Servicer such documents as are necessary or appropriate to enable the
Master Servicer or any Sub-Servicer to carry out their servicing and
administrative duties hereunder, and the Trustee hereby grants to the Master
Servicer a power of attorney to carry out such duties. The Trustee shall not be
liable for the actions of the Master Servicer or any Sub- Servicers under such
powers of attorney.

                  In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the timely payment of taxes and assessments on the
Mortgaged Properties, which advances shall be Servicing Advances reimbursable in
the first instance from related collections from the Mortgagors pursuant to
Section 3.09, and further as provided in Section 3.11. Any cost incurred by the
Master Servicer or by Sub- Servicers in effecting the timely payment of taxes
and assessments on a Mortgaged Property shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.

                  Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.03) and the Master Servicer shall not
permit any modification, waiver or amendment of any term of any Mortgage Loan,
unless (i) the Master Servicer provides an Opinion of Counsel that such action
will not both (A) effect an exchange or reissuance of such Mortgage Loan under
Section 1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and (B) cause any Trust REMIC to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions after the startup date" under the REMIC Provisions or (ii)
such modification, waiver or amendment is made in accordance with the terms of
Section 3.07.

                  Notwithstanding anything in this Agreement to the contrary,
the Master Servicer shall not adjust the Mortgage Rate on any Mortgage Loan
notwithstanding its ability to do so pursuant to the related Mortgage Note and
shall not exercise any right it might have under the terms of any Mortgage Note
to call any Mortgage Loan.

                  The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement.

                  SECTION 3.02. Sub-Servicing Agreements Between the Master
                                Servicer and Sub-Servicers.

                  (a) The Master Servicer may enter into Sub-Servicing
Agreements (provided that such agreements would not result in a withdrawal or a
downgrading by the Rating Agency of the rating on any Class of Certificates)
with Sub-Servicers, for the servicing and administration of the Mortgage Loans.

                                      -56-

<PAGE>

                  Each Sub-Servicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Sub-Servicer to perform its obligations hereunder and under the Sub-
Servicing Agreement, (ii) an institution approved as a mortgage loan originator
by the Federal Housing Administration or an institution the deposit accounts of
which are insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved
mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer will examine each Sub-Servicing Agreement and will be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement will
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; PROVIDED, HOWEVER, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the
Sub-Servicing Accounts or the timing and amount of remittances by the
Sub-Servicers to the Master Servicer, are conclusively deemed to be inconsistent
with this Agreement and therefore prohibited. The Master Servicer shall deliver
to the Trustee copies of all Sub-Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Master Servicer's execution and
delivery of such instruments.

                  (b) As part of its servicing activities hereunder, the Master
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
of the Seller under the Mortgage Loan Purchase Agreement, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub- Servicing Agreement, or to purchase a Mortgage Loan on
account of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement, to
the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans, or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.

                  SECTION 3.03. Successor Sub-Servicers.

                  The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in

                                      -57-

<PAGE>

accordance with the terms and conditions of such Sub-Servicing Agreement. In the
event of termination of any Sub-Servicer, all servicing obligations of such
Sub-Servicer shall be assumed simultaneously by the Master Servicer without any
act or deed on the part of such Sub-Servicer or the Master Servicer, and the
Master Servicer either shall service directly the related Mortgage Loans or
shall enter into a Sub-Servicing Agreement with a successor Sub-Servicer which
qualifies under Section 3.02.

                  Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Trustee without fee, in
accordance with the terms of this Agreement, in the event that the Master
Servicer shall, for any reason, no longer be the Master Servicer (including
termination due to a Master Servicer Event of Default).

                  SECTION 3.04. Liability of the Master Servicer.

                  Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub-Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. The Master Servicer shall be entitled to enter into any agreement with a
Sub- Servicer for indemnification of the Master Servicer by such Sub-Servicer
and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.

                  SECTION 3.05. No Contractual Relationship Between
                                Sub-Servicers and Trustee or Certificateholders.

                  Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the Trustee and Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.

                  SECTION 3.06. Assumption or Termination of Sub-Servicing
                                Agreements by Trustee.

                  In the event the Master Servicer shall for any reason no
longer be the master servicer (including by reason of the occurrence of a Master
Servicer Event of Default), the Trustee or its designee shall thereupon assume
all of the rights and obligations of the Master Servicer under each
Sub-Servicing Agreement that the Master Servicer may have entered into, unless
the Trustee elects to terminate any Sub-Servicing Agreement in accordance with
its terms as provided in Section 3.03. Upon such assumption, the Trustee, its
designee or the successor servicer for the Trustee appointed

                                      -58-

<PAGE>

pursuant to Section 7.02 shall be deemed, subject to Section 3.03, to have
assumed all of the Master Servicer's interest therein and to have replaced the
Master Servicer as a party to each Sub-Servicing Agreement to the same extent as
if each Sub-Servicing Agreement had been assigned to the assuming party, except
that (i) the Master Servicer shall not thereby be relieved of any liability or
obligations under any Sub-Servicing Agreement and (ii) none of the Trustee, its
designee or any successor Master Servicer shall be deemed to have assumed any
liability or obligation of the Master Servicer that arose before it ceased to be
the Master Servicer.

                  The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party.

                  SECTION 3.07. Collection of Certain Mortgage Loan Payments.

                  The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this
Agreement, the terms and provisions of any related Primary Mortgage Insurance
Policy and any applicable insurance policies, follow such collection procedures
as it would follow with respect to mortgage loans comparable to the Mortgage
Loans and held for its own account. Consistent with the foregoing, the Master
Servicer may in its discretion (i) waive any late payment charge or, if
applicable, penalty interest, only upon determining that the coverage of such
Mortgage Loan by the related Primary Mortgage Insurance Policy, if any, will not
be affected, or (ii) extend the due dates for Monthly Payments due on a Mortgage
Note for a period of not greater than 180 days; provided that any extension
pursuant to clause (ii) above shall not affect the amortization schedule of any
Mortgage Loan for purposes of any computation hereunder, except as provided
below. In the event of any such arrangement pursuant to clause (ii) above, the
Master Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.03 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements. Notwithstanding the foregoing, in the event that any Mortgage Loan
is in default or, in the judgment of the Master Servicer, such default is
reasonably foreseeable, the Master Servicer, consistent with the standards set
forth in Section 3.01, may also accept payment from the related Mortgagor of an
amount less than the Stated Principal Balance in final satisfaction of such
Mortgage Loan (such payment, a "Short Pay-off") or consent to the postponement
of strict compliance with any such term or otherwise grant indulgence to any
Mortgagor; PROVIDED, HOWEVER, that in determining which course of action
permitted by this sentence it shall pursue, the Master Servicer shall adhere to
the Loss Mitigation Procedures. The Master Servicer's analysis supporting any
forbearance and the conclusion that any forbearance meets the standards of
Section 3.01 shall be reflected in writing in the Mortgage File.

                  SECTION 3.08. Sub-Servicing Accounts.

                  In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an

                                      -59-

<PAGE>

Eligible Account and shall comply with all requirements of this Agreement
relating to the Collection Account. The Sub-Servicer shall deposit in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than two Business Days after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub- Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than one Business Day after the deposit of such funds into the clearing account.
The Sub-Servicer shall thereafter deposit such proceeds in the Collection
Account or remit such proceeds to the Master Servicer for deposit in the
Collection Account not later than two Business Days after the deposit of such
amounts in the Sub-Servicing Account. For purposes of this Agreement, the Master
Servicer shall be deemed to have received payments on the Mortgage Loans when
the Sub-Servicer receives such payments.

                  SECTION 3.09. Collection of Taxes, Assessments and Similar
                                Items; Servicing Accounts.

                  The Master Servicer shall establish and maintain one or more
accounts (the "Servicing Accounts"), into which all collections from the
Mortgagors (or related advances from Sub-Servicers) for the payment of ground
rents, taxes, assessments, primary mortgage insurance premiums, fire and hazard
insurance premiums, water charges, sewer rents and comparable items for the
account of the Mortgagors ("Escrow Payments") shall be deposited and retained.
Servicing Accounts shall be Eligible Accounts. The Master Servicer shall deposit
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than two Business Days after the Master Servicer's receipt thereof, all
Escrow Payments collected on account of the Mortgage Loans and shall thereafter
deposit such Escrow Payments in the Servicing Accounts, in no event more than
one Business Day after the deposit of such funds in the clearing account, for
the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from a Servicing Account may be
made only to (i) effect payment of Escrow Payments; (ii) reimburse the Master
Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing
Agreement) out of related collections for any advances made pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.14 (with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined to
be overages; (iv) pay interest, if required and as described below, to
Mortgagors on balances in the Servicing Account; (v) clear and terminate the
Servicing Account at the termination of the Master Servicer's obligations and
responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article IX; or (vi) recover amounts deposited in error. As part
of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in Servicing Accounts, to the extent required by
law and, to the extent that interest earned on funds in the Servicing Accounts
is insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Master Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The
Master Servicer assumes full responsibility for the payment of all such bills
and shall effect payments of all such bills irrespective of the Mortgagor's

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faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments.

                  SECTION 3.10. Collection Account and Distribution Account.

                  (a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain one or more accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than two Business Days after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than one Business Day after the deposit of such funds
into the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it from
and after the Cut-off Date (other than in respect of principal or interest on
the related Mortgage Loans due on or before the Cut-off Date), or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:

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

                  (ii) all payments on account of interest (net of the related
         Servicing Fee) on each Mortgage Loan;

                  (iii) all Insurance Proceeds and Liquidation Proceeds (other
         than proceeds collected in respect of any particular REO Property and
         amounts paid by the Master Servicer in connection with a purchase of
         Mortgage Loans and REO Properties pursuant to Section 9.01);

                  (iv) any amounts required to be deposited pursuant to Section
         3.12 in connection with any losses realized on Permitted Investments
         with respect to funds held in the Collection Account;

                  (v) any amounts required to be deposited by the Master
         Servicer pursuant to the second paragraph of Section 3.14(a) in respect
         of any blanket policy deductibles;

                  (vi) all proceeds of any Mortgage Loan repurchased or
         purchased in accordance with Section 2.03 or Section 9.01; and

                  (vii) all amounts required to be deposited in connection with
         shortfalls in principal amount of Qualified Substitute Mortgage Loans
         pursuant to Section 2.03.

                  For purposes of the immediately preceding sentence, the
Cut-off Date with respect to any Qualified Substitute Mortgage Loan shall be
deemed to be the date of substitution.

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<PAGE>

                  The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges or assumption fees need not be deposited by the Master Servicer in the
Collection Account. In the event the Master Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding. To the extent that the Master Servicer
incorrectly applies any curtailment on any Mortgage Loan, the Master Servicer
may withdraw such amount from the Collection Account to the extent of future
curtailments.

                  (b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 12:00 p.m.
New York time (i) on the Master Servicer Remittance Date, that portion of the
Available Distribution Amount (calculated without regard to the references in
clause (2) of the definition thereof to amounts that may be withdrawn from the
Distribution Account) for the related Distribution Date then on deposit in the
Collection Account and the amount of any funds reimbursable to an Advancing
Person pursuant to Section 3.26, and (ii) on each Business Day as of the
commencement of which the balance on deposit in the Collection Account exceeds
$75,000 following any withdrawals pursuant to the next succeeding sentence, the
amount of such excess, but only if the Collection Account constitutes an
Eligible Account solely pursuant to clause (ii) of the definition of "Eligible
Account." If the balance on deposit in the Collection Account exceeds $75,000 as
of the commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible Account," the Master Servicer shall, on or before 3:00 p.m. New
York time on such Business Day, withdraw from the Collection Account any and all
amounts payable or reimbursable to the Depositor, the Master Servicer, the
Trustee, the Seller or any Sub-Servicer pursuant to Section 3.11 and shall pay
such amounts to the Persons entitled thereto.

                  (c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.12. The Master Servicer shall give notice to
the Trustee and the Depositor of the location of the Collection Account
maintained by it when established and prior to any change thereof. The Trustee
shall give notice to the Master Servicer and the Depositor of the location of
the Distribution Account when established and prior to any change thereof.

                  (d) Funds held in the Collection Account at any time may be
delivered by the Master Servicer to the Trustee for deposit in an account (which
may be the Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and for all
purposes of this Agreement shall be deemed to be a part of the Collection
Account; PROVIDED, HOWEVER, that the Trustee shall have the sole authority to
withdraw any funds held pursuant to this subsection (d). In the event the Master
Servicer shall deliver to the Trustee for deposit in the Distribution Account
any amount not required to be deposited therein, it may at any time request that
the Trustee withdraw such amount from the Distribution Account and remit to it
any such amount, any provision herein to the contrary notwithstanding. In
addition, the Master Servicer shall deliver

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<PAGE>

to the Trustee from time to time for deposit, and upon written notification from
the Master Servicer, the Trustee shall so deposit, in the Distribution Account:

                  (i) any P&I Advances, as required pursuant to Section 4.03,
         unless delivered directly to the Trustee by an Advancing Person;

                  (ii) any amounts required to be deposited pursuant to Section
         3.23(d) or (f) in connection with any REO Property;

                  (iii) any amounts to be paid by the Master Servicer in
         connection with a purchase of Mortgage Loans and REO Properties
         pursuant to Section 9.01; and

                  (iv) any amounts required to be deposited pursuant to Section
         3.24 in connection with any Prepayment Interest Shortfalls.

                  (e) The Master Servicer shall deposit in the Collection
Account any amounts required to be deposited pursuant to Section 3.12(b) in
connection with losses realized on Permitted Investments with respect to funds
held in the Collection Account.

                  SECTION 3.11. Withdrawals from the Collection Account and
                                Distribution Account.

                  (a) The Master Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes or as
described in Section 4.03:

                  (i) to remit to the Trustee for deposit in the Distribution
         Account the amounts required to be so remitted pursuant to Section
         3.10(b) or permitted to be so remitted pursuant to the first sentence
         of Section 3.10(d);

                  (ii) subject to Section 3.16(d), to reimburse the Master
         Servicer for P&I Advances, but only to the extent of amounts received
         which represent Late Collections (net of the related Servicing Fees) of
         Monthly Payments on Mortgage Loans with respect to which such P&I
         Advances were made in accordance with the provisions of Section 4.03;

                  (iii) subject to Section 3.16(d), to pay the Master Servicer
         or any Sub-Servicer (A) any unpaid Servicing Fees, (B) any unreimbursed
         Servicing Advances with respect to each Mortgage Loan, but only to the
         extent of any Liquidation Proceeds, Insurance Proceeds or other amounts
         as may be collected by the Master Servicer from a Mortgagor, or
         otherwise received with respect to such Mortgage Loan and (C) any
         nonrecoverable Servicing Advances following the final liquidation of a
         Mortgage Loan, but only to the extent that Late Collections,
         Liquidation Proceeds and Insurance Proceeds received with respect to
         such Mortgage Loan are insufficient to reimburse the Master Servicer or
         any Sub-Servicer for such Servicing Advances;

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<PAGE>

                  (iv) to pay to the Master Servicer as servicing compensation
         (in addition to the Servicing Fee) on the Master Servicer Remittance
         Date any interest or investment income earned on funds deposited in the
         Collection Account;

                  (v) to pay to the Master Servicer, the Depositor or the
         Seller, as the case may be, with respect to each Mortgage Loan that has
         previously been purchased or replaced pursuant to Section 2.03 or
         Section 3.16(c) all amounts received thereon subsequent to the date of
         purchase or substitution, as the case may be;

                  (vi) to reimburse the Master Servicer for any P&I Advance
         previously made which the Master Servicer has determined to be a
         Nonrecoverable P&I Advance in accordance with the provisions of Section
         4.03;

                  (vii) to reimburse the Master Servicer or the Depositor for
         expenses incurred by or reimbursable to the Master Servicer or the
         Depositor, as the case may be, pursuant to Section 6.03;

                  (viii) to reimburse the Master Servicer or the Trustee, as the
         case may be, for expenses reasonably incurred in respect of the breach
         or defect giving rise to the purchase obligation under Section 2.03 of
         this Agreement that were included in the Purchase Price of the Mortgage
         Loan, including any expenses arising out of the enforcement of the
         purchase obligation;

                  (ix) to pay, or to reimburse the Master Servicer for advances
         in respect of expenses incurred in connection with any Mortgage Loan
         pursuant to Section 3.16(b); and

                  (x) to clear and terminate the Collection Account pursuant to
         Section 9.01.

                  The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and
(ix) above. The Master Servicer shall provide written notification to the
Trustee, on or prior to the next succeeding Master Servicer Remittance Date,
upon making any withdrawals from the Collection Account pursuant to subclause
(vii) above.

                  (b) The Trustee shall, from time to time, make withdrawals
from the Distribution Account, for any of the following purposes, without
priority:

                  (i) to make distributions to Certificateholders in accordance
         with Section 4.01;

                  (ii) to pay to itself amounts to which each is entitled
         pursuant to Section 8.05 and any other Extraordinary Trust Fund
         Expenses;

                  (iii) to pay itself any interest income earned on funds
         deposited in the Distribution Account pursuant to Section 3.12(c);

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<PAGE>

                  (iv) to reimburse itself pursuant to Section 7.02 or pursuant
         to Section 7.01 to the extent such amounts in Section 7.01 were not
         reimbursed by the Master Servicer;

                  (v) to pay any amounts in respect of taxes pursuant to
         10.01(g)(iii);

                  (vi) to pay to an Advancing Person reimbursements for P&I
         Advances and/or Servicing Advances pursuant to Section 3.26;

                  (vii) to reimburse itself for any P&I Advance made by it under
         Section 7.01 (if not reimbursed by the Master Servicer) to the same
         extent the Master Servicer would be entitled to reimbursement under
         Section 3.11(a); and

                  (viii) to clear and terminate the Distribution Account
         pursuant to Section 9.01.

                  SECTION 3.12. Investment of Funds in the Collection Account
                                and the Distribution Account.

                  (a) The Master Servicer may direct any depository institution
maintaining the Collection Account (for purposes of this Section 3.12, an
"Investment Account"), and the Trustee, in its individual capacity, may direct
any depository institution maintaining the Distribution Account (for purposes of
this Section 3.12, also an "Investment Account"), to invest the funds in such
Investment Account in one or more Permitted Investments bearing interest or sold
at a discount, and maturing, unless payable on demand, (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if a Person other
than the Trustee is the obligor thereon, and (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee is the obligor thereon. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account shall be made in the name of the Trustee (in its capacity
as such) or in the name of a nominee of the Trustee. The Trustee shall be
entitled to sole possession (except with respect to investment direction of
funds held in the Collection Account and any income and gain realized thereon)
over each such investment, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Trustee or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Trustee or its nominee. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Trustee shall:

                  (x) consistent with any notice required to be given
         thereunder, demand that payment thereon be made on the last day such
         Permitted Investment may otherwise mature hereunder in an amount equal
         to the lesser of (1) all amounts then payable thereunder and (2) the
         amount required to be withdrawn on such date; and

                  (y) demand payment of all amounts due thereunder promptly upon
         determination by a Responsible Officer of the Trustee that such
         Permitted Investment would not constitute a Permitted Investment in
         respect of funds thereafter on deposit in the Investment Account.

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<PAGE>

                  (b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the Master Servicer,
shall be for the benefit of the Master Servicer and shall be subject to its
withdrawal in accordance with Section 3.11. The Master Servicer shall deposit in
the Collection Account the amount of any loss of principal incurred in respect
of any such Permitted Investment made with funds in such accounts immediately
upon realization of such loss.

                  (c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trustee, shall
be for the benefit of the Trustee and shall be subject to its withdrawal at any
time. The Trustee shall deposit in the Distribution Account, the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.

                  (d) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the Holders of Certificates representing more
than 50% of the Voting Rights allocated to any Class of Certificates, shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.

                  SECTION 3.13. Maintenance of the Primary Mortgage Insurance
                                Policies; Collections Thereunder.

                  The Master Servicer will maintain or cause the related
Sub-Servicer, if any, to maintain in full force and effect, if required under
the Mortgage Loan Purchase Agreement and to the extent available, a Primary
Mortgage Insurance Policy with respect to each Mortgage Loan so insured as of
the Closing Date (or, in the case of a Qualified Substitute Mortgage Loan, on
the date of substitution). Such coverage will be maintained with respect to each
such Mortgage Loan for so long as it is outstanding, subject to any applicable
laws or until the related Loan-to-Value Ratio is reduced to less than or equal
to 80% based on Mortgagor payments. The Master Servicer shall cause the premium
for each Primary Mortgage Insurance Policy to be paid on a timely basis and
shall pay such premium out of its own funds if it is not otherwise paid. The
Master Servicer or the related Sub-Servicer, if any, will not cancel or refuse
to renew any such Primary Mortgage Insurance Policy in effect on the Closing
Date (or, in the case of a Qualified Substitute Mortgage Loan, on the date of
substitution) that is required to be kept in force under this Agreement unless a
replacement Primary Mortgage Insurance Policy for such canceled or non-renewed
policy is obtained from and maintained with a Qualified Insurer.

                  The Master Servicer shall not take, or permit any Sub-Servicer
to take, any action which would result in non-coverage under any applicable
Primary Mortgage Insurance Policy of any loss which, but for the actions of the
Master Servicer or Sub-Servicer, would have been covered thereunder. The Master
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under each Primary Mortgage Insurance
Policy. In connection with any assumption and modification agreement or
substitution of liability agreement entered into or to be entered into pursuant
to Section 3.15, the Master Servicer shall promptly notify

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<PAGE>

the insurer under the related Primary Mortgage Insurance Policy, if any, of such
assumption in accordance with the terms of such policies and shall take all
actions which may be required by such insurer as a condition to the continuation
of coverage under the Primary Mortgage Insurance Policy. If any such Primary
Mortgage Insurance Policy is terminated as a result of such assumption, the
Master Servicer or the related Sub-Servicer shall obtain a replacement Primary
Mortgage Insurance Policy as provided above.

                  In connection with its activities as administrator and
servicer of the Mortgage Loans, the Master Servicer agrees to prepare and
present, on behalf of itself, the Trustee and the Certificateholders, claims to
the insurer under any Primary Mortgage Insurance Policy in a timely fashion in
accordance with the terms of such policies and, in this regard, to take such
action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policy respecting a defaulted Mortgage Loan. Any amounts collected by
the Master Servicer under any Primary Mortgage Insurance Policy shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.11; and any amounts collected by the Master Servicer under any Primary
Mortgage Insurance Policy in respect of any REO Property shall be deposited in
the Collection Account, subject to withdrawal pursuant to Section 3.23. In those
cases in which a Mortgage Loan is serviced by a Sub-Servicer, the Sub-Servicer,
on behalf of itself, the Trustee, and the Certificateholders, will present
claims to the insurer under any Primary Mortgage Insurance Policy and all
collections thereunder shall be deposited initially in the Sub-Servicing
Account.

                  SECTION 3.14. Maintenance of Hazard Insurance and Errors and
                                Omissions and Fidelity Coverage.

                  (a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
principal balance of such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (iii) the maximum insurable value of
the improvements which are a part of such Mortgaged Property, in each case in an
amount not less than such amount as is necessary to avoid the application of any
coinsurance clause contained in the related hazard insurance policy. The Master
Servicer shall also cause to be maintained fire insurance with extended coverage
on each REO Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage Loan
at the time it became an REO Property, plus accrued interest at the Mortgage
Rate and related Servicing Advances. The Master Servicer will comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected by the
Master Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.11, if received in respect of a Mortgage Loan, or in the REO Account,
subject to withdrawal pursuant to Section 3.23, if received in respect of an REO
Property. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal

                                      -67-

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balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, the Master
Servicer will cause to be maintained a flood insurance policy in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the unpaid principal balance of the related Mortgage Loan and (ii) the maximum
amount of such insurance available for the related Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program).

                  In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of B+:V
or better in Best's Key Rating Guide (or such other rating that is comparable to
such rating) insuring against hazard losses on all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first two sentences of this Section 3.14, it being understood and agreed
that such policy may contain a deductible clause, in which case the Master
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.

                  (b) The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of Fannie Mae or Freddie Mac, unless the Master Servicer has obtained a waiver
of such requirements from Fannie Mae or Freddie Mac. The Master Servicer shall
provide the Trustee (upon the Trustee's reasonable request) with copies of any
such insurance policies and fidelity bond. The Master Servicer shall be deemed
to have complied with this provision if an Affiliate of the Master Servicer has
such errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Master Servicer. Any such errors and omissions policy and fidelity bond
shall by its terms not be cancellable without thirty days' prior written notice
to the Trustee. The Master Servicer shall also cause each Sub-Servicer to
maintain a policy of insurance covering errors and omissions and a fidelity bond
which would meet such requirements.

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<PAGE>

                  SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption
                                Agreements.

                  The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "dueon-sale" clause, if any, applicable thereto; PROVIDED,
HOWEVER, that the Master Servicer shall not exercise any such rights if
prohibited by law from doing so. If the Master Servicer reasonably believes it
is unable under applicable law to enforce such "due-on-sale" clause, or if any
of the other conditions set forth in the proviso to the preceding sentence
apply, the Master Servicer will enter into an assumption and modification
agreement from or with the person to whom such property has been conveyed or is
proposed to be conveyed, pursuant to which such person becomes liable under the
Mortgage Note and, to the extent permitted by applicable state law, the
Mortgagor remains liable thereon. The Master Servicer is also authorized to
enter into a substitution of liability agreement with such person, pursuant to
which the original Mortgagor is released from liability and such person is
substituted as the Mortgagor and becomes liable under the Mortgage Note,
provided that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Master Servicer. In connection with
any assumption or substitution, the Master Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Master Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any hazard insurance policy, or a new
policy meeting the requirements of Section 3.14 is obtained. Any fee collected
by the Master Servicer in respect of an assumption or substitution of liability
agreement will be retained by the Master Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Rate and the
amount of the Monthly Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Master Servicer shall notify the
Trustee that any such substitution or assumption agreement has been completed by
forwarding to the Trustee the executed original of such substitution or
assumption agreement, which document shall be added to the related Mortgage File
and shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part thereof.

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.15,
the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.

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                  SECTION 3.16. Realization Upon Defaulted Mortgage Loans.

                  (a) The Master Servicer shall, consistent with the servicing
standard set forth in Section 3.01, foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.07. The Master
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; PROVIDED, HOWEVER, that such costs and expenses will be
recoverable as Servicing Advances by the Master Servicer as contemplated in
Section 3.11 and Section 3.23. The foregoing is subject to the provision that,
in any case in which Mortgaged Property shall have suffered damage from an
Uninsured Cause, the Master Servicer shall not be required to expend its own
funds toward the restoration of such property unless it shall determine in its
discretion that such restoration will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself for such expenses.

                  (b) Notwithstanding the foregoing provisions of this Section
3.16 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Fund, the Master Servicer or the
Certificateholders would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Master Servicer has also previously
determined, based on its reasonable judgment and a report prepared by a Person
who regularly conducts environmental audits using customary industry standards,
that:

                  (1) such Mortgaged Property is in compliance with applicable
         environmental laws or, if not, that it would be in the best economic
         interest of the Trust Fund to take such actions as are necessary to
         bring the Mortgaged Property into compliance therewith; and

                  (2) there are no circumstances present at such Mortgaged
         Property relating to the use, management or disposal of any hazardous
         substances, hazardous materials, hazardous wastes, or petroleum-based
         materials for which investigation, testing, monitoring, containment,
         clean-up or remediation could be required under any federal, state or
         local law or regulation, or that if any such materials are present for
         which such action could be required, that it would be in the best
         economic interest of the Trust Fund to take such actions with respect
         to the affected Mortgaged Property.

                  The cost of the environmental audit report contemplated by
this Section 3.23 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

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                  If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleumbased materials affecting any such Mortgaged Property, then
the Master Servicer shall take, consistent with the servicing standard set forth
in Section 3.01, such action as it deems to be in the best economic interest of
the Trust Fund. The cost of any such compliance, containment, cleanup or
remediation shall be advanced by the Master Servicer, subject to the Master
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

                  (c) The Master Servicer may at its option purchase from the
Trust Fund any Mortgage Loan on or after the 90th day on which the payment on
such Mortgage Loan was due and payable and not received, which the Master
Servicer determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee prior to purchase), at a price equal to the Purchase Price; PROVIDED,
HOWEVER, that the Master Servicer shall purchase any such Mortgage Loans or
related REO Properties on the basis of delinquency, purchasing the most
delinquent Mortgage Loans or related REO Properties first. The Purchase Price
for any Mortgage Loan purchased hereunder shall be deposited in the Collection
Account, and the Trustee, upon receipt of written certification from the Master
Servicer of such deposit, shall release or cause to be released to the Master
Servicer the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Master Servicer shall furnish and as shall be necessary to vest in the Master
Servicer title to any Mortgage Loan released pursuant hereto.

                  The Master Servicer may at any time relinquish its rights to
purchase delinquent Mortgage Loans pursuant to this Section 3.16(c) in writing
delivered to the Trustee, and from and after the taking of such action by the
Master Servicer, the provisions of this Section 3.16(c) shall no longer be of
any force or effect.

                  (d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: FIRST, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and P&I Advances, pursuant to Section 3.11(a)(ii) or (a)(iii)(A) or
(B); SECOND, to accrued and unpaid interest on the Mortgage Loan, to the date of
the Final Recovery Determination, or to the Due Date prior to the Distribution
Date on which such amounts are to be distributed if not in connection with a
Final Recovery Determination; and THIRD, as a recovery of principal of the
Mortgage Loan. If the amount of the recovery so allocated to interest is less
than the full amount of accrued and unpaid interest due on such Mortgage Loan,
the amount of such recovery will be allocated by the Master Servicer as follows:
FIRST, to unpaid Servicing Fees; and SECOND, to the balance of the interest then
due and owing. The portion of the recovery so allocated to unpaid Servicing Fees
shall be reimbursed to the Master Servicer or any Sub-Servicer pursuant to
Section 3.11(a)(iii)(A).

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                  SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.

                  (a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer will
immediately notify the Trustee by delivery of two copies of a Request for
Release in the form of Exhibit E (which shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Collection Account pursuant to Section
3.10 have been or will be so deposited) of a Servicing Officer and shall request
delivery to it of the Mortgage File. Upon receipt of such copies of the Request
for Release, the Trustee shall promptly release the related Mortgage File to the
Master Servicer. If a Mortgage Loan has been paid in full or liquidated, the
Trustee may return the related Mortgage File to the Master Servicer without
receiving a Request for Release. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Collection Account or the Distribution Account.

                  (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon
request of the Master Servicer and delivery to the Trustee of a Request for
Release, release the related Mortgage File to the Master Servicer, and the
Trustee shall, at the direction of the Master Servicer, execute such documents
as shall be necessary to the prosecution of any such proceedings. Such Request
for Release shall obligate the Master Servicer to return each and every Mortgage
File to the Trustee when the need therefor by the Master Servicer no longer
exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Collection
Account or the Mortgage File or such document has been delivered to an attorney,
or to a public trustee or other public official as required by law, for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property either judicially or non-judicially, and the Master
Servicer has delivered to the Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
Upon receipt of two copies of a new Request for Release stating that such
Mortgage Loan was liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, the related Mortgage File shall not be required to be returned
to the Trustee.

                  (c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer any court pleadings,
requests for trustee's sale or other documents reasonably necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity. Each such certification shall include a request that such
pleadings or documents be executed by the Trustee and a statement as to the
reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the lien
of the Mortgage, except for the termination of such a lien upon completion of
the foreclosure or trustee's sale.

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                  SECTION 3.18. Servicing Compensation.

                  As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section
3.11(a)(iii)(A) and out of amounts derived from the operation and sale of an REO
Property to the extent permitted by Section 3.23. The right to receive the
Servicing Fee may not be transferred in whole or in part except in connection
with the transfer of all of the Master Servicer's responsibilities and
obligations under this Agreement.

                  Additional servicing compensation in the form of assumption
fees, late payment charges and other similar fees and charges shall be retained
by the Master Servicer (subject to Section 3.24) only to the extent such fees or
charges are received by the Master Servicer. The Master Servicer shall also be
entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account, and pursuant to Section 3.23(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.12 and Section 3.24. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including premiums due under the Primary Insurance
Policies, if any, premiums for the insurance required by Section 3.14, to the
extent such premiums are not paid by the related Mortgagors or by a
Sub-Servicer, servicing compensation of each Sub-Servicer, and to the extent
provided herein in Section 8.05, the fees and expenses of the Trustee) and shall
not be entitled to reimbursement therefor except as specifically provided
herein.

                  SECTION 3.19. Reports to the Trustee; Collection Account
                                Statements.

                  Not later than fifteen days after each Distribution Date, the
Master Servicer shall forward to the Trustee, upon the request of the Trustee, a
statement prepared by the Master Servicer setting forth the status of the
Collection Account as of the close of business on the last day of the calendar
month relating to such Distribution Date and showing, for the period covered by
such statement, the aggregate amount of deposits into and withdrawals from the
Collection Account of each category of deposit specified in Section 3.10(a) and
each category of withdrawal specified in Section 3.11. Such statement may be in
the form of the then current Fannie Mae Monthly Accounting Report for its
Guaranteed Mortgage Pass-Through Program with appropriate additions and changes,
and shall also include information as to the aggregate of the outstanding
principal balances of all of the Mortgage Loans as of the last day of the
calendar month immediately preceding such Distribution Date. Copies of such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon the request and at the expense of the requesting party, provided such
statement is delivered by the Master Servicer to the Trustee.

                  SECTION 3.20. Statement as to Compliance.

                  On or before March 15th of each calendar year commencing in
2004, the Master Servicer will deliver to the Trustee, the Depositor and the
Rating Agency, an Officers' Certificate (in the form attached hereto as Exhibit
I) stating, as to each signatory thereof, that (i) a review of the

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<PAGE>

activities of the Master Servicer during the preceding year and of performance
under this Agreement has been made under such officers' supervision and (ii) to
the best of such officers' knowledge, based on such review, the Master Servicer
has fulfilled all of its obligations under this Agreement throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. Copies of any such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon the request and at the expense of the
requesting party, provided that such statement is delivered by the Master
Servicer to the Trustee.

                  SECTION 3.21. Independent Public Accountants' Servicing
                                Report.

                  Not later than March 15th of each calendar year commencing in
2004, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed fiscal year and (ii) on the basis of an
examination conducted by such firm in accordance with standards established by
the American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub- Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Immediately upon receipt of such report,
the Master Servicer shall furnish a copy of such report to the Trustee, the
Depositor and the Rating Agency. Copies of such statement shall be provided by
the Trustee to any Certificateholder upon request at the Master Servicer's
expense, provided that such statement is delivered by the Master Servicer to the
Trustee. In the event such firm of independent certified public accountants
requires the Trustee to agree to the procedures performed by such firm, the
Master Servicer shall direct the Trustee in writing to so agree; it being
understood and agreed that the Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Master Servicer, and the Trustee
has not made any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.

                  SECTION 3.22. Access to Certain Documentation.

                  The Master Servicer shall provide to the Office of the
Controller of the Currency, the Office of Thrift Supervision, the FDIC, and any
other federal or state banking or insurance regulatory authority that may
exercise authority over any Certificateholder, access to the documentation
regarding the Mortgage Loans required by applicable laws and regulations. Such
access shall be afforded without charge, but only upon reasonable request and
during normal business hours at the offices of the Master Servicer designated by
it. In addition, access to the documentation regarding the Mortgage Loans
required by applicable laws and regulations will be provided to such
Certificateholder, the Trustee and to any Person identified to the Master
Servicer as a prospective

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<PAGE>

transferee of a Certificate, upon reasonable request during normal business
hours at the offices of the Master Servicer designated by it at the expense of
the Person requesting such access.

                  SECTION 3.23. Title, Management and Disposition of REO
                                Property.

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of the Trust Fund and
consistent with the servicing standard set forth in Section 3.01, shall either
sell any REO Property before the close of the third taxable year following the
year the Trust Fund acquires ownership of such REO Property for purposes of
Section 860G(a)(8) of the Code or request from the Internal Revenue Service, no
later than 60 days before the day on which the three- year grace period would
otherwise expire, an extension of the three-year grace period, unless the Master
Servicer shall have delivered to the Trustee and the Depositor an Opinion of
Counsel, addressed to the Trustee and the Depositor, to the effect that the
holding by the Trust Fund of such REO Property subsequent to three years after
its acquisition will not result in the imposition on any Trust REMIC of taxes on
"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause any Trust REMIC to fail to qualify as a REMIC under Federal law at any
time that any Certificates are outstanding. The Master Servicer shall,
consistent with the servicing standard set forth in Section 3.01, manage,
conserve, protect and operate each REO Property for the Certificateholders
solely for the purpose of its prompt disposition and sale in a manner which does
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code or result in the receipt by any
Trust REMIC of any "income from non-permitted assets" within the meaning of
Section 860F(a)(2)(B) of the Code, or any "net income from foreclosure property"
which is subject to taxation under the REMIC Provisions.

                  (b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain with respect to REO Properties an account held in trust for the Trustee
for the benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.

                  (c) The Master Servicer shall have full power and authority,
subject only to the servicing standard set forth in Section 3.01 and the
specific requirements and prohibitions of this Agreement, to do any and all
things in connection with any REO Property as are consistent with the manner in
which the Master Servicer manages and operates similar property owned by the
Master Servicer or any of its Affiliates, all on such terms and for such period
as the Master Servicer deems to be in the best interests of Certificateholders.
In connection therewith, the Master Servicer shall deposit, or cause to be
deposited in the clearing account (which account must be an Eligible Account) in
which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than two Business Days after the Master Servicer's receipt
thereof, and shall thereafter deposit in the REO Account, in no event more than
one Business Day after the deposit of such funds into the clearing account, all
revenues received by it with respect to an REO Property and shall withdraw
therefrom funds

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<PAGE>

necessary for the proper operation, management and maintenance of such REO
Property including, without limitation:

                  (i) all insurance premiums due and payable in respect of such
         REO Property;

                  (ii) all real estate taxes and assessments in respect of such
         REO Property that may result in the imposition of a lien thereon; and

                  (iii) all costs and expenses necessary to maintain such REO
         Property.

                  To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Master
Servicer shall, consistent with the servicing standard set forth in Section
3.01, advance from its own funds such amount as is necessary for such purposes
if, but only if, the Master Servicer would make such advances if the Master
Servicer owned the REO Property and if in the Master Servicer's judgment, the
payment of such amounts will be recoverable from the rental or sale of the REO
Property.

                  Notwithstanding the foregoing, none of the Master Servicer or
the Trustee shall:

                  (i) authorize the Trust Fund to enter into, renew or extend
         any New Lease with respect to any REO Property, if the New Lease by its
         terms will give rise to any income that does not constitute Rents from
         Real Property;

                  (ii) authorize any amount to be received or accrued under any
         New Lease other than amounts that will constitute Rents from Real
         Property;

                  (iii) authorize any construction on any REO Property, other
         than the completion of a building or other improvement thereon, and
         then only if more than ten percent of the construction of such building
         or other improvement was completed before default on the related
         Mortgage Loan became imminent, all within the meaning of Section
         856(e)(4)(B) of the Code; or

                  (iv) authorize any Person to Directly Operate any REO Property
         on any date more than 90 days after its date of acquisition by the
         Trust Fund; unless, in any such case, the Master Servicer has obtained
         an Opinion of Counsel, provided to the Trustee, to the effect that such
         action will not cause such REO Property to fail to qualify as
         "foreclosure property" within the meaning of Section 860G(a)(8) of the
         Code at any time that it is held by the Trust Fund, in which case the
         Master Servicer may take such actions as are specified in such Opinion
         of Counsel.

                  The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:

                  (i) the terms and conditions of any such contract shall not be
         inconsistent herewith;

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<PAGE>

                  (ii) any such contract shall require, or shall be administered
         to require, that the Independent Contractor pay all costs and expenses
         incurred in connection with the operation and management of such REO
         Property, including those listed above and remit all related revenues
         (net of such costs and expenses) to the Master Servicer as soon as
         practicable, but in no event later than thirty days following the
         receipt thereof by such Independent Contractor;

                  (iii) none of the provisions of this Section 3.23(c) relating
         to any such contract or to actions taken through any such Independent
         Contractor shall be deemed to relieve the Master Servicer of any of its
         duties and obligations to the Trustee on behalf of the
         Certificateholders with respect to the operation and management of any
         such REO Property; and

                  (iv) the Master Servicer shall be obligated with respect
         thereto to the same extent as if it alone were performing all duties
         and obligations in connection with the operation and management of such
         REO Property.

                  The Master Servicer shall be entitled to enter into any
agreement with any Independent Contractor performing services for it related to
its duties and obligations hereunder for indemnification of the Master Servicer
by such Independent Contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification. The Master Servicer shall be solely liable
for all fees owed by it to any such Independent Contractor, irrespective of
whether the Master Servicer's compensation pursuant to Section 3.18 is
sufficient to pay such fees.

                  (d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and P&I Advances
made in respect of such REO Property or the related Mortgage Loan. Any income
from the related REO Property received during any calendar months prior to a
Final Recovery Determination, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d), shall be withdrawn by the Master Servicer from
each REO Account maintained by it and deposited into the Distribution Account in
accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date
relating to a Final Recovery Determination with respect to such Mortgage Loan,
for distribution on the related Distribution Date in accordance with Section
4.01.

                  (e) Subject to the time constraints set forth in Section
3.23(a) and consistent with the servicing standard set forth in Section 3.01,
each REO Disposition shall be carried out by the Master Servicer at such price
and upon such terms and conditions as the Master Servicer shall deem necessary
or advisable, as shall be normal and usual in its general servicing activities
for similar properties.

                  (f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance

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<PAGE>

Date in the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).

                  (g) The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.

                  SECTION 3.24. Obligations of the Master Servicer in Respect of
                                Prepayment Interest Shortfalls.

                  The Master Servicer shall deliver to the Trustee for deposit
into the Distribution Account on or before 12:00 p.m. New York time on the
Master Servicer Remittance Date from its own funds an amount equal to the lesser
of (i) the aggregate of the Prepayment Interest Shortfalls for the related
Distribution Date resulting from full or partial Principal Prepayments during
the related Prepayment Period and (ii) the amount of its aggregate Servicing Fee
for the most recently ended calendar month.

                  SECTION 3.25. Obligations of the Master Servicer in Respect of
                                Monthly Payments.

                  In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to
adjustments to Stated Principal Balances that were made by the Master Servicer
in a manner not consistent with the terms of the related Mortgage Note and this
Agreement, the Master Servicer, upon discovery or receipt of notice thereof,
immediately shall deliver to the Trustee for deposit in the Distribution Account
from its own funds the amount of any such shortfall and shall indemnify and hold
harmless the Trust Fund, the Trustee, the Depositor and any successor master
servicer in respect of any such liability. Such indemnities shall survive the
termination or discharge of this Agreement.

                  SECTION 3.26. Advance Facility.

                  (a) Either (i) the Master Servicer or (ii) the Trustee, on
behalf of the Trust Fund, with the consent of the Master Servicer, is hereby
authorized to enter into a facility with any Person which provides that such
Person (an "Advancing Person") may fund P&I Advances and/or Servicing Advances
to the Trust Fund under this Agreement, although no such facility shall reduce
or otherwise affect the Master Servicer's obligation to fund such P&I Advances
and/or Servicing Advances. If the Master Servicer enters into such an Advance
Facility pursuant to this Section 3.26, upon reasonable request of the Advancing
Person, the Trustee shall execute a letter of acknowledgment, confirming its
receipt of notice of the existence of such Advance Facility. If the Trustee
enters into such an Advance Facility pursuant to this Section 3.26, the Master
Servicer shall also be a party to such Advance Facility. To the extent that an
Advancing Person funds any P&I Advance or any Servicing Advance and provides the
Trustee with notice acknowledged by the

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<PAGE>

Master Servicer that such Advancing Person is entitled to reimbursement, such
Advancing Person shall be entitled to receive reimbursement pursuant to this
Agreement for such amount to the extent provided in Section 3.26(b). Such notice
from the Advancing Person must specify the amount of the reimbursement, the
Section of this Agreement that permits the applicable P&I Advance or Servicing
Advance to be reimbursed and the section(s) of the Advance Facility that entitle
the Advancing Person to request reimbursement from the Trustee, rather than the
Master Servicer, and include the Master Servicer's acknowledgment thereto or
proof of an Event of Default under the Advance Facility. The Trustee shall have
no duty or liability with respect to any calculation of any reimbursement to be
paid to an Advancing Person and shall be entitled to rely without independent
investigation on the Advancing Person's notice provided pursuant to this Section
3.26. An Advancing Person whose obligations hereunder are limited to the funding
of P&I Advances and/or Servicing Advances shall not be required to meet the
qualifications of a Master Servicer or a Sub- Servicer pursuant to Section 3.02
hereof and will not be deemed to be a Sub-Servicer under this Agreement.

                  (b) If an advancing facility is entered into, then the Master
Servicer shall not be permitted to reimburse itself therefor under Section
3.11(a)(ii), Section 3.11(a)(iii) and Section 3.11(a)(vi) prior to the
remittance to the Trust Fund, but instead the Master Servicer shall include such
amounts in the applicable remittance to the Trustee made pursuant to Section
3.11(a). The Trustee is hereby authorized to pay to the Advancing Person,
reimbursements for P&I Advances and Servicing Advances from the Distribution
Account to the same extent the Master Servicer would have been permitted to
reimburse itself for such P&I Advances and/or Servicing Advances in accordance
with Section 3.11(a)(ii), Section 3.11(a)(iii) and Section 3.11(a)(vi), as the
case may be, had the Master Servicer itself funded such P&I Advance or Servicing
Advance. The Trustee is hereby authorized to pay directly to the Advancing
Person such portion of the Servicing Fee as the parties to any advancing
facility agree in writing.

                  (c) All P&I Advances and Servicing Advances made pursuant to
the terms of this Agreement shall be deemed made and shall be reimbursed on a
"first in-first out" (FIFO) basis.

                  (d) Any amendment to this Section 3.26 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.26,
including amendments to add provisions relating to a successor master servicer,
may be entered into by the Trustee and the Master Servicer without the consent
of any Certificateholder, notwithstanding anything to the contrary in this
Agreement.

                                      -79-

<PAGE>

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

                  SECTION 4.01. Distributions.

                  (a)(1) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account an amount equal to the Available Distribution
Amount and distribute the following amounts, in the following order of priority:

                  (i) concurrently, to distributions of interest in respect of
         the Class A Certificates, the Class S Certificates, the Class IO
         Certificates and on the first Distribution Date, the Residual
         Certificates, on a PRO RATA basis based on the entitlement of each such
         Class, in an amount equal to the Senior Interest Distribution Amount in
         respect of such Certificates for such Distribution Date;

                  (ii) to the extent of the Class PO Principal Distribution
         Amount, to distributions of principal to the Class PO Certificates
         (applied to reduce the Certificate Principal Balances of such
         Certificates), until the Certificate Principal Balance of the Class PO
         Certificates has been reduced to zero;

                  (iii) to the extent of the Senior Principal Distribution
         Amount, to distributions of principal to the Class A Certificates (in
         the priority set forth below, with respect to the Group II Class A
         Certificates) and on the first Distribution Date (from the Senior
         Principal Distribution Amount relating to the Group II Mortgage Loans),
         the Residual Certificates (applied to reduce the Certificate Principal
         Balance of such Certificates), until the Certificate Principal Balance
         of the Class A Certificates and the Residual Certificates has been
         reduced to zero;

                  (iv) to distributions of interest in respect of the
         Subordinate Certificates, other than the Class of Subordinate
         Certificates with the highest numerical designation then outstanding,
         in an amount (allocable among such Certificates PRO RATA in accordance
         with the respective amounts payable as to each pursuant to this clause
         (iv), in the order of priority from the Class of Subordinate
         Certificates with the lowest numerical designation to the Class of
         Subordinate Certificates with the highest numerical designation
         entitled to a distribution of interest pursuant to this clause (iv))
         equal to the aggregate of the Interest Distribution Amounts in respect
         of such Certificates for such Distribution Date;

                  (v) to distributions of principal to the Class PO Certificates
         (applied to reduce the Certificate Principal Balance of such
         Certificates) in an amount equal to the excess, if any, of the related
         Class PO Percentage of the Stated Principal Balance of each related
         Class PO Mortgage Loan as to which a Final Liquidation has occurred,
         over the amount distributed in respect of such Class PO Mortgage Loan
         to the related Class PO Certificates pursuant to clause (ii) above;

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<PAGE>

                  (vi) to distributions in respect of the Class of Subordinate
         Certificates with the highest numerical designation then outstanding,
         in an amount equal to the Interest Distribution Amount in respect of
         such Certificates for such Distribution Date;

                  (vii) to the Holders of the Classes of the Subordinate
         Certificates, an aggregate amount equal to the Subordinate Principal
         Distribution Amount for such Distribution Date (applied to reduce the
         Certificate Principal Balances of such Certificates), allocable among
         the Classes of Subordinate Certificates PRO RATA in accordance with the
         respective amounts payable as to each such Class pursuant to the
         priorities and amounts set forth in Section 4.01(b)(i);

                  (viii) to the Excess Diverted Interest Reserve Account, the
         Excess Diverted Interest Reserve Amount, if any, and

                  (ix) to the Holders of the Class R Certificates, any remaining
         amounts.

                  Distributions of the Senior Principal Distribution Amount
relating to the Group II Class A Certificates on each Distribution Date will be
made as follows:

                  (i) first, to the Holders of the Class A-2 Certificates, the
         Class A-2 Principal Distribution Percentage of the related Senior
         Principal Distribution Amount, until the Certificate Principal Balance
         of the Class A-2 Certificates has been reduced to zero;

                  (ii) second, to the Holders of the Class A-4 Certificates, an
         amount equal to the Class A-4 Principal Distribution Amount, until the
         Certificate Principal Balance of the Class A-4 Certificates has been
         reduced to zero; and

                  (iii) third, sequentially, to the Holders of the Class A-3
         Certificates, the Class A-4 Certificates and the Class A-2
         Certificates, until the Certificate Principal Balances thereof have
         been reduced to zero.

                  (2) All references above to the Certificate Principal Balance
of any Class of Certificates shall be to the Certificate Principal Balance of
such Class prior to the allocation of Extraordinary Trust Fund Expenses and
Realized Losses, in each case allocated to such Class of Certificates, on such
Distribution Date pursuant to Section 4.04.

                  (b)(i) On each Distribution Date, the aggregate distributions
of principal made on such date in respect of the Subordinate Certificates
pursuant to Section 4.01(a)(1)(vii) above shall be applied among the various
Classes thereof, in the order of priority from the Class of Subordinate
Certificates with the lowest numerical designation to the Class of Subordinate
Certificates with the highest numerical designation, in each case to the extent
of remaining available funds up to the amount allocable to such Class for such
Distribution Date and in each case until the Certificate Principal Balance of
each such Class is reduced to zero, in an amount with respect to each such Class
equal to the sum of (X) the related Class B Percentage of the amounts described
in clauses (i) through (v) of clause (a) of the definition of Subordinate
Principal Distribution Amount, (Y) the portion of the amounts described in
clauses (b) and (c) of the definition of Subordinate Principal

                                      -81-

<PAGE>

Distribution Amount allocable to such Class pursuant to Section 4.01(b)(ii)
below and (Z) the excess, if any, of the amount required to be distributed to
such Class pursuant to this Section 4.01(b)(i) for the immediately preceding
Distribution Date, over the aggregate distributions of principal made in respect
of such Class of Certificates on such immediately preceding Distribution Date
pursuant to Section 4.01 to the extent that any such excess is not attributable
to Realized Losses which were allocated to Subordinate Certificates with a lower
priority pursuant to Section 4.04.

                  (ii) On any Distribution Date, the portion of (a) all net
Liquidation Proceeds and Insurance Proceeds with respect to any Mortgage Loans
that were the subject of a Final Recovery Determination in the related
Prepayment Period and (b) all Principal Prepayments received in respect of the
Mortgage Loans in the related Prepayment Period, allocable to principal and not
included in the Senior Principal Distribution Amount and the Class PO Principal
Distribution Amount, will be allocated on a PRO RATA basis among the following
Classes of Subordinate Certificates (each, an "Eligible Class") in proportion to
the respective outstanding Certificate Principal Balances thereof: (i) the Class
B-1 Certificates, (ii) the Class B-2 Certificates, if on such Distribution Date
the aggregate percentage interest in the Trust Fund evidenced by the Class B-2
Certificates, the Class B-3 Certificates, the Class B-4 Certificates, the Class
B-5 Certificates and the Class B-6 Certificates equal or exceeds
3.100066747987680% before giving effect to distributions on such Distribution
Date, (iii) the Class B-3 Certificates, if on such Distribution Date the
aggregate percentage interest in the Trust Fund evidenced by the Class B-3
Certificates, the Class B-4 Certificates, the Class B-5 Certificates and the
Class B-6 Certificates equal or exceeds 2.000103079918800% before giving effect
to distributions on such Distribution Date, (iv) the Class B-4 Certificates, if
on such Distribution Date the aggregate percentage interest in the Trust Fund
evidenced by the Class B-4 Certificates, the Class B-5 Certificates and the
Class B-6 Certificates equal or exceeds 1.200135377007570% before giving effect
to distributions on such Distribution Date, (v) the Class B-5 Certificates, if
on such Distribution Date the aggregate percentage interest in the Trust Fund
evidenced by the Class B-5 Certificates and the Class B-6 Certificates equal or
exceeds 0.850161621832811% before giving effect to distributions on such
Distribution Date and (vi) the Class B-6 Certificates, if on such Distribution
Date the percentage interest in the Trust Fund evidenced by the Class B-6
Certificates equals or exceeds 0.600208059219767% before giving effect to
distributions on such Distribution Date. Notwithstanding the foregoing, if the
application of the foregoing on any Distribution Date as provided in Section
4.01 would result in a distribution in respect of principal to any Class or
Classes of Subordinate Certificates in an amount greater than the remaining
Certificate Principal Balance thereof (any such Class, a "Maturing Class") then:
(a) the amount to be allocated to each Maturing Class shall be reduced to a
level that, when applied as described above, would exactly reduce the
Certificate Principal Balance of such Class to zero and (b) the total amount of
the reductions pursuant to clause (a) above in the amount to be allocated to the
Maturing Class or Classes shall be allocated among the remaining Eligible
Classes on a PRO RATA basis in proportion to the respective outstanding
Certificate Principal Balances thereof prior to the allocation thereto of any of
the amounts described in the preceding sentence. Furthermore, if a Class of
Class B Certificates is not an Eligible Class, any amounts allocable to
principal and distributable pursuant to this Section 4.01(b)(ii) will be
distributed among the Class B Certificates that are Eligible Classes in the
manner set forth above.

                  (c) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates in such Class based

                                      -82-

<PAGE>

on their respective Percentage Interests. Payments in respect of each Class of
Certificates on each Distribution Date will be made to the Holders of the
respective Class of record on the related Record Date (except as otherwise
provided in Section 9.01 respecting the final distribution on such Class), based
on the aggregate Percentage Interest represented by their respective
Certificates, and shall be made by wire transfer of immediately available funds
to the account of any such Holder at a bank or other entity having appropriate
facilities therefor, if such Holder shall have so notified the Trustee in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date or otherwise by check mailed by first class mail to
the address of such Holder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such final
distribution.

                  Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the Depositor
or the Master Servicer shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.

                  (d) The rights of the Certificateholders to receive
distributions in respect of the Certificates, and all interests of the
Certificateholders in such distributions, shall be as set forth in this
Agreement. None of the Holders of any Class of Certificates, the Trustee or the
Master Servicer shall in any way be responsible or liable to the Holders of any
other Class of Certificates in respect of amounts properly previously
distributed on the Certificates.

                  (e) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trustee shall, no
later than five days after the related Determination Date, mail on such date to
each Holder of such Class of Certificates a notice to the effect that:

                  (i) the Trustee expects that the final distribution with
         respect to such Class of Certificates will be made on such Distribution
         Date, but only upon presentation and surrender of such Certificates at
         the office of the Trustee therein specified, and

                  (ii) no interest shall accrue on such Certificates from and
         after the end of the related Interest Accrual Period.

                  Any funds not distributed to any Holder or Holders of
Certificates of such Class on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust by the Trustee and credited to the account of the
appropriate nontendering Holder or Holders. If any Certificates as to which
notice has been given pursuant to this Section 4.01(e) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trustee shall mail a second notice to the remaining non-

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<PAGE>

tendering Certificateholders to surrender their Certificates for cancellation in
order to receive the final distribution with respect thereto. If within one year
after the second notice all such Certificates shall not have been surrendered
for cancellation, the Trustee shall, directly or through an agent, mail a final
notice to remaining non-tendering Certificateholders concerning surrender of
their Certificates and shall continue to hold any remaining funds for the
benefit of non-tendering Certificateholders. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in such trust fund. If within one year after
the final notice any such Certificates shall not have been surrendered for
cancellation, the Trustee shall pay to Citigroup Global Markets Inc. all such
amounts, and all rights of non-tendering Certificateholders in or to such
amounts shall thereupon cease. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(e).

                  SECTION 4.02. Statements to Certificateholders.

                  On each Distribution Date, based, as applicable, on
information provided to it by the Master Servicer, the Trustee shall prepare and
make available to each Holder of the Regular Certificates, the Master Servicer
and the Rating Agencies, a statement as to the distributions to be made on such
Distribution Date containing the following information:

                  (i) the amount of the distribution made on such Distribution
         Date to the Holders of Certificates of each such Class allocable to
         principal;

                  (ii) the amount of the distribution made on such Distribution
         Date to the Holders of Certificates of each such Class allocable to
         interest;

                  (iii) the aggregate amount of servicing compensation received
         by the Master Servicer in respect of related Due Period and such other
         customary information as the Trustee deems necessary or desirable, or
         which a Certificateholder reasonably requests, to enable
         Certificateholders to prepare their tax returns;

                  (iv) the aggregate amount of P&I Advances for each Loan Group
         for such Distribution Date;

                  (v) the aggregate Stated Principal Balance of the Mortgage
         Loans and any REO Properties in each Loan Group at the close of
         business on such Distribution Date;

                  (vi) the number, aggregate principal balance, weighted average
         remaining term to maturity and weighted average Mortgage Rate of the
         Mortgage Loans in each Loan Group as of the related Due Date;

                  (vii) the number and aggregate unpaid principal balance of
         Mortgage Loans in each Loan Group that are (a) delinquent 30 to 59
         days, (b) delinquent 60 to 89 days, (c) delinquent 90 or more days in
         each case, as of the last day of the preceding calendar month, (d) as
         to which foreclosure proceedings have been commenced and (e) with
         respect to which the

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<PAGE>

         related Mortgagor has filed for protection under applicable bankruptcy
         laws, with respect to whom bankruptcy proceedings are pending or with
         respect to whom bankruptcy protection is in force;

                  (viii) with respect to any Mortgage Loan in either Loan Group
         that became an REO Property during the preceding calendar month, the
         loan number of such Mortgage Loan, the unpaid principal balance and the
         Stated Principal Balance of such Mortgage Loan as of the date it became
         an REO Property;

                  (ix) the book value and the Stated Principal Balance of any
         REO Property as of the close of business on the last Business Day of
         the calendar month preceding the Distribution Date;

                  (x) the aggregate amount of Principal Prepayments made during
         the related Prepayment Period;

                  (xi) the aggregate amount of Realized Losses with respect to
         the Mortgage Loans in each Loan Group incurred during the related
         Prepayment Period (or, in the case of Bankruptcy Losses allocable to
         interest, in respect of the related Due Period), separately identifying
         whether such Realized Losses constituted Fraud Losses, Special Hazard
         Losses or Bankruptcy Losses;

                  (xii) the aggregate amount of Extraordinary Trust Fund
         Expenses withdrawn from the Collection Account or the Distribution
         Account for such Distribution Date;

                  (xiii) the aggregate Certificate Principal Balance or Notional
         Amount of each such Class of Certificates, after giving effect to the
         distributions, and allocations of Realized Losses and Extraordinary
         Trust Fund Expenses, made on such Distribution Date, separately
         identifying any reduction thereof due to allocations of Realized Losses
         and Extraordinary Trust Fund Expenses;

                  (xiv) the Certificate Factor for each such Class of
         Certificates applicable to such Distribution Date;

                  (xv) the Interest Distribution Amount in respect of each such
         Class of Certificates (other than the Class PO Certificates) for such
         Distribution Date (separately identifying any reductions in the case of
         Subordinate Certificates resulting from the allocation of Realized
         Losses allocable to interest and Extraordinary Trust Fund Expenses on
         such Distribution Date) and the respective portions thereof, if any,
         remaining unpaid following the distributions made in respect of such
         Certificates on such Distribution Date;

                  (xvi) the aggregate amount of any Prepayment Interest
         Shortfalls for such Distribution Date, to the extent not covered by
         payments by the Master Servicer pursuant to Section 3.24 and the
         aggregate amount of any Prepayment Interest Excess for such
         Distribution Date;

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<PAGE>

                  (xvii) the aggregate amount of Relief Act Interest Shortfalls
         for such Distribution Date;

                  (xviii) the then-applicable Bankruptcy Amount, Fraud Loss
         Amount, and Special Hazard Amount;

                  (xix) the Weighted Average Stripped Interest Rate with respect
         to each Loan Group for such Distribution Date;

                  (xx) with respect to any Mortgage Loan as to which foreclosure
         proceedings have been concluded, the loan number and unpaid principal
         balance of such Mortgage Loan as of the date of such conclusion of
         foreclosure proceedings; and

                  (xxi) the number of Mortgage Loans, the unpaid principal
         balance of such Mortgage Loans as of the date of such Final Liquidation
         and the amount of proceeds (including Liquidation Proceeds and
         Insurance Proceeds) collected in respect of such Mortgage Loans.

                  The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the Master Servicer and the Rating
Agencies via the Trustee's internet website. The Trustee's internet website
shall initially be located at "www.ctslink.com". Assistance in using the website
can be obtained by calling the Trustee's customer service desk at (301)
815-6600. Parties that are unable to use the above distribution options are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Trustee shall have the right to
change the way 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.

                  In the case of information furnished pursuant to subclauses
(i) through (iii) above, the amounts shall be expressed as a dollar amount per
Single Certificate of the relevant Class.

                  Within a reasonable period of time after the end of each
calendar year, the Trustee shall forward to each Person who at any time during
the calendar year was a Holder of a Regular Certificate a statement containing
the information set forth in subclauses (i) through (iii) above, aggregated for
such calendar year or applicable portion thereof during which such person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time are in force.

                  On each Distribution Date, the Trustee shall forward to the
Depositor, each Holder of a Residual Certificate and the Master Servicer, a copy
of the reports forwarded to the Regular Certificateholders on such Distribution
Date and a statement setting forth the amounts, if any, actually distributed
with respect to the Residual Certificates, respectively, on such Distribution
Date.

                                      -86-

<PAGE>

                  Within a reasonable period of time after the end of each
calendar year, the Trustee shall forward to each Person who at any time during
the calendar year was a Holder of a Residual Certificate a statement setting
forth the amount, if any, actually distributed with respect to the Residual
Certificates, as appropriate, aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be prepared by the Trustee and
furnished to such Holders pursuant to the rules and regulations of the Code as
are in force from time to time.

                  Upon request, the Trustee shall forward to each
Certificateholder, during the term of this Agreement, such periodic, special, or
other reports or information, whether or not provided for herein, as shall be
reasonable with respect to the Certificateholder, or otherwise with respect to
the purposes of this Agreement, all such reports or information to be provided
at the expense of the Certificateholder in accordance with such reasonable and
explicit instructions and directions as the Certificateholder may provide. For
purposes of this Section 4.02, the Trustee's duties are limited to the extent
that the Trustee receives timely reports as required from the Master Servicer.

                  On each Distribution Date, the Trustee shall provide Bloomberg
Financial Markets, L.P. ("Bloomberg") cusip level factors for each class of
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Trustee and Bloomberg.

                  SECTION 4.03. Remittance Reports; P&I Advances.

                  (a) On the second Business Day following each Determination
Date, the Master Servicer shall deliver to the Trustee by telecopy (or by such
other means as the Master Servicer and the Trustee may agree from time to time)
a Remittance Report with respect to the related Distribution Date. Such
Remittance Report will include (i) the amount of P&I Advances to be made by the
Master Servicer in respect of the related Distribution Date, the aggregate
amount of P&I Advances outstanding after giving effect to such P&I Advances, and
the aggregate amount of Nonrecoverable P&I Advances in respect of such
Distribution Date and (ii) such other information with respect to the Mortgage
Loans as the Trustee may reasonably require to perform the calculations
necessary to make the distributions contemplated by Section 4.01 and to prepare
the statements to Certificateholders contemplated by Section 4.02. The Trustee
shall not be responsible to recompute, recalculate or verify any information
provided to it by the Master Servicer.

                  (b) The amount of P&I Advances to be made by the Master
Servicer for any Distribution Date shall equal, subject to Section 4.03(d), the
sum of (i) the aggregate amount of Monthly Payments (with each interest portion
thereof net of the related Servicing Fee), due on the related Due Date in
respect of the Mortgage Loans, which Monthly Payments were delinquent as of the
close of business on the related Determination Date and (ii) with respect to
each REO Property, which REO Property was acquired during or prior to the
related Due Period and as to which REO Property an REO Disposition did not occur
during the related Due Period, an amount equal to the excess, if any, of the REO
Imputed Interest on such REO Property for the most recently ended calendar
month, over the net income from such REO Property transferred to the
Distribution Account pursuant to Section 3.23 for distribution on such
Distribution Date.

                                      -87-

<PAGE>

                  On or before 12:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of P&I Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case, it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.03, used by the
Master Servicer in discharge of any such P&I Advance) or (iii) in the form of
any combination of (i) and (ii) aggregating the total amount of P&I Advances to
be made by the Master Servicer with respect to the Mortgage Loans and REO
Properties. Any amounts held for future distribution and so used shall be
appropriately reflected in the Master Servicer's records and replaced by the
Master Servicer by deposit in the Collection Account on or before any future
Master Servicer Remittance Date to the extent that the Available Distribution
Amount for the related Distribution Date (determined without regard to P&I
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.01 on such Distribution Date if such amounts held for
future distributions had not been so used to make P&I Advances. The Trustee will
provide notice to the Master Servicer by telecopy by the close of business on
the Master Servicer Remittance Date in the event that the amount remitted by the
Master Servicer to the Trustee on such Master Servicer Remittance Date is less
than the P&I Advances required to be made by the Master Servicer for the related
Distribution Date.

                  (c) The obligation of the Master Servicer to make such P&I
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from REMIC I pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section.

                  (d) Notwithstanding anything herein to the contrary, no P&I
Advance shall be required to be made hereunder by the Master Servicer if such
P&I Advance would, if made, constitute a Nonrecoverable P&I Advance. The
determination by the Master Servicer that it has made a Nonrecoverable P&I
Advance or that any proposed P&I Advance, if made, would constitute a
Nonrecoverable P&I Advance, shall be evidenced by an Officers' Certificate of
the Master Servicer delivered to the Depositor and the Trustee.

                  SECTION 4.04. Allocation of Extraordinary Trust Fund Expenses
                                and Realized Losses.

                  (a) Prior to each Distribution Date, the Master Servicer shall
determine as to each Mortgage Loan and REO Property: (i) the total amount of
Realized Losses, if any, incurred in connection with any Final Recovery
Determinations made during the related Prepayment Period; (ii) whether and the
extent to which such Realized Losses constituted Fraud Losses or Special Hazard
Losses; and (iii) the respective portions of such Realized Losses allocable to
interest and allocable to principal. Prior to each Distribution Date, the Master
Servicer shall also determine as to each Mortgage Loan: (A) the total amount of
Realized Losses, if any, incurred in connection with any Deficient Valuations
made during the related Prepayment Period; and (B) the total amount of

                                      -88-

<PAGE>

Realized Losses, if any, incurred in connection with Debt Service Reductions in
respect of Monthly Payments due during the related Due Period. The information
described in the two preceding sentences that is to be supplied by the Master
Servicer shall be evidenced by an Officers' Certificate delivered to the Trustee
by the Master Servicer prior to the Determination Date immediately following the
end of (x) in the case of Bankruptcy Losses allocable to interest, the Due
Period during which any such Realized Loss was incurred, and (y) in the case of
all other Realized Losses, the Prepayment Period during which any such Realized
Loss was incurred.

                  (b) With respect to the REMIC I Regular Interests, all
Realized Losses shall be applied in the same manner and in the same priority as
such Realized Losses are applied to the Corresponding Certificates as set forth
in (c) below.

                  (c) All Realized Losses on the Mortgage Loans (other than
Excess Losses) shall be allocated by the Trustee on each Distribution Date as
follows: first, to the Class B-6 Certificates; second, to the Class B-5
Certificates; third, to the Class B-4 Certificates; fourth, to the Class B-3
Certificates; fifth, to the Class B-2 Certificates; and sixth, to the Class B-1
Certificates, in each case until the Certificate Principal Balance thereof has
been reduced to zero. Thereafter, upon the reduction of the Certificate
Principal Balances of the Subordinate Certificates to zero, if Realized Losses
are on a Class IO Mortgage Loan, such Realized Losses will be allocated on any
Distribution Date first, to any amounts on deposit in the Excess Diverted
Interest Reserve Account and second, to the Class A-1 Certificates, if the
Realized Loss is on a Group I Mortgage Loan and to the Group II Class A
Certificates (on a PRO RATA basis based on the Certificate Principal Balance of
each such Class), if the Realized Loss is on a Group II Mortgage Loan. If
Realized Losses are on a Class PO Mortgage Loan, such Realized Losses will be
allocated first, to any amounts on deposit in the Excess Diverted Interest
Reserve Account, second, to the Class PO-1 Certificates, if the Realized Loss is
on a Group I Mortgage Loan and to the Class PO-2 Certificates, if the Realized
Loss is on a Group II Mortgage Loan, in each case, in an amount equal to the
related Class PO Percentage of the Realized Losses and third, the remainder of
the Realized Losses will be allocated on any Distribution Date to the Class A-1
Certificates, if the Realized Loss is on a Group I Mortgage Loan and to the
Group II Class A Certificates (on a PRO RATA basis based on the Certificate
Principal Balance of each such Class), if the Realized Loss is on a Group II
Mortgage Loan. If a Realized Loss is allocated to the Excess Diverted Interest
Reserve Account, the Trustee shall pay the Group I Excess Diverted Interest
Reserve Deposit or the Group II Excess Diverted Interest Reserve Deposit, as
applicable, to the Available Distribution Amount to which the Realized Loss
relates.

                  Excess Losses on a Class IO Mortgage Loan shall be allocated
on any Distribution Date by allocating the related Senior Percentage of the
Excess Loss to the Class A-1 Certificates, if the Realized Loss is on a Group I
Mortgage Loan and to the Group II Class A Certificates (on a PRO RATA basis
based on the Certificate Principal Balance of each such Class), if the Realized
Loss is on a Group II Mortgage Loan, and the Group I Subordinate Percentage or
the Group II Subordinate Percentage, as applicable, of the Excess Loss to the
Subordinate Certificates. Excess Losses on a Class PO Mortgage Loan will be
allocated to the Class PO-1 Certificates, if the Realized Loss is on a Group II
Mortgage Loan and to the Class PO-2 Certificates, if the Realized Loss is on a
Group II Mortgage Loan, in an amount equal to the related Class PO Percentage of
the Excess Losses and the remainder of the Excess Losses will be allocated on
any Distribution Date to the Class A Certificates by allocating the related
Senior Percentage of the Excess Loss to the Class A-1 Certificates, if the

                                      -89-

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Realized Loss is on a Group I Mortgage Loan and to the Group II Class A
Certificates (on a PRO RATA basis based on the Certificate Principal Balance of
each such Class), if the Realized Loss is on a Group II Mortgage Loan, and the
Group I Subordinate Percentage or the Group II Subordinate Percentage, as
applicable, of the Excess Loss to the Subordinate Certificates.

                  Extraordinary Trust Fund Expenses shall be allocated on any
Distribution Date as follows: first, to the Class B-6 Certificates; second, to
the Class B-5 Certificates; third, to the Class B-4 Certificates; fourth, to the
Class B-3 Certificates; fifth, to the Class B-2 Certificates; and sixth, to the
Class B-1 Certificates, in each case until the Certificate Principal Balance of
the related Class has been reduced to zero. Thereafter, the Extraordinary Trust
Fund Expenses will be allocated on any Distribution Date among the Group I
Senior Certificates (other than the Class S-1 Certificates and the Class IO-1
Certificates) or the Group II Senior Certificates (other than the Class S-1
Certificates and the Class IO-2 Certificates), as applicable, on a PRO RATA
basis.

                  As used herein, an allocation of a Realized Loss or
Extraordinary Trust Fund Expense on a "PRO RATA basis" among two or more
specified Classes of Certificates means an allocation on a PRO RATA basis, among
the various Classes so specified, to each such Class of Certificates on the
basis of their then outstanding Certificate Principal Balances prior to giving
effect to distributions to be made on such Distribution Date. All Realized
Losses and all other losses allocated to a Class of Certificates hereunder will
be allocated among the Certificates of such Class in proportion to the
Percentage Interests evidenced thereby.

                  (d) Notwithstanding anything to the contrary herein, in no
event shall the Certificate Principal Balance of a Class A Certificate be
reduced more than once in respect of any particular amount both (i) allocable to
such Certificate in respect of Realized Losses or Extraordinary Trust Fund
Expenses pursuant to Section 4.04 and (ii) payable to the Holder of such
Certificate pursuant to Section 4.01(a) as a portion of the related Senior
Principal Distribution Amount.

                  SECTION 4.05. Compliance with Withholding Requirements.

                  Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.

                  SECTION 4.06. Distributions on the REMIC I Regular Interests.

                  Interest shall be distributable to the REMIC I Regular
Interests in an amount equal to the aggregate amount of the Interest
Distribution Amounts distributable to the Regular Certificates pursuant to
Section 4.01; provided, however, that REMIC I Regular Interest LT-A1 shall be
entitled to the aggregate amount of the Interest Distribution Amounts
distributable to the Class A-1 Certificates and the Class S-1 Certificates and
REMIC I Regular Interest LT-A2, REMIC I Regular Interest LT-A3 and REMIC I
Regular Interest LT-A4 shall be entitled to the aggregate amount of the

                                      -90-

<PAGE>

Interest Distribution Amounts distributable to the Group II Class A Certificates
and the Class S-2 Certificates . Principal shall be distributable to, and
shortfalls, losses and prepayments are allocable to, the REMIC I Regular
Interests as such amounts are distributable and allocable to the Corresponding
Certificates.

                  SECTION 4.07. Commission Reporting.

                  (a) The Trustee and the Master Servicer shall reasonably
cooperate with the Depositor in connection with satisfying the reporting
requirements under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Trustee shall prepare on behalf of the Trust Fund any Forms
8-K and 10-K customary for similar securities as required by the Exchange Act
and the Rules and Regulations of the Securities and Exchange Commission
thereunder, and the Depositor shall sign (or shall cause another entity
acceptable to the Securities and Exchange Commission to sign) and the Trustee
shall file (via the Securities and Exchange Commission's Electronic Data
Gathering and Retrieval System) such forms on behalf of the Depositor (or such
other entity). The Depositor hereby grants to the Trustee a limited power of
attorney to execute any Form 8-K and file each such document on behalf of the
Depositor. Such power of attorney shall continue until 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. Notwithstanding anything
herein to the contrary, the Depositor, and not the Trustee, shall be responsible
for executing each Form 10-K filed on behalf of the Trust.

                  (b) Each Form 8-K shall be filed by the Trustee within 15 days
after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Subject to
Section 4.07(e), prior to March 30th of each year (or such earlier date as may
be required by the Exchange Act and the Rules and Regulations of the Securities
and Exchange Commission), the Trustee shall file a Form 10-K, in substance as
required by applicable law or applicable Security and Exchange Commission
staff's interpretations. The Trustee shall prepare such Form 10-K and provide
the Depositor with such Form 10-K not later than March 20th of each year,
subject to Section 4.07(e). Following its receipt thereof, the Depositor shall
execute such Form 10-K and provide the original of such Form 10-K to the Trustee
not later than March 25th (or, if the applicable March 25th is not a Business
Day, the next succeeding Business Day) of each year; provided, however, that if
the filing of such Form 10-K shall be required to occur on a date earlier than
March 30th of each year as may be required by the Exchange Act and the Rules and
Regulations of the Securities and Exchange Commission, then the time periods for
preparation and execution of such Form 10-K set forth in this sentence shall be
adjusted accordingly). Such Form 10-K when filed shall include as exhibits the
Master Servicer's annual statement of compliance described under Section 3.20
and the accountant's report described under Section 3.21, in each case to the
extent they have been timely delivered to the Trustee. If they are not so timely
delivered, the Trustee shall file an amended Form 10-K including such documents
as exhibits reasonably promptly after they are delivered to the Trustee. The
Trustee shall have no liability with respect to any failure to properly prepare
or file such periodic reports resulting from or relating to the Trustee's
inability or failure to obtain any information not resulting from its own
negligence or willful misconduct. The Form 10-K shall also include a
certification in the form attached hereto as Exhibit J-1 (the "Certification"),
which shall be signed by the senior officer of the Depositor in charge of
securitization.

                                      -91-

<PAGE>

                  (c) In addition, (x) the Trustee shall sign a certification
(in the form attached hereto as Exhibit J-2) for the benefit of the Depositor
and its officers, directors and Affiliates regarding certain aspects of the
Certification (the "Trustee Certification"); provided, however, that the Trustee
shall not undertake an analysis of the accountant's report attached as an
exhibit to the Form 10-K, and (y) the Master Servicer shall sign a certification
(in the form attached hereto as Exhibit J-3) for the benefit of the Depositor,
the Trustee and their officers, directors and Affiliates regarding certain
aspects of the Certification (the "Master Servicer Certification"). The Master
Servicer Certification shall be delivered to the Depositor and the Trustee no
later than March 15th or if such day is not a Business Day, the preceding
Business Day, each year (subject to Section 4.07(e) hereof).

                  In addition, (A) the Trustee shall indemnify and hold harmless
the Depositor and its officers, directors and Affiliates from and against any
actual losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses arising out
of third party claims based upon a breach of the Trustee's obligations under
this Section 4.07 or any material misstatement or omission contained in the
Trustee Certification, and (B) the Master Servicer shall indemnify and hold
harmless the Depositor, the Trustee and their respective officers, directors and
Affiliates from and against any actual losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses that such Person may sustain arising out of third
party claims based upon a breach of the Master Servicer's obligations under this
Section 4.07(c), any material misstatement or omission contained in the Master
Servicer's Certification or any information correctly derived by the Trustee and
included in a Form 8-K or Form 10-K from information provided to the Trustee by
the Master Servicer under this Agreement. If the indemnification provided for
herein is unavailable or insufficient to hold harmless the Depositor, then (i)
the Trustee agrees that it shall contribute to the amount paid or payable by the
Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Trustee on the other and (ii) the Master
Servicer agrees that it shall contribute to the amount paid or payable by the
Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Master Servicer on the other.

                  (d) Upon any filing with the Securities and Exchange
Commission, the Trustee shall promptly deliver to the Depositor a copy of any
executed report, statement or information.

                  (e) Prior to January 30th of the first year in which the
Trustee is able to do so under applicable law, the Trustee shall file a Form 15
Suspension Notification with respect to the Trust Fund.

                  (f) To the extent that, following the Closing Date, the
Depositor certifies that reports and certifications differing from those
required under this Section 4.07 comply with the reporting requirements under
the Exchange Act, the Trustee and the Master Servicer hereby agree that they
will reasonably cooperate to amend the provisions of this Section 4.07 in order
to comply with such amended reporting requirements and such amendment of this
Section 4.07; provided, however, that the Trustee shall not be responsible for
executing any Form 10-K or the Certification.

                                      -92-

<PAGE>

Any such amendment may result in the reduction of the reports filed by the
Depositor under the Exchange Act.

                  SECTION 4.08. Excess Diverted Interest Reserve Account

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain with itself, a separate, segregated trust account titled,
"Excess Diverted Interest Reserve Account, Wells Fargo Bank Minnesota, National
Association, as Trustee, in trust for the registered holders of Citigroup
Mortgage Loan Trust, Series 2003-UP2, Mortgage Pass-Through Certificates."

                  (b) On each Distribution Date as to which there is an Excess
Diverted Interest Reserve Amount payable to a Class of Class A Certificates, the
Trustee shall deposit into the Excess Diverted Interest Reserve Account the
amount of such Excess Diverted Interest Reserve Amount, rather than distributing
such amounts to the Class R Certificateholders. On each such Distribution Date,
the Trustee shall hold all such amounts for the benefit of the Holders of the
Class A Certificates, and will distribute such amounts to the Holders of the
Class A Certificates, in the amounts and priorities set forth in Section 4.01.

                  (c) For federal and state income tax purposes, the Excess
Diverted Interest Reserve Account will be a "qualified reserve fund" within the
meaning of Code Section 860(G)(7)(B).

                  (d) At the written direction of the Holders of a majority in
Percentage Interest in the Class R Certificates, the Trustee shall direct any
depository institution maintaining the Excess Diverted Interest Reserve Account
to invest the funds in such account in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand, (i) no
later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Trustee or an Affiliate manages or advises such
investment, and (ii) no later than the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if the Trustee or an
Affiliate manages or advises such investment. Interest earned on such investment
shall be deposited into the Excess Diverted Interest Reserve Account.

                  (f) For federal tax return and information reporting, the
right of the Holders of the Class A Certificates to receive payments from the
Excess Diverted Interest Reserve Account in respect of any Excess Diverted
Interest Reserve Amount shall be assigned a value of zero.

                  (g) On the final Distribution Date, all Excess Diverted
Interest Reserve Amounts remaining in the Excess Diverted Interest Reserve
Account, if any, shall be paid to the Holders of the Class R Certificates.

                                      -93-

<PAGE>

                                    ARTICLE V

                                THE CERTIFICATES

                  SECTION 5.01. The Certificates.

                  (a) The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in REMIC I. At the Closing Date, the aggregate Certificate Principal
Balance of the Certificates will equal the aggregate Stated Principal Balance of
the Mortgage Loans.

                  The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-13. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the related Class.

                  Upon original issue, the Certificates shall be executed,
authenticated and delivered by the Trustee to or upon the order of the
Depositor. The Certificates shall be executed and attested by manual or
facsimile signature on behalf of the Trustee by an authorized signatory.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. 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 herein executed by the Trustee by manual signature, and
such certificate of authentication 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.

                  (b) The Senior Certificates, the Class B-1 Certificates, the
Class B-2 Certificates and the Class B-3 Certificates shall initially be issued
as one or more Certificates held by the Book- Entry Custodian or, if appointed
to hold such Certificates as provided below, the Depository and registered in
the name of the Depository or its nominee and, except as provided below,
registration of such Certificates may not be transferred by the Trustee except
to another Depository that agrees to hold such Certificates for the respective
Certificate Owners with Ownership Interests therein. The Certificate Owners
shall hold their respective Ownership Interests in and to such Certificates
through the book-entry facilities of the Depository and, except as provided
below, shall not be entitled to definitive, fully registered Certificates
("Definitive Certificates") in respect of such Ownership Interests. All
transfers by Certificate Owners of their respective Ownership Interests in the
Book- Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall only transfer the Ownership
Interests in the Book-Entry Certificates of Certificate Owners it represents or
of brokerage firms for which it acts as agent in accordance with the
Depository's normal procedures. The Trustee is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and if it is no

                                      -94-

<PAGE>

longer qualified to act as such, the Book-Entry Custodian shall, appoint, by a
written instrument delivered to the Depositor, the Master Servicer, the Trustee
(if the Trustee is not the Book-Entry Custodian) and any other transfer agent
(including the Depository or any successor Depository) to act as Book-Entry
Custodian under such conditions as the predecessor Book-Entry Custodian and the
Depository or any successor Depository may prescribe, provided that the
predecessor Book-Entry Custodian shall not be relieved of any of its duties or
responsibilities by reason of any such appointment of other than the Depository.
If the Trustee resigns or is removed in accordance with the terms hereof, the
successor trustee or, if it so elects, the Depository shall immediately succeed
to its predecessor's duties as Book-Entry Custodian. The Depositor shall have
the right to inspect, and to obtain copies of, any Certificates held as
Book-Entry Certificates by the Book-Entry Custodian.

                  The Trustee, the Master Servicer and the Depositor may for all
purposes (including the making of payments due on the Book-Entry Certificates)
deal with the Depository as the authorized representative of the Certificate
Owners with respect to the Book-Entry Certificates for the purposes of
exercising the rights of Certificateholders hereunder. The rights of Certificate
Owners with respect to the Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of the Book-Entry Certificates with respect to any particular matter
shall not be deemed inconsistent if they are made with respect to different
Certificate Owners. The Trustee may establish a reasonable record date in
connection with solicitations of consents from or voting by Certificateholders
and shall give notice to the Depository of such record date.

                  If (i)(A) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the Depository
or (iii) after the occurrence of a Master Servicer Event of Default, Certificate
Owners representing in the aggregate not less than 51% of the Ownership
Interests of the Book-Entry Certificates advise the Trustee through the
Depository, in writing, that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Certificate Owners, the
Trustee shall notify all Certificate Owners, through the Depository, 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 Book-Entry Custodian or the Depository, as
applicable, accompanied by registration instructions from the Depository for
registration of transfer, the Trustee shall issue the Definitive Certificates.
Such Definitive Certificates will be issued in minimum denominations of
$100,000, except that any beneficial ownership that was represented by a
Book-Entry Certificate in an amount less than $100,000 immediately prior to the
issuance of a Definitive Certificate shall be issued in a minimum denomination
equal to the amount represented by such Book-Entry Certificate. None of the
Depositor, the Master Servicer nor the Trustee shall be liable for any delay in
the 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 Depository 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.

                                      -95-

<PAGE>

                  SECTION 5.02. Registration of Transfer and Exchange of
                                Certificates.

                  (a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance with the provisions of
Section 8.12 a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided.

                  (b) No transfer of any Class B-4 Certificate, Class B-5
Certificate or Class B-6 Certificates (the "Private Certificates") shall be made
unless that transfer is made pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of a Private Certificate is to be made without
registration or qualification (other than in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor), the Trustee shall require, receipt of: (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Certificateholder desiring to effect the transfer and
from such Certificateholder's prospective transferee, substantially in the forms
attached hereto as Exhibit F-1; and (ii) in all other cases, an Opinion of
Counsel satisfactory to it that such transfer may be made without such
registration or qualification (which Opinion of Counsel shall not be an expense
of the Depositor, the Trustee, the Master Servicer, in its capacity as such, or
the Trust Fund), together with copies of the written certification(s) of the
Certificateholder desiring to effect the transfer and/or such
Certificateholder's prospective transferee upon which such Opinion of Counsel is
based, if any. Neither the Depositor or the Trustee is obligated to register or
qualify the Private Certificates under the 1933 Act or any other securities laws
or to take any action not otherwise required under this Agreement to permit the
transfer of such Certificates without registration or qualification. Any
Certificateholder desiring to effect the transfer of a Private Certificate
shall, and does hereby agree to, indemnify the Trustee, the Depositor and the
Master Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.

                  (c) No transfer of a Private Certificate or Residual
Certificate or any interest therein shall be made to any Plan subject to ERISA
or Section 4975 of the Code, any Person acting, directly or indirectly, on
behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the DOL Regulations ("Plan Assets"), as
certified by such transferee in the form of Exhibit G, unless the Trustee is
provided with an Opinion of Counsel on which the Trustee, the Depositor and the
Master Servicer may rely which establishes to the satisfaction of the Trustee,
that the purchase of such Certificates is permissible under applicable law, will
not constitute or result in any prohibited transaction under ERISA or Section
4975 of the Code and will not subject the Depositor, the Master Servicer, the
Trustee or the Trust Fund to any obligation or liability (including obligations
or liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Depositor, the Master Servicer, the Trustee or the Trust Fund. An Opinion
of Counsel, any certification or a deemed representation will not be required in
connection with the initial transfer of any such Certificate by the Depositor
(in which case, the Depositor shall have deemed to have represented that such
affiliate is not a Plan or a Person investing Plan Assets) and the Trustee shall

                                      -96-

<PAGE>

be entitled to conclusively rely upon a representation (which, upon the request
of the Trustee, shall be a written representation) from the Depositor of the
status of such transferee as an affiliate of the Depositor. Unless such an
Opinion of Counsel is provided, each Person acquiring a Private Certificate or
any interest therein with Plan Assets shall be deemed to have represented, and
shall be required to provide an Officers' Certificate, that either (i) it is not
a Plan or investing with "Plan Assets," (ii) (1) it is an insurance company, (2)
the source of funds used to acquire or hold the certificate or interest therein
is an "insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (3) the conditions in Sections I
and III of PTCE 95-60 have been satisfied.

                  Each beneficial owner of a Class B-1 Certificate, Class B-2
Certificate or Class B-3 Certificate or any interest therein shall be deemed to
have represented, by virtue of its acquisition or holding of that certificate or
interest therein, that either (i) it is not a Plan or investing with "Plan
Assets," (ii) it has acquired and is holding such certificate in reliance on
PTCE 2002-41, as amended from time to time ("Exemption"), and that it
understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by S&P, Moody's or Fitch
Ratings and the certificate is so rated or (iii) (1) it is an insurance company,
(2) the source of funds used to acquire or hold the certificate or interest
therein is an "insurance company general account," as such term is defined in
PTCE 95-60, and (3) the conditions in Sections I and III of PTCE 95-60 have been
satisfied.

                  If any Certificate or any interest therein is acquired or held
in violation of the provisions of the preceding two paragraphs, the next
preceding permitted beneficial owner will be treated as the beneficial owner of
that Certificate retroactive to the date of transfer to the purported beneficial
owner. Any purported beneficial owner whose acquisition or holding of any such
Certificate or interest therein was effected in violation of the provisions of
the preceding two paragraphs shall indemnify and hold harmless the Depositor,
the Master Servicer, the Trustee and the Trust Fund from and against any and all
liabilities, claims, costs or expenses incurred by those parties as a result of
that acquisition or holding.

                  (d) (i) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Trustee or its
designee under clause (iii)(A) below to deliver payments to a Person other than
such Person and to negotiate the terms of any mandatory sale under clause
(iii)(B) below and to execute all instruments of Transfer and to do all other
things necessary in connection with any such sale. The rights of each Person
acquiring any Ownership Interest in a Residual Certificate are expressly subject
to the following provisions:

                           (A) Each Person holding or acquiring any Ownership
                  Interest in a Residual Certificate shall be a Permitted
                  Transferee and shall promptly notify the Trustee of any change
                  or impending change in its status as a Permitted Transferee.

                           (B) In connection with any proposed Transfer of any
                  Ownership Interest in a Residual Certificate, the Trustee
                  shall require delivery to it and shall not register the
                  Transfer of any Residual Certificate until its receipt of an
                  affidavit and agreement

                                      -97-

<PAGE>

                  (a "Transfer Affidavit and Agreement"), in the form attached
                  hereto as Exhibit F-2, from the proposed Transferee, in form
                  and substance satisfactory to the Trustee, representing and
                  warranting, among other things, that such Transferee is a
                  Permitted Transferee, that it is not acquiring its Ownership
                  Interest in the Residual Certificate that is the subject of
                  the proposed Transfer as a nominee, trustee or agent for any
                  Person that is not a Permitted Transferee, that for so long as
                  it retains its Ownership Interest in a Residual Certificate,
                  it will endeavor to remain a Permitted Transferee, and that it
                  has reviewed the provisions of this Section 5.02(d) and agrees
                  to be bound by them.

                           (C) Notwithstanding the delivery of a Transfer
                  Affidavit and Agreement by a proposed Transferee under clause
                  (B) above, if a Responsible Officer of the Trustee who is
                  assigned to this transaction has actual knowledge that the
                  proposed Transferee is not a Permitted Transferee, no Transfer
                  of an Ownership Interest in a Residual Certificate to such
                  proposed Transferee shall be effected.

                           (D) Each Person holding or acquiring any Ownership
                  Interest in a Residual Certificate shall agree (x) to require
                  a Transfer Affidavit and Agreement from any other Person to
                  whom such Person attempts to transfer its Ownership Interest
                  in a Residual Certificate and (y) not to transfer its
                  Ownership Interest unless it provides a transferor affidavit
                  (a "Transferor Affidavit"), in the form attached hereto as
                  Exhibit F-2, to the Trustee stating that, among other things,
                  it has no actual knowledge that such other Person is not a
                  Permitted Transferee.

                           (E) Each Person holding or acquiring an Ownership
                  Interest in a Residual Certificate, by purchasing an Ownership
                  Interest in such Certificate, agrees to give the Trustee
                  written notice that it is a "pass-through interest holder"
                  within the meaning of temporary Treasury regulation Section
                  1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership
                  Interest in a Residual Certificate, if it is, or is holding an
                  Ownership Interest in a Residual Certificate on behalf of, a
                  "pass-through interest holder."

                  (ii) The Trustee will register the Transfer of any Residual
         Certificate only if it shall have received the Transfer Affidavit and
         Agreement and all of such other documents as shall have been reasonably
         required by the Trustee as a condition to such registration. In
         addition, no Transfer of a Residual Certificate shall be made unless
         the Trustee shall have received a representation letter from the
         Transferee of such Certificate to the effect that such Transferee is a
         Permitted Transferee.

                  (iii) (A) If any purported Transferee shall become a Holder of
         a Residual Certificate in violation of the provisions of this Section
         5.02(d), then the last preceding Permitted Transferee shall be
         restored, to the extent permitted by law, to all rights as holder
         thereof retroactive to the date of registration of such 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 5.02(d) or for making any

                                      -98-

<PAGE>

         payments due on such Certificate to the holder thereof or for taking
         any other action with respect to such holder under the provisions of
         this Agreement.

                  (B) If any purported Transferee shall become a holder of a
Residual Certificate in violation of the restrictions in this Section 5.02(d)
and to the extent that the retroactive restoration of the rights of the holder
of such Residual Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Trustee shall have the right,
without notice to the holder or any prior holder of such Residual Certificate,
to sell such Residual Certificate to a purchaser selected by the Trustee on such
terms as the Trustee may choose. Such purported Transferee shall promptly
endorse and deliver each Residual Certificate in accordance with the
instructions of the Trustee. Such purchaser may be the Trustee itself or any
Affiliate of the Trustee. The proceeds of such sale, net of the commissions
(which may include commissions payable to the Trustee or its Affiliates),
expenses and taxes due, if any, will be remitted by the Trustee to such
purported Transferee. The terms and conditions of any sale under this clause
(iii)(B) shall be determined in the sole discretion of the Trustee, and the
Trustee shall not be liable to any Person having an Ownership Interest in a
Residual Certificate as a result of its exercise of such discretion.

                  (iv) The Trustee shall make available to the Internal Revenue
         Service and those Persons specified by the REMIC Provisions all
         information necessary to compute any tax imposed (A) as a result of the
         Transfer of an Ownership Interest in a Residual Certificate to any
         Person who is a Disqualified Organization, including the information
         described in Treasury regulations sections 1.860D-1(b)(5) and
         1.860E-2(a)(5) with respect to the "excess inclusions" of such Residual
         Certificate and (B) as a result of any regulated investment company,
         real estate investment trust, common trust fund, partnership, trust,
         estate or organization described in Section 1381 of the Code that holds
         an Ownership Interest in a Residual Certificate having as among its
         record holders at any time any Person which is a Disqualified
         Organization. Reasonable compensation for providing such information
         may be accepted by the Trustee.

                  (v) The provisions of this Section 5.02(d) set forth prior to
         this subsection (v) may be modified, added to or eliminated, provided
         that there shall have been delivered to the Trustee at the expense of
         the party seeking to modify, add to or eliminate any such provision the
         following:

                  (A) written notification from the Rating Agency to the effect
         that the modification, addition to or elimination of such provisions
         will not cause the Rating Agency to downgrade its then-current ratings
         of any Class of Certificates; and

                  (A) an Opinion of Counsel, in form and substance satisfactory
         to the Trustee, to the effect that such modification of, addition to or
         elimination of such provisions will not cause any Trust REMIC to cease
         to qualify as a REMIC and will not cause (x) any Trust REMIC to be
         subject to an entity-level tax caused by the Transfer of any Residual
         Certificate to a Person that is not a Permitted Transferee or (y) a
         Person other than the prospective transferee to be subject to a
         REMIC-tax caused by the Transfer of a Residual Certificate to a Person
         that is not a Permitted Transferee.

                                      -99-

<PAGE>

                  (e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 8.12, the Trustee shall
execute, authenticate and deliver, in the name of the designated Transferee or
Transferees, one or more new Certificates of the same Class of a like aggregate
Percentage Interest.

                  (f) At the option of the Holder thereof, any Certificate may
be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency of the Trustee maintained
for such purpose pursuant to Section 8.12. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute, authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for transfer or exchange
shall (if so required by the Trustee) be duly endorsed by, or be accompanied by
a written instrument of transfer in the form satisfactory to the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing.

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

                  (h) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Trustee in accordance with its customary
procedures.

                  SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
                                Certificates.

                  If (i) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receive evidence to its satisfaction of the destruction,
loss or theft of any Certificate, and (ii) there is delivered to the Trustee
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of actual knowledge by the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of the same Class and
of like denomination and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership in
the applicable REMIC created hereunder, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.

                  SECTION 5.04. Persons Deemed Owners.

                  The Depositor, the Master Servicer, the Trustee and any agent
of any of them may treat the Person in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.01 and for all other purposes whatsoever,

                                      -100-

<PAGE>

and none of the Depositor, the Master Servicer, the Trustee or any agent of any
of them shall be affected by notice to the contrary.

                  SECTION 5.05. Certain Available Information.

                  On or prior to the date of the first sale of any Private
Certificate to an Independent third party, the Depositor shall provide to the
Trustee ten copies of any private placement memorandum or other disclosure
document used by the Depositor in connection with the offer and sale of the
Private Certificates. In addition, if any such private placement memorandum or
disclosure document is revised, amended or supplemented at any time following
the delivery thereof to the Trustee, the Depositor promptly shall inform the
Trustee of such event and shall deliver to the Trustee ten copies of the private
placement memorandum or disclosure document, as revised, amended or
supplemented. The Trustee shall maintain at its Corporate Trust Office and shall
make available free of charge during normal business hours for review by any
Holder of a Certificate or any Person identified to the Trustee as a prospective
transferee of a Certificate, originals or copies of the following items: (i) in
the case of a Holder or prospective transferee of a Private Certificate, the
private placement memorandum or other disclosure document relating to such
Certificates in the form most recently provided to the Trustee; and (ii) in all
cases, (A) this Agreement and any amendments hereof entered into pursuant to
Section 11.01, (B) all monthly statements required to be delivered to
Certificateholders of the relevant Class pursuant to Section 4.02 since the
Closing Date, and all other notices, reports, statements and written
communications delivered to the Certificateholders of the relevant Class
pursuant to this Agreement since the Closing Date, (C) all certifications
delivered by a Responsible Officer of the Trustee since the Closing Date
pursuant to Section 10.01(h), (D) any and all Officers' Certificates delivered
to the Trustee by the Master Servicer since the Closing Date to evidence the
Master Servicer's determination that any P&I Advance was, or if made, would be a
Nonrecoverable P&I Advance and (E) any and all Officers' Certificates delivered
to the Trustee by the Master Servicer since the Closing Date pursuant to Section
4.04(a). Copies and mailing of any and all of the foregoing items will be
available from the Trustee upon request at the expense of the person requesting
the same.

                                      -101-

<PAGE>

                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

                  SECTION 6.01. Liability of the Depositor and the Master
                                Servicer.

                  The Depositor and the Master Servicer each shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
by this Agreement and undertaken hereunder by the Depositor and the Master
Servicer herein.

                  SECTION 6.02. Merger or Consolidation of the Depositor or the
                                Master Servicer.

                  Subject to the following paragraph, the Depositor will keep in
full effect its existence, rights and franchises as a corporation under the laws
of the jurisdiction of its incorporation. Subject to the following paragraph,
the Master Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and its qualification as an approved conventional seller/servicer
for Fannie Mae or Freddie Mac in good standing. The Depositor and the Master
Servicer each will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its respective duties
under this Agreement.

                  The Depositor or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; PROVIDED, HOWEVER, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
Fannie Mae or Freddie Mac; and provided further that the Rating Agency's ratings
of the Class A Certificates in effect immediately prior to such merger or
consolidation will not be qualified, reduced or withdrawn as a result thereof
(as evidenced by a letter to such effect from the Rating Agency).

                  SECTION 6.03. Limitation on Liability of the Depositor, the
                                Master Servicer and Others.

                  None of the Depositor, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor or the Master Servicer
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; PROVIDED, HOWEVER, that
this provision shall not protect the Depositor, the Master Servicer or any such
person against any breach of warranties, representations or covenants made
herein, or against any specific liability imposed on the Master Servicer
pursuant hereto, or against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or negligence in the performance of
duties or by reason of reckless

                                      -102-

<PAGE>

disregard of obligations and duties hereunder. The Depositor, the Master
Servicer and any director, officer, employee or agent of the Depositor or the
Master Servicer may rely in good faith on any document of any kind which, prima
facie, is properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor or the Master Servicer shall be indemnified
and held harmless by the Trust Fund against any loss, liability or expense
incurred in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense to any specific Mortgage
Loan or Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) or any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
unless such action is related to its respective duties under this Agreement and,
in its opinion, does not involve it in any expense or liability; PROVIDED,
HOWEVER, that each of the Depositor and the Master Servicer may in its
discretion undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties hereto
and the interests of the Certificateholders hereunder. In such event, unless the
Depositor or the Master Servicer acts without the consent of Holders of
Certificates entitled to at least 51% of the Voting Rights (which consent shall
not be necessary in the case of litigation or other legal action by either to
enforce their respective rights or defend themselves hereunder), the legal
expenses and costs of such action and any liability resulting therefrom (except
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder) shall be expenses, costs
and liabilities of the Trust Fund, and the Depositor (subject to the limitations
set forth above) and the Master Servicer shall be entitled to be reimbursed
therefor from the Collection Account as and to the extent provided in Section
3.11, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Collection Account.

                  SECTION 6.04. Limitation on Resignation of the Master
                                Servicer.

                  The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that its duties
hereunder are no longer permissible under applicable law or (ii) with the
written consent of the Trustee, which consent may not be unreasonably withheld,
with written confirmation from the Rating Agency (which confirmation shall be
furnished to the Depositor and the Trustee) that such resignation will not cause
the Rating Agency to reduce the then current rating of the Senior Certificates,
the Class B-1 Certificates, the Class B-2 Certificates or the Class B-3
Certificates and provided that a qualified successor has agreed to assume the
duties and obligations of the Master Servicer hereunder. Any such determination
pursuant to clause (i) of the preceding sentence permitting the resignation of
the Master Servicer shall be evidenced by an Opinion of Counsel to such effect
obtained at the expense of the Master Servicer and delivered to the Trustee. No
resignation of the Master Servicer shall become effective until the Trustee or a
successor servicer shall have assumed the Master Servicer's responsibilities,
duties, liabilities (other than those liabilities arising prior to the
appointment of such successor) and obligations under this Agreement.

                                      -103-

<PAGE>

                  Except as expressly provided herein, the Master Servicer shall
not assign nor transfer any of its rights, benefits or privileges hereunder to
any other Person, nor delegate to or subcontract with, nor authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder. If, pursuant to any provision
hereof, the duties of the Master Servicer are transferred to a successor master
servicer, the entire amount of the Servicing Fee and other compensation payable
to the Master Servicer pursuant hereto shall thereafter be payable to such
successor master servicer.

                  SECTION 6.05. Rights of the Depositor in Respect of the Master
                                Servicer.

                  The Master Servicer shall afford (and any Sub-Servicing
Agreement shall provide that each Sub-Servicer shall afford) the Depositor and
the Trustee, upon reasonable notice, during normal business hours, access to all
records maintained by the Master Servicer (and any such Sub-Servicer) in respect
of the Master Servicer's rights and obligations hereunder and access to officers
of the Master Servicer (and those of any such Sub-Servicer) responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Depositor
and the Trustee its (and any such Sub-Servicer's) most recent financial
statements of the parent company of the Master Servicer and such other
information relating to the Master Servicer's capacity to perform its
obligations under this Agreement that it possesses. To the extent such
information is not otherwise available to the public, the Depositor and the
Trustee shall not disseminate any information obtained pursuant to the preceding
two sentences without the Master Servicer's written consent, except as required
pursuant to this Agreement or to the extent that it is appropriate to do so (i)
in working with legal counsel, auditors, taxing authorities or other
governmental agencies, rating agencies or reinsurers or (ii) pursuant to any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Depositor, the Trustee or
the Trust Fund, and in either case, the Depositor or the Trustee, as the case
may be, shall use its best efforts to assure the confidentiality of any such
disseminated non-public information. The Depositor may, but is not obligated to,
enforce the obligations of the Master Servicer under this Agreement and may, but
is not obligated to, perform, or cause a designee to perform, any defaulted
obligation of the Master Servicer under this Agreement or exercise the rights of
the Master Servicer under this Agreement; provided that the Master Servicer
shall not be relieved of any of its obligations under this Agreement by virtue
of such performance by the Depositor or its designee. The Depositor shall not
have any responsibility or liability for any action or failure to act by the
Master Servicer and is not obligated to supervise the performance of the Master
Servicer under this Agreement or otherwise.

                                      -104-

<PAGE>

                                   ARTICLE VII

                                     DEFAULT

                  SECTION 7.01. Master Servicer Events of Default.

                  "Master Servicer Event of Default," wherever used herein,
means any one of the following events:

                  (i) any failure by the Master Servicer to remit to the Trustee
         for distribution to the Certificateholders any payment (other than a
         P&I Advance required to be made from its own funds on any Master
         Servicer Remittance Date pursuant to Section 4.03) required to be made
         under the terms of the Certificates and this Agreement which continues
         unremedied for a period of one Business Day after the date upon which
         written notice of such failure, requiring the same to be remedied,
         shall have been given to the Master Servicer by the Depositor or the
         Trustee (in which case notice shall be provided by telecopy), or to the
         Master Servicer, the Depositor and the Trustee by the Holders of
         Certificates entitled to at least 25% of the Voting Rights; or

                  (ii) any failure on the part of the Master Servicer duly to
         observe or perform in any material respect any of the covenants or
         agreements on the part of the Master Servicer contained in the
         Certificates or in this Agreement which continues unremedied for a
         period of 30 days after the earlier of (i) the date on which written
         notice of such failure, requiring the same to be remedied, shall have
         been given to the Master Servicer by the Depositor or the Trustee, or
         to the Master Servicer, the Depositor and the Trustee by the Holders of
         Certificates entitled to at least 25% of the Voting Rights and (ii)
         actual knowledge of such failure by a Servicing Officer of the Master
         Servicer; or

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction in the premises in an involuntary case
         under any present or future federal or state bankruptcy, insolvency or
         similar law or the appointment of a conservator or receiver or
         liquidator in any insolvency, readjustment of debt, marshalling of
         assets and liabilities or similar proceeding, or for the winding-up or
         liquidation of its affairs, shall have been entered against the Master
         Servicer and if such proceeding is being contested by the Master
         Servicer in good faith such decree or order shall have remained in
         force undischarged or unstayed for a period of 60 consecutive days or
         results in the entry of an order for relief or any such adjudication or
         appointment; or

                  (iv) the Master Servicer shall consent to the appointment of a
         conservator or receiver or liquidator in any insolvency, readjustment
         of debt, marshalling of assets and liabilities or similar proceedings
         of or relating to the Master Servicer or of or relating to all or
         substantially all of its property; or

                  (v) the Master Servicer shall admit in writing its inability
         to pay its debts generally as they become due, file a petition to take
         advantage of any applicable insolvency

                                      -105-

<PAGE>

         or reorganization statute, make an assignment for the benefit of its
         creditors, or voluntarily suspend payment of its obligations; or

                  (vi) any failure of the Master Servicer to make any P&I
         Advance on any Master Servicer Remittance Date required to be made from
         its own funds pursuant to Section 4.03 which continues unremedied for a
         period of one Business Day after the date upon which written notice of
         such failure (which notice the Trustee must provide by 3:00 p.m. New
         York time on the Business Day following the Master Servicer Remittance
         Date), requiring the same to be remedied, shall have been given to the
         Master Servicer by the Trustee.

                  If a Master Servicer Event of Default described in clauses (i)
through (v) of this Section shall occur, then, and in each and every such case,
so long as such Master Servicer Event of Default shall not have been remedied,
the Depositor or the Trustee may, and at the written direction of the Holders of
Certificates entitled to at least 51% of Voting Rights, the Trustee shall, by
notice in writing to the Master Servicer (and to the Depositor if given by the
Trustee or to the Trustee if given by the Depositor), terminate all of the
rights and obligations of the Master Servicer in its capacity as a Master
Servicer under this Agreement, to the extent permitted by law, and in and to the
Mortgage Loans and the proceeds thereof. If a Master Servicer Event of Default
described in clause (vi) hereof shall occur, the Trustee shall, by notice in
writing to the Master Servicer and the Depositor, terminate all of the rights
and obligations of the Master Servicer in its capacity as Master Servicer under
this Agreement and in and to the Mortgage Loans and the proceeds thereof. On or
after the receipt by the Master Servicer of such written notice, all authority
and power of the Master Servicer under this Agreement, whether with respect to
the Certificates (other than as a Holder of any Certificate) or the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee pursuant to and
under this Section and, without limitation, the Trustee is hereby authorized and
empowered, as attorney-in-fact or otherwise, to execute and deliver on behalf of
and at the expense of the Master Servicer, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees, at its sole cost
and expense, promptly (and in any event no later than ten Business Days
subsequent to such notice) to provide the Trustee with all documents and records
requested by it to enable it to assume the Master Servicer's functions under
this Agreement, and to cooperate with the Trustee in effecting the termination
of the Master Servicer's responsibilities and rights under this Agreement,
including, without limitation, the transfer within one Business Day to the
Trustee for administration by it of all cash amounts which at the time shall be
or should have been credited by the Master Servicer to the Collection Account
held by or on behalf of the Master Servicer, the Distribution Account or any REO
Account or Servicing Account held by or on behalf of the Master Servicer or
thereafter be received with respect to the Mortgage Loans or any REO Property
serviced by the Master Servicer (PROVIDED, HOWEVER, that the Master Servicer
shall continue to be entitled to receive all amounts accrued or owing to it
under this Agreement on or prior to the date of such termination, whether in
respect of P&I Advances or otherwise, and shall continue to be entitled to the
benefits of Section 6.03, notwithstanding any such termination, with respect to
events occurring prior to such termination). For purposes of this Section 7.01,
the Trustee shall not be deemed to have knowledge of a Master ServicerEvent of
Default unless a Responsible Officer of the Trustee assigned to and working in
the Trustee's Corporate Trust Office has actual knowledge thereof or unless
written notice of any event which is in fact such a Master

                                      -106-

<PAGE>

Servicer Event of Default is received by the Trustee and such notice references
the Certificates, the Trust Fund or this Agreement.

                  The Trustee shall be entitled to be reimbursed by the Master
Servicer (or by the Trust Fund if the Master Servicer is unable to fulfill its
obligations hereunder) for all costs associated with the transfer of servicing
from the predecessor master servicer, including without limitation, any costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or 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.

                  SECTION 7.02. Trustee to Act; Appointment of Successor.

                  On and after the time the Master Servicer receives a notice of
termination, the Trustee shall be the successor in all respects to the Master
Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03(c) and its obligation to deposit amounts
in respect of losses pursuant to Section 3.12) by the terms and provisions
hereof including, without limitation, the Master Servicer's obligations to make
P&I Advances pursuant to Section 4.03; PROVIDED, HOWEVER, that if the Trustee is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated to
make P&I Advances pursuant to Section 4.03; and provided further, that any
failure to perform such duties or responsibilities caused by the Master
Servicer's failure to provide information required by Section 7.01 shall not be
considered a default by the Trustee as successor to the Master Servicer
hereunder; PROVIDED, HOWEVER, it is understood and acknowledged by the parties
that there will be a period of transition (not to exceed 90 days) before the
servicing transfer is fully effected. As compensation therefor, the Trustee
shall be entitled to the Servicing Fees and all funds relating to the Mortgage
Loans to which the Master Servicer would have been entitled if it had continued
to act hereunder (other than amounts which were due or would become due to the
Master Servicer prior to its termination or resignation). Notwithstanding the
above and subject to the next paragraph, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if it is prohibited
by law from making advances regarding delinquent mortgage loans, or if the
Holders of Certificates entitled to at least 51% of the Voting Rights so request
in writing to the Trustee, promptly appoint or petition a court of competent
jurisdiction to appoint, an established mortgage loan servicing institution
acceptable to the Rating Agency and having a net worth of not less than
$15,000,000 as the successor to the Master Servicer under this Agreement in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer under this Agreement. No appointment of a successor to the
Master Servicer under this Agreement shall be effective until the assumption by
the successor of all of the Master Servicer's responsibilities, duties and
liabilities hereunder. In connection with such appointment and assumption
described herein, 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 the Master Servicer as such hereunder. The Depositor, the Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such

                                      -107-

<PAGE>

succession. Pending appointment of a successor to the Master Servicer under this
Agreement, the Trustee shall act in such capacity as hereinabove provided.

                  Upon removal or resignation of the Master Servicer, the
Trustee, with the cooperation of the Depositor, (x) shall solicit bids for a
successor Master Servicer as described below and (y) pending the appointment of
a successor Master Servicer as a result of soliciting such bids, shall serve as
Master Servicer of the Mortgage Loans serviced by such predecessor Master
Servicer. The Trustee shall solicit, by public announcement, bids from housing
and home finance institutions, banks and mortgage servicing institutions meeting
the qualifications set forth above (including the Trustee or any affiliate
thereof). Such public announcement shall specify that the successor Master
Servicer shall be entitled to the servicing compensation agreed upon between the
Trustee, the successor Master Servicer and the Depositor; PROVIDED, HOWEVER,
that no such fee shall exceed the related Servicing Fee. Within thirty days
after any such public announcement, the Trustee, with the cooperation of the
Depositor, shall negotiate in good faith and effect the sale, transfer and
assignment of the servicing rights and responsibilities hereunder to the
qualified party submitting the highest satisfactory bid as to the price they
will pay to obtain such servicing. The Trustee upon receipt of the purchase
price shall pay such purchase price to the Master Servicer being so removed,
after deducting from any sum received by the Trustee from the successor to the
Master Servicer in respect of such sale, transfer and assignment all costs and
expenses of any public announcement and of any sale, transfer and assignment of
the servicing rights and responsibilities reasonably incurred hereunder. After
such deductions, the remainder of such sum shall be paid by the Trustee to the
Master Servicer at the time of such sale.

                  SECTION 7.03. Notification to Certificateholders.

                  (a) Upon any termination of the Master Servicer pursuant to
Section 7.01 above or any appointment of a successor to the Master Servicer
pursuant to Section 7.02 above, the Trustee shall give prompt written notice
thereof to Certificateholders at their respective addresses appearing in the
Certificate Register.

                  (b) Not later than the later of 60 days after the occurrence
of any event, which constitutes or which, with notice or lapse of time or both,
would constitute a Master Servicer Event of Default or five days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Holders of Certificates notice
of each such occurrence, unless such default or Master Servicer Event of Default
shall have been cured or waived.

                  SECTION 7.04. Waiver of Master Servicer Events of Default.

                  Subject to Section 11.09(d), the Holders representing at least
66% of the Voting Rights evidenced by all Classes of Certificates affected by
any default or Master Servicer Event of Default hereunder may waive such default
or Master Servicer Event of Default; PROVIDED, HOWEVER, that a default or Master
Servicer Event of Default under clause (i) or (vi) of Section 7.01 may be waived
only by all of the Holders of the Regular Certificates. Upon any such waiver of
a default or Master Servicer Event of Default, such default or Master Servicer
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall

                                      -108-

<PAGE>

extend to any subsequent or other default or Master Servicer Event of Default or
impair any right consequent thereon except to the extent expressly so waived.

                                      -109-

<PAGE>

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

                  SECTION 8.01. Duties of Trustee.

                  The Trustee, prior to the occurrence of a Master Servicer
Event of Default and after the curing of all Master Servicer Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. During a Master Servicer Event
of Default, 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. Any permissive right of the Trustee
enumerated in this Agreement shall not be construed as a duty.

                  The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to it, which are specifically required to be furnished pursuant to any provision
of this Agreement, shall examine them to determine whether they conform to the
requirements of this Agreement. If any such instrument is found not to conform
to the requirements of this Agreement in a material manner, it shall take such
action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to its satisfaction, it will provide notice thereof
to the Certificateholders.

                  No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct; PROVIDED, HOWEVER, that:

                  (i) Prior to the occurrence of a Master Servicer Event of
         Default, and after the curing of all such Master Servicer Events of
         Default which may have occurred, the duties and obligations of the
         Trustee shall be determined solely by the express provisions of this
         Agreement, the Trustee shall not be liable except for the performance
         of such duties and obligations as are specifically set forth in this
         Agreement, no implied covenants or obligations shall be read into this
         Agreement against the Trustee and, in the absence of bad faith on the
         part of the Trustee, the Trustee may conclusively rely, as to the truth
         of the statements and the correctness of the opinions expressed
         therein, upon any certificates or opinions furnished to the Trustee
         that conform to the requirements of this Agreement;

                  (ii) The Trustee shall not be personally liable for any error
         of judgment made in good faith by a Responsible Officer or Responsible
         Officers unless it shall be proved that it was negligent in
         ascertaining the pertinent facts;

                  (iii) The Trustee shall not be personally liable with respect
         to any action taken, suffered or omitted to be taken by it in good
         faith in accordance with the direction of the Holders of Certificates
         entitled to at least 25% of the Voting Rights relating to the time,
         method and place of conducting any proceeding for any remedy available
         to the it or exercising any trust or power conferred upon it, under
         this Agreement; and

                                      -110-

<PAGE>

                  (iv) The Trustee shall not be required to take notice or be
         deemed to have notice or knowledge of any default unless a Responsible
         Officer of the Trustee shall have received written notice thereof or a
         Responsible Officer of the Trustee shall have actual knowledge thereof.
         In the absence of receipt of such notice or actual knowledge, the
         Trustee may conclusively assume there is no default.

                  SECTION 8.02. Certain Matters Affecting the Trustee.

                  (a) Except as otherwise provided in Section 8.01:

                  (i) The Trustee and any director, officer, employee or agent
         of the Trustee may request and rely upon and shall be protected in
         acting or refraining from acting upon any resolution, Officers'
         Certificate, certificate of auditors or any other certificate,
         statement, instrument, opinion, report, notice, request, consent,
         order, appraisal, bond or other paper or document reasonably believed
         by it to be genuine and to have been signed or presented by the proper
         party or parties;

                  (ii) The Trustee may consult with counsel and any 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 Opinion of Counsel;

                  (iii) The Trustee shall not be under any 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 at the request, order or direction of any of the
         Certificateholders, pursuant to the provisions of this Agreement,
         unless such Certificateholders shall have offered to the Trustee
         reasonable security or indemnity against the costs, expenses and
         liabilities which may be incurred therein or thereby; nothing contained
         herein shall, however, relieve the Trustee of the obligation, upon the
         occurrence of a Master Servicer Event of Default (which has not been
         cured or waived), to exercise such of the rights and powers vested in
         it by this Agreement, and to use the same degree of care and skill in
         their exercise as a prudent person would exercise or use under the
         circumstances in the conduct of such person's own affairs;

                  (iv) The Trustee shall not be personally liable for any action
         taken, suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Agreement;

                  (v) Prior to the occurrence of a Master Servicer Event of
         Default hereunder and after the curing of all Master Servicer Events of
         Default which may have occurred, the Trustee shall not be bound to make
         any investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, approval, bond or other paper or document, unless
         requested in writing to do so by the Holders of Certificates entitled
         to at least 25% of the Voting Rights; 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 such Certificateholders, the Trustee may require

                                      -111-

<PAGE>

         reasonable indemnity against such cost, expense, or liability from such
         Certificateholders as a condition to taking any such action;

                  (vi) The Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys;

                  (vii) The Trustee shall not be personally liable for any loss
         resulting from the investment of funds held in the Collection Account
         at the direction of the Master Servicer pursuant to Section 3.12; and

                  (viii) Any request or direction of the Depositor, the Master
         Servicer or the Certificateholders mentioned herein shall be
         sufficiently evidenced in writing.

                  (b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.

                  SECTION 8.03. Trustee not Liable for Certificates or Mortgage
                                Loans.

                  The recitals contained herein and in the Certificates (other
than the signature of the Trustee, the authentication of the Trustee on the
Certificates, the acknowledgments of the Trustee contained in Article II and the
representations and warranties of the Trustee in Section 8.12) shall be taken as
the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement (other than as specifically set forth
in Section 8.12) or of the Certificates (other than the signature of the Trustee
and authentication of the Trustee on the Certificates) or of any Mortgage Loan
or related document. The Trustee shall not be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor or the Master Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Collection Account by the Master Servicer, other than
any funds held by or on behalf of the Trustee in accordance with Section 3.10.

                  SECTION 8.04. Trustee May Own Certificates.

                  The Trustee in its individual capacity or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not Trustee.

                  SECTION 8.05. Trustee's Fees and Expenses.

                  (a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee. The Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense (not
including expenses, disbursements and advances incurred or made by the Trustee,
including the compensation and the expenses and disbursements of its agents and
counsel,

                                      -112-

<PAGE>

in the ordinary course of the Trustee's performance in accordance with the
provisions of this Agreement) incurred by the Trustee in connection with any
claim or legal action or any pending or threatened claim or legal action arising
out of or in connection with the acceptance or administration of its obligations
and duties under this Agreement, other than any loss, liability or expense (i)
for which the Trustee is indemnified by the Master Servicer, (ii) that
constitutes a specific liability of the Trustee pursuant to Section 10.01(c) or
(iii) any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder or as a result of a
breach of the Trustee's obligations under Article X hereof. Any amounts payable
to the Trustee, or any director, officer, employee or agent of the Trustee in
respect of the indemnification provided by this paragraph (a), or pursuant to
any other right of reimbursement from the Trust Fund that the Trustee or any
director, officer, employee or agent of the Trustee may have hereunder in its
capacity as such, may be withdrawn by the Trustee from the Distribution Account
at any time.

                  (b) The Master Servicer agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense resulting from a
breach of the Master Servicer's obligations and duties under this Agreement.
Such indemnity shall survive the termination or discharge of this Agreement and
the resignation or removal of the Trustee. Any payment under this Section
8.05(b) made by the Master Servicer to the Trustee shall be from the Master
Servicer's own funds, without reimbursement from the Trust Fund therefor.

                  (c) The Depositor shall pay any annual rating agency fees of
the Rating Agencies for ongoing surveillance from its own funds without right of
reimbursement.

                  SECTION 8.06. Eligibility Requirements for Trustee.

                  The Trustee hereunder shall at all times be a corporation or
an association (other than the Depositor, the Seller, the Master Servicer or any
Affiliate of the foregoing) organized and doing business under the laws of any
state or the United States of America, and authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions 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 association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.

                  SECTION 8.07. Resignation and Removal of the Trustee.

                  The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Depositor, the
Master Servicer and the Certificateholders. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the resigning
Trustee and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders, the Trustee and the Master Servicer by the
Depositor. If no successor trustee shall have been so

                                      -113-

<PAGE>

appointed and 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.

                  If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed, and to the successor trustee. A copy of such instrument shall be
delivered to the Certificateholders, the Trustee and the Master Servicer by the
Depositor.

                  The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders and the Master Servicer by the
Depositor.

                  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

                  SECTION 8.08. Successor Trustee.

                  Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor and the Trustee, 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 the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements, as well as all
moneys, held by it hereunder and the Depositor and the predecessor trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.

                  No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by the Rating Agency, as evidenced by a letter from the Rating Agency.

                  Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of

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<PAGE>

Certificates at their addresses as shown in the Certificate Register. If the
Depositor fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.

                  SECTION 8.09. Merger or Consolidation of Trustee.

                  Any corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated or any corporation or
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or association succeeding to the
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation or association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.

                  Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of REMIC I or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as cotrustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of REMIC I, and to
vest in such Person or Persons, in such capacity, such title to REMIC I, or any
part thereof, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in case a Master Servicer Event of Default shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.

                  In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title to
REMIC I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment,

                                      -115-

<PAGE>

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.

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

                  SECTION 8.11. [intentionally omitted].

                  SECTION 8.12. Appointment of Office or Agency.

                  The Trustee will appoint an office or agency in the City of
Minneapolis, Minnesota where the Certificates may be surrendered for
registration of transfer or exchange, and presented for final distribution, and
where notices and demands to or upon the Trustee in respect of the Certificates
and this Agreement may be served.

                  SECTION 8.13. Representations and Warranties.

                  The Trustee hereby represents and warrants to the Master
Servicer and the Depositor, as of the Closing Date, that:

                  (i) It is duly organized, validly existing and in good
         standing under the laws of the United States.

                  (ii) The execution and delivery of this Agreement by it, and
         the performance and compliance with the terms of this Agreement by it,
         will not violate its articles of association or bylaws or constitute a
         default (or an event which, with notice or lapse of time, or both,
         would constitute a default) under, or result in the breach of, any
         material agreement or other instrument to which it is a party or which
         is applicable to it or any of its assets.

                  (iii) It has the full power and authority to enter into and
         consummate all transactions contemplated by this Agreement, has duly
         authorized the execution, delivery and performance of this Agreement,
         and has duly executed and delivered this Agreement.

                  (iv) This Agreement, assuming due authorization, execution and
         delivery by the other parties hereto, constitutes a valid, legal and
         binding obligation of it, enforceable against it in accordance with the
         terms hereof, subject to (A) applicable bankruptcy, insolvency,
         receivership, reorganization, moratorium and other laws affecting the
         enforcement of creditors' rights generally, and (B) general principles
         of equity, regardless of whether such enforcement is considered in a
         proceeding in equity or at law.

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<PAGE>

                  (v) It is not in violation of, and its execution and delivery
         of this Agreement and its performance and compliance with the terms of
         this Agreement will not constitute a violation of, any law, any order
         or decree of any court or arbiter, or any order, regulation or demand
         of any federal, state or local governmental or regulatory authority,
         which violation, in its good faith and reasonable judgment, is likely
         to affect materially and adversely either the ability of the it to
         perform its obligations under this Agreement or the financial condition
         of it.

                  (vi) No litigation is pending or, to the best of its
         knowledge, threatened against it which would prohibit it from entering
         into this Agreement or, in its good faith reasonable judgment, is
         likely to materially and adversely affect either the ability of it to
         perform its obligations under this Agreement or the financial condition
         of it.

                                      -117-

<PAGE>

                                   ARTICLE IX

                                   TERMINATION

                  SECTION 9.01. Termination Upon Repurchase or Liquidation of
                                the Trust Fund.

                  (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee with respect to the Mortgage Loans (other than the obligations of
the Master Servicer to the Trustee pursuant to Section 8.05 and of the Master
Servicer to provide for and the Trustee to make payments to the Holders of the
related Class(es) of Certificates as hereinafter set forth) shall terminate upon
payment to the Certificateholders and the deposit of all amounts held by or on
behalf of the Trustee and required hereunder to be so paid or deposited on the
Distribution Date coinciding with or following the earlier to occur of (i) the
purchase by the Master Servicer of all Mortgage Loans and related REO Property
remaining in REMIC I, (ii) the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan or REO Property
remaining in REMIC I; PROVIDED, HOWEVER, that in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of
the United States to the Court of St. James, living on the date hereof. The
purchase by the Master Servicer of all the Mortgage Loans and related REO
Property remaining in REMIC I shall be at a price (the "Termination Price")
equal to the greater of (A) the aggregate Purchase Price of all the Mortgage
Loans included in REMIC I, plus the appraised value of each REO Property, if
any, included in REMIC I, such appraisal to be conducted by an appraiser
mutually agreed upon by the Master Servicer and the Trustee in their reasonable
discretion and (B) the aggregate fair market value of all of the assets in REMIC
I (as determined by the Master Servicer, with the consent of the Trustee, as of
the close of business on the third Business Day next preceding the date upon
which notice of any such termination is furnished to Certificateholders pursuant
to the third paragraph of this Section 9.01).

                  (b) The Master Servicer shall have the right to purchase all
of the Mortgage Loans and each REO Property remaining in REMIC I pursuant to
clause (i) of the preceding paragraph no later than the Determination Date in
the month immediately preceding the Distribution Date on which the Certificates
will be retired; provided, however, that the Master Servicer, as provided above,
may elect to purchase all of the Mortgage Loans and each REO Property remaining
in REMIC I pursuant to clause (i) above only if the aggregate Stated Principal
Balance of the Mortgage Loans and each REO Property remaining in REMIC I at the
time of such election is reduced to less than 5% of the aggregate Stated
Principal Balance of the Mortgage Loans at the Cut-off Date. For federal income
tax purposes, the purchase by the Master Servicer of all Mortgage Loans and all
REO Properties underlying the Regular Interests in REMIC I is intended to
facilitate a redemption of such Regular Interests pursuant to a "cleanup call"
within the meaning of Treasury regulation section 1.860G-2(j). Notwithstanding
the foregoing, the Master Servicer shall have the right to transfer, sell or
assign its rights to purchase all of the Mortgage Loans and each REO Property
remaining in REMIC I.

                                      -118-

<PAGE>

                  (c) Notice of the liquidation of the Certificates shall be
given promptly by the Trustee by letter to Certificateholders mailed (a) in the
event such notice is given in connection with the purchase of the Mortgage Loans
and each REO Property remaining in REMIC I by the Master Servicer, not earlier
than the 15th day and not later than the 25th day of the month next preceding
the month of the final distribution on the Certificates or (b) otherwise during
the month of such final distribution on or before the Determination Date in such
month, in each case specifying (i) the Distribution Date upon which REMIC I will
terminate and final payment of the Certificates will be made upon presentation
and surrender of the Certificates at the office of the Trustee therein
designated, (ii) the amount of any such final payment, (iii) that no interest
shall accrue in respect of the Certificates from and after the Interest Accrual
Period relating to the final Distribution Date therefor and (iv) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Certificates at the
office of the Trustee. In the event such notice is given in connection with the
purchase of all of the Mortgage Loans and each REO Property remaining in REMIC I
by the Master Servicer, the Master Servicer shall deliver to the Trustee for
deposit in the Distribution Account not later than the related Master Servicer
Remittance Date of the month in which such distribution will be made an amount
in immediately available funds equal to the Termination Price. Upon
certification to the Trustee by a Servicing Officer of the making of such final
deposit, the Trustee shall promptly release or cause to be released to the
Master Servicer the Mortgage Files for the remaining Mortgage Loans in REMIC I,
and the Trustee shall execute all assignments, endorsements and other
instruments necessary to effectuate such transfer.

                  (d) Upon presentation of the Certificates by the
Certificateholders on the final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 in respect of the Certificates so presented and surrendered. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 9.01 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining related
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the trust funds.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trustee shall pay to Citigroup Global
Markets Inc. all such amounts, and all rights of non-tendering
Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Trustee as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section 9.01.

                  Immediately following the deposit of funds in trust hereunder
in respect of the Certificates, the Trust Fund shall terminate.

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<PAGE>

                  SECTION 9.02. Additional Termination Requirements.

                  (a) In the event that the Master Servicer purchases all the
Mortgage Loans and each REO Property, the Trust Fund shall be terminated in
accordance with the following additional requirements (or in connection with the
final payment on or other liquidation of the last Mortgage Loan or REO Property
remaining in REMIC I, the additional requirement specified in clause (i) below):

                  (i) The Trustee shall specify the first day in the 90-day
         liquidation period in a statement attached to each Trust REMIC's final
         Tax Return pursuant to Treasury regulation Section 1.860F-1, and such
         termination shall satisfy all requirements of a qualified liquidation
         under Section 860F of the Code and any regulations thereunder, as
         evidenced by an Opinion of Counsel obtained at the expense of the
         Master Servicer;

                  (ii) During such 90-day liquidation period, and at or prior to
         the time of making of the final payment on the Certificates, the
         Trustee shall sell all of the assets of REMIC I to the Master Servicer
         for cash; and

                  (iii) At the time of the making of the final payment on the
         Certificates, the Trustee shall distribute or credit, or cause to be
         distributed or credited, to the Holders of the Residual Certificates
         all cash on hand in REMIC I (other than cash retained to meet claims),
         and the Trust Fund shall terminate at that time.

                  (b) At the expense of the Master Servicer (or in the event of
termination under Section 9.01(a)(ii), at the expense of the Trustee), the
Trustee shall prepare or cause to be prepared the documentation required in
connection with the adoption of a plan of liquidation for each Trust REMIC
pursuant to this Section 9.02.

                  (c) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to specify the 90-day liquidation period
for REMIC I, which authorization shall be binding upon all successor
Certificateholders.

                                      -120-

<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

                  SECTION 10.01. REMIC Administration.

                  (a) The Trustee shall elect to treat each Trust REMIC as a
REMIC under the Code and, if necessary, under applicable state law. Such
election shall be made by the Trustee on Form 1066 or other appropriate federal
tax or information return or any appropriate state return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued. For the purposes of the REMIC election in respect of each Trust REMIC,
the REMIC I Regular Interests shall be designated as the Regular Interests in
REMIC I, the Class R-I Interest shall be designated as the Residual Interest in
REMIC I, the Regular Certificates shall be designated as the Regular Interests
in REMIC II and the Class R-II Interest shall be designated as the Residual
Interests in REMIC I. The Trustee shall not permit the creation of any
"interests" (within the meaning of Section 860G of the Code) in any Trust REMIC
other than the interests represented by the Certificates.

                  (b) The Closing Date is hereby designated as the "Startup Day"
within the meaning of Section 860G(a)(9) of the Code of each Trust REMIC.

                  (c) The Trustee shall pay out of its own funds, without any
right of reimbursement, any and all expenses relating to any tax audit of the
Trust Fund (including, but not limited to, any professional fees or any
administrative or judicial proceedings with respect to any Trust REMIC that
involve the Internal Revenue Service or state tax authorities), other than the
expense of obtaining any tax related Opinion of Counsel as specified herein. The
Trustee, as agent for each Trust REMIC's tax matters person, shall (i) act on
behalf of the Trust Fund in relation to any tax matter or controversy involving
any Trust REMIC and (ii) represent the Trust Fund in any administrative or
judicial proceeding relating to an examination or audit by any governmental
taxing authority with respect thereto. The holder of the largest Percentage
Interest of Residual Certificates shall be designated, in the manner provided
under Treasury regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1, as the tax matters person of each Trust REMIC. By their
acceptance thereof, the holder of the largest Percentage Interest of the
Residual Certificates hereby agrees to irrevocably appoint the Trustee or an
Affiliate as its agent to perform all of the duties of the tax matters person
for the Trust Fund.

                  (d) The Trustee shall prepare, sign and file all of the Tax
Returns in respect of each Trust REMIC. The expenses of preparing and filing
such returns shall be borne by the Trustee without any right of reimbursement
therefor. The Master Servicer shall provide on a timely basis to the Trustee or
its designee such information with respect to the assets of the Trust Fund as is
in its possession and reasonably required by the Trustee to enable it to perform
its obligations under this Article.

                  (e) The Trustee shall perform on behalf of each Trust REMIC
all reporting and other tax compliance duties that are the responsibility of
each Trust 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, as required by the Code, the REMIC Provisions

                                      -121-

<PAGE>

or other such compliance guidance, the Trustee shall provide (i) to any
Transferor of a Residual Certificate such information as is necessary for the
application of any tax relating to the transfer of a Residual Certificate to any
Person who is not a Permitted Transferee, (ii) to the Certificateholders such
information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of each Trust REMIC. The Master
Servicer shall provide on a timely basis to the Trustee such information with
respect to the assets of the Trust Fund, including, without limitation, the
Mortgage Loans, as is in its possession and reasonably required by the Trustee
to enable it to perform its obligations under this subsection. In addition, the
Depositor shall provide or cause to be provided to the Trustee, within ten (10)
days after the Closing Date, all information or data that the Trustee reasonably
determines to be relevant for tax purposes as to the valuations and issue prices
of the Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.

                  (f) The Master Servicer and the Trustee shall take such action
and shall cause each Trust REMIC to take such action as shall be necessary to
create or maintain the status thereof as a REMIC under the REMIC Provisions. The
Master Servicer and the Trustee shall not take any action, cause the Trust Fund
to take any action or fail to take (or fail to cause to be taken) any action
that, under the REMIC Provisions, if taken or not taken, as the case may be,
could (i) endanger the status of any Trust REMIC as a REMIC or (ii) result in
the imposition of a tax upon the Trust Fund (including but not limited to the
tax on prohibited transactions as defined in Section 860F(a)(2) of the Code and
the tax on contributions to a REMIC set forth in Section 860G(d) of the Code)
(either such event, an "Adverse REMIC Event") unless the Trustee has received an
Opinion of Counsel, addressed to the Trustee (at the expense of the party
seeking to take such action but in no event at the expense of the Trustee, to
the extent the Trustee is taking such action on behalf of the
Certificateholders) to the effect that the contemplated action will not, with
respect to such Trust REMIC, endanger such status or result in the imposition of
such a tax, nor shall the Master Servicer take or fail to take any action
(whether or not authorized hereunder) as to which the Trustee has advised it in
writing that it has received an Opinion of Counsel to the effect that an Adverse
REMIC Event could occur with respect to such action. In addition, prior to
taking any action with respect to any Trust REMIC or the respective assets of
each, or causing any Trust REMIC to take any action, which is not contemplated
under the terms of this Agreement, the Master Servicer will consult with the
Trustee or its designee, in writing, with respect to whether such action could
cause an Adverse REMIC Event to occur with respect to such Trust REMIC, and the
Master Servicer shall not take any such action or cause any Trust REMIC to take
any such action as to which the Trustee has advised it in writing that an
Adverse REMIC Event could occur. The Trustee may consult with counsel to make
such written advice, and the cost of same shall be borne by the party seeking to
take the action not permitted by this Agreement, but in no event shall such cost
be an expense of the Trustee (to the extent the Trustee is taking such action on
behalf of the Certificateholders). At all times as may be required by the Code,
the Trustee will ensure that substantially all of the assets of each Trust REMIC
will consist of "qualified mortgages" as defined in Section 860G(a)(3) of the
Code and "permitted investments" as defined in Section 860G(a)(5) of the Code.

                  (g) In the event that any tax is imposed on "prohibited
transactions" of any Trust REMIC as defined in Section 860F(a)(2) of the Code,
on the "net income from foreclosure property"

                                      -122-

<PAGE>

of any Trust REMIC as defined in Section 860G(c) of the Code, on any
contributions to any Trust REMIC after the Startup Day therefor pursuant to
Section 860G(d) of the Code, or any other tax is imposed by the Code or any
applicable provisions of state or local tax laws, such tax shall be charged (i)
to the Trustee pursuant to Section 10.03 hereof, if such tax arises out of or
results from a breach by the Trustee of any of its obligations under this
Article X, (ii) to the Master Servicer pursuant to Section 10.03 hereof, if such
tax arises out of or results from a breach by the Master Servicer of any of its
obligations under Article III or this Article X, or otherwise (iii) against
amounts on deposit in the Distribution Account and shall be paid by withdrawal
therefrom.

                  (h) On or before April 15th of each calendar year, commencing
April 15, 2004, the Trustee shall deliver to the Master Servicer and the Rating
Agency a Certificate from a Responsible Officer of the Trustee stating the
Trustee's compliance with this Article X (without regard to the actions of any
Person other than the Trustee).

                  (i) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to each Trust REMIC on a calendar year
and on an accrual basis. The Trustee will apply for an Employee Identification
Number from the Internal Revenue Service via Form SS-4 or such other form as is
appropriate.

                  (j) Following the Startup Day, the Trustee shall not accept
any contributions of assets to any Trust REMIC other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the REMIC will not cause the such REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding or subject
such REMIC to any tax under the REMIC Provisions or other applicable provisions
of federal, state and local law or ordinances.

                  (k) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which any Trust REMIC will receive a fee or other
compensation for services nor permit any Trust REMIC to receive any income from
assets other than "qualified mortgages" as defined in Section 860G(a)(3) of the
Code or "permitted investments" as defined in Section 860G(a)(5) of the Code.

                  SECTION 10.02. Prohibited Transactions and Activities.

                  None of the Depositor, the Master Servicer or the Trustee
shall sell, dispose of or substitute for any of the Mortgage Loans (except in
connection with (i) the foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of any Trust REMIC, (iii) the
termination of any Trust REMIC pursuant to Article IX of this Agreement, (iv) a
substitution pursuant to Article II of this Agreement or (v) a purchase of
Mortgage Loans pursuant to Article II or III of this Agreement), nor acquire any
assets for any Trust REMIC (other than REO Property acquired in respect of a
defaulted Mortgage Loan), nor sell or dispose of any investments in the
Collection Account or the Distribution Account for gain, nor accept any
contributions to any Trust REMIC after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.03), unless it
has received an Opinion of Counsel, addressed to the Trustee (at the expense of
the party seeking to

                                      -123-

<PAGE>

cause such sale, disposition, substitution, acquisition or contribution but in
no event at the expense of the Trustee, to the extent the Trustee is taking such
action on behalf of the Certificateholders) that such sale, disposition,
substitution, acquisition or contribution will not (a) affect adversely the
status of any Trust REMIC as a REMIC or (b) cause any Trust REMIC to be subject
to a tax on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions.

                  SECTION 10.03. Master Servicer and Trustee Indemnification.

                  (a) The Trustee agrees to indemnify the Trust Fund, the
Depositor and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer as a result of a breach of the
Trustee's covenants set forth in this Article X.

                  (b) The Master Servicer agrees to indemnify the Trust Fund,
the Depositor and the Trustee for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Depositor or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in this Article X.

                                      -124-

<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION 11.01. Amendment.

                  This Agreement may be amended from time to time by the
Depositor, the Master Service and the Trustee without the consent of any of the
Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct, modify
or supplement any provisions herein (including to give effect to the
expectations of Certificateholders), (iii) to amend the provisions of Section
4.07 or (iv) to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this Agreement, provided that such action shall not adversely affect in any
material respect the interests of any Certificateholder, as evidenced by either
(a) an Opinion of Counsel delivered to the Trustee or (b) written notice to the
Depositor, the Master Servicer and the Trustee from the Rating Agencies that
such action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency.
No amendment shall be deemed to adversely affect in any material respect the
interests of any Certificateholder who shall have consented thereto, and no
Opinion of Counsel shall be required to address the effect of any such amendment
on any such consenting Certificateholder.

                  This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Trust Administrator and the Trustee with the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments received on Mortgage Loans which are required to be distributed on
any Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner, other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing at least 66% of
the Voting Rights allocated to such Class, or (iii) modify the consents required
by the immediately preceding clauses (i) and (ii) without the consent of the
Holders of all Certificates then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Depositor or the Master Servicer or any Affiliate thereof shall be entitled
to Voting Rights with respect to matters affecting such Certificates.

                  Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that such amendment will
not result in the imposition of any tax on any Trust REMIC pursuant to the REMIC
Provisions or cause any Trust REMIC to fail to qualify as a REMIC at any time
that any Certificates are outstanding.

                  Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder.

                                      -125-

<PAGE>

                  It shall not be necessary for the consent of
Certificateholders under this Section 11.01 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 Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.

                  The cost of any Opinion of Counsel to be delivered pursuant to
this Section 11.01 shall be borne by the Person seeking the related amendment,
but in no event shall such Opinion of Counsel be an expense of the Trustee, to
the extent the Trustee is taking such action on behalf of the
Certificateholders.

                  Notwithstanding the foregoing, the Trustee may, but shall not
be obligated to, enter into any amendment pursuant to this Section that affects
its rights, duties and immunities under this Agreement or otherwise.

                  SECTION 11.02. Recordation of Agreement; Counterparts.

                  To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Certificateholders, but
only upon direction of the Trustee accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.

                  SECTION 11.03. Limitation on Rights of Certificateholders.

                  The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.

                  No Certificateholder shall have any right to vote (except as
expressly provided for herein) 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 any 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.

                                      -126-

<PAGE>

                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless (i)
such Holder previously shall have given to the Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and (ii) the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

                  SECTION 11.04. 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.

                  SECTION 11.05. Notices.

                  All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if personally
delivered at or mailed by first class mail, postage prepaid, or by express
delivery service or delivered in any other manner specified herein, to (a) in
the case of the Depositor, 390 Greenwich Street, New York, New York 10013,
Attention: Mortgage Finance Group (telecopy number (212) 723-8604), or such
other address or telecopy number as may hereafter be furnished to the Master
Servicer and the Trustee in writing by the Depositor, (b) in the case of the
Master Servicer, Union Planters Mortgage, Inc., 215 Forrest Street, Hattiesburg,
Mississippi 39401-3476, Attention: Karen Griffis (telecopy number (601)
583-7100), with a copy to Brenda Goff, 215 Forrest Street, Hattiesburg,
Mississippi 39401-3476 (telecopy number (601) 554-2083), or such other address
or telecopy number as may hereafter be furnished to the Trustee and the
Depositor in writing by the Master Servicer, and (c) in the case of the Trustee,
Wells Fargo Bank Minnesota, National Association, P.O. Box 98, Columbia,
Maryland 21046, Attention: SBMSVII, Series 2003-UP2, with a copy to Wells Fargo
Bank Minnesota, National Association, 9062 Old Annapolis Road, Columbia,
Maryland 21045, Attention: SBMSVII, Series 2003-UP2, with a copy to Wells Fargo
Bank Minnesota, National Association, Sixth Street and Marquette Avenue, MAC N
9303-121, Minneapolis, Minnesota 55479, Attention: SBMSVII, Series 2003-UP2, or
such other address or telecopy number as may hereafter be furnished to the
Master Servicer and the Depositor in writing by the Trustee. Any notice required
or permitted to be given to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder

                                      -127-

<PAGE>

as shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such notice. A
copy of any notice required to be telecopid hereunder also shall be mailed to
the appropriate party in the manner set forth above.

                  SECTION 11.06. 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 11.07.            Notice to Rating Agency.

                  The Trustee shall use its best efforts promptly to provide
notice to the Rating Agency with respect to each of the following of which it
has actual knowledge:

                  (a) Any material change or amendment to this Agreement;

                  (b) The occurrence of any Master Servicer Event of Default
         that has not been cured or waived;

                  (c) The resignation or termination of the Master Servicer or
         the Trustee;

                  (d) The repurchase or substitution of Mortgage Loans pursuant
         to or as contemplated by Section 2.03;

                  (e) The final payment to the Holders of any Class of
         Certificates;

                  (f) Any change in the location of the Collection Account or
         the Distribution Account;

                  (g) Any event that would result in the inability of the
         Trustee, were it to succeed as Master Servicer, to make advances
         regarding delinquent Mortgage Loans; and

                  (h) The filing of any claim under the Master Servicer's
         blanket bond and errors and omissions insurance policy required by
         Section 3.14 or the cancellation or material modification of coverage
         under any such instrument.

                  In addition, the Trustee shall promptly furnish to the Rating
Agency copies of each report to Certificateholders described in Section 4.02 and
the Master Servicer, as required pursuant to Section 3.20 and Section 3.21,
shall promptly furnish to the Rating Agency copies of the following:

                  1. Each annual statement as to compliance described in Section
         3.20; and

                                      -128-

<PAGE>

                  2. Each annual independent public accountants' servicing
         report described in Section 3.21.

                  Any such notice pursuant to this Section 11.07 shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service
to Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007,
Attention: Residential Mortgage Surveillance Group, and Standard & Poor's, a
division of the McGraw-Hill Companies, Inc., 55 Water Street, New York, New York
10004, or such other addresses as each such Rating Agency may designate in
writing to the parties hereto.

                  SECTION 11.08. Article and Section References.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  SECTION 11.09. Grant of Security Interest.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Depositor to the Trustee be, and be
construed as, a sale of the Mortgage Loans by the Depositor and not a pledge of
the Mortgage Loans by the Depositor to secure a debt or other obligation of the
Depositor. However, in the event that, notwithstanding the aforementioned intent
of the parties, the Mortgage Loans are held to be property of the Depositor,
then, (a) it is the express intent of the parties that such conveyance be deemed
a pledge of the Mortgage Loans by the Depositor to the Trustee to secure a debt
or other obligation of the Depositor and (b)(1) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
Uniform Commercial Code as in effect from time to time in the State of New York;
(2) the conveyance provided for in Section 2.01 hereof shall be deemed to be a
grant by the Depositor to the Trustee of a security interest in all of the
Depositor's right, title and interest in and to the Mortgage Loans and all
amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts, other than investment earnings, from time to
time held or invested in the Collection Account and the Distribution Account,
whether in the form of cash, instruments, securities or other property; (3) the
obligations secured by such security agreement shall be deemed to be all of the
Depositor's obligations under this Agreement, including the obligation to
provide to the Certificateholders the benefits of this Agreement relating to the
Mortgage Loans and the Trust Fund; and (4) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. Accordingly, the Depositor hereby grants to the Trustee a
security interest in the Mortgage Loans and all other property described in
clause (2) of the preceding sentence, for the purpose of securing to the Trustee
the performance by the Depositor of the obligations described in clause (3) of
the preceding sentence. Notwithstanding the foregoing, the parties hereto intend
the conveyance pursuant to Section 2.01 to be a true, absolute and unconditional
sale of the Mortgage Loans and assets constituting the Trust Fund by the
Depositor to the Trustee.

                                      -129-

<PAGE>

                                      -130-

<PAGE>

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

                                      SALOMON BROTHERS MORTGAGE
                                      SECURITIES VII, INC.,
                                      as Depositor

                                      By:    /s/ David Reedy
                                             ---------------------------------
                                      Name:  David Reedy
                                      Title: Assistant Secretary

                                      UNION PLANTERS MORTGAGE, INC.,
                                      as Master Servicer

                                      By:    /s/ Morgan McCarty
                                             ---------------------------------
                                      Name:  Morgan McCarty
                                      Title: President

                                      WELLS FARGO BANK MINNESOTA, NATIONAL
                                      ASSOCIATION,
                                      as Trustee

                                      By:    /s/ Pete Gobell
                                             ---------------------------------
                                      Name:  Pete Gobell
                                      Title: Vice President

                                      -131-

<PAGE>

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

                  On the ____ day of July 2003, before me, a notary public in
and for said State, personally appeared _________________, known to me to be an
Assistant Vice President of Salomon Brothers Mortgage Securities VII, Inc., one
of the corporations that executed the within instrument, and also known to me to
be the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.

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

                                          _____________________________________
                                                     Notary Public

[Notarial Seal]

                                      -132-

<PAGE>

STATE OF _____________   )
                         ) ss.:
COUNTY OF ___________    )

                  On the ____ day of July 2003, before me, a notary public in
and for said State, personally appeared ______________, known to me to be a
________________ of Union Planters Mortgage, Inc., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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

                                          _____________________________________
                                                     Notary Public

[Notarial Seal]

                                      -133-

<PAGE>

STATE OF _____________    )
                          ) ss.:
COUNTY OF ___________     )

                  On the ____ day of July 2003, before me, a notary public in
and for said State, personally appeared ______________, known to me to be a
_______________ of Wells Fargo Bank Minnesota, National Association, one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such entity executed the within instrument.

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

                                          _____________________________________
                                                     Notary Public

[Notarial Seal]

                                      -134-

<PAGE>

                                   EXHIBIT A-1
                                   -----------

                          FORM OF CLASS A-1 CERTIFICATE

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

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

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class A-1 Certificates as of the Issue Date:
Pass-Through Rate: 4.00% per annum                         $131,586,000.00

Cut-off Date and date of Pooling and                       Denomination: $131,586,000.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP: 79549A XP 9
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-1-1

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-1 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the

                                      A-1-2

<PAGE>

"Certificates") and representing a Percentage Interest in the Class of
Certificates equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to

                                      A-1-3

<PAGE>

be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan and REO Property remaining in REMIC I and (ii) the purchase by the
party designated in the Agreement at a price determined as provided in the
Agreement from REMIC I of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all the Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 5% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-1-4

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-2
                                   -----------

                          FORM OF CLASS A-2 CERTIFICATE

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

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

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class A-2 Certificates as of the Issue Date:
Pass-Through Rate: 4.00% per annum                         $95,033,000.00

Cut-off Date and date of Pooling and                       Denomination: $95,033,000.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A XT 1
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-2-1

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the

                                      A-2-2

<PAGE>

"Certificates") and representing a Percentage Interest in the Class of
Certificates equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to

                                      A-2-3

<PAGE>

be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan and REO Property remaining in REMIC I and (ii) the purchase by the
party designated in the Agreement at a price determined as provided in the
Agreement from REMIC I of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all the Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 5% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-2-4

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-3
                                   -----------

                          FORM OF CLASS A-3 CERTIFICATE

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

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

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class A-3 Certificates as of the Issue Date:
Pass-Through Rate: 4.00% per annum                         $9,117,000.00

Cut-off Date and date of Pooling and                       Denomination: $9,117,000.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A XU 8
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-3-1

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-3 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-3 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the

                                      A-3-2

<PAGE>

"Certificates") and representing a Percentage Interest in the Class of
Certificates equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to

                                      A-3-3

<PAGE>

be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan and REO Property remaining in REMIC I and (ii) the purchase by the
party designated in the Agreement at a price determined as provided in the
Agreement from REMIC I of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all the Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 5% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-3-4

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-4
                                   -----------

                          FORM OF CLASS A-4 CERTIFICATE

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

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

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class A-4 Certificates as of the Issue Date:
Pass-Through Rate: 4.00%                                   $45,883,000.00

Cut-off Date and date of Pooling and                       Denomination: $45,883,000.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A XV 6
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-4-1

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class A-4 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-4 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-4 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the

                                      A-4-2

<PAGE>

"Certificates") and representing a Percentage Interest in the Class of
Certificates equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to

                                      A-4-3

<PAGE>

be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan and REO Property remaining in REMIC I and (ii) the purchase by the
party designated in the Agreement at a price determined as provided in the
Agreement from REMIC I of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all the Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 5% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-4-4

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-5
                                   -----------

                          FORM OF CLASS S-1 CERTIFICATE

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

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

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Initial Notional Amount of the Class S-1
                                                           Certificates as of the Issue Date:
Pass-Through Rate: 3.00% per annum                         $131,586,000.00

Cut-off Date and date of Pooling and                       Denomination: $131,586,000.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A XQ 7
</TABLE>

                                      A-5-1

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Notional Amount of the Class S-1 Certificates as of the Issue
Date) in that certain beneficial ownership interest evidenced by all the Class
S-1 Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Salomon Brothers
Mortgage Securities VII, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class S-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the

                                      A-5-2

<PAGE>

"Certificates") and representing a Percentage Interest in the Class of
Certificates equal to the denomination specified on the face hereof divided by
the aggregate Notional Amount of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to

                                      A-5-3

<PAGE>

be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan and REO Property remaining in REMIC I and (ii) the purchase by the
party designated in the Agreement at a price determined as provided in the
Agreement from REMIC I of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all the Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 5% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-5-4

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-6
                                   -----------

                          FORM OF CLASS S-2 CERTIFICATE

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

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

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Initial Notional Amount of the Class S-2
                                                           Certificates as of the Issue Date:
Pass-Through Rate: 3.00% per annum                         $150,033,000.00

Cut-off Date and date of Pooling and                       Denomination: $150,033,000.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A XW 4
</TABLE>

                                      A-6-1

<PAGE>

                       MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Notional Amount of the Class S-2 Certificates as of the Issue
Date) in that certain beneficial ownership interest evidenced by all the Class
S-2 Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Salomon Brothers
Mortgage Securities VII, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class S-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the

                                      A-6-2

<PAGE>

"Certificates") and representing a Percentage Interest in the Class of
Certificates equal to the denomination specified on the face hereof divided by
the aggregate Notional Amount of the Class of Certificates specified on the face
hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to

                                      A-6-3

<PAGE>

be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan and REO Property remaining in REMIC I and (ii) the purchase by the
party designated in the Agreement at a price determined as provided in the
Agreement from REMIC I of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from REMIC I all the Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Stated Principal Balance of the Mortgage Loans at the time of
purchase being less than 5% of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-6-4

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-7
                                   -----------

                         FORM OF CLASS IO-1 CERTIFICATE

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

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

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Initial Notional Amount of the Class IO-1
                                                           Certificates as of the Issue Date:
Pass-Through Rate: Variable                                $146,754,370.00

Cut-off Date and date of Pooling and                       Denomination: $146,754,370.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A XR 5
</TABLE>

                                      A-7-1

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Notional Amount of the Class IO-1 Certificates as of the Issue
Date) in that certain beneficial ownership interest evidenced by all the Class
IO-1 Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Salomon Brothers
Mortgage Securities VII, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class IO-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  The Pass-Through Rate for this Certificate is the Weighted
Average Stripped Interest Rate for the Group I Mortgage Loans for such
Distribution Date.

                                      A-7-2

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates equal to the denomination
specified on the face hereof divided by the aggregate Notional Amount of the
Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                                      A-7-3

<PAGE>

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-7-4

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-8
                                   -----------

                         FORM OF CLASS IO-2 CERTIFICATE

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

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

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Notional Amount of the Class IO-2
                                                           Certificates as of the Issue Date:
Pass-Through Rate: Variable                                $162,783,127.00

Cut-off Date and date of Pooling and                       Denomination: $162,783,127.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A XX 2
</TABLE>

                                      A-8-1

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Notional Amount of the Class IO-2 Certificates as of the Issue
Date) in that certain beneficial ownership interest evidenced by all the Class
IO-2 Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Salomon Brothers
Mortgage Securities VII, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class IO-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  The Pass-Through Rate for this Certificate is the Weighted
Average Stripped Interest Rate for the Group II Mortgage Loans for such
Distribution Date.

                                      A-8-2

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates equal to the denomination
specified on the face hereof divided by the aggregate Notional Amount of the
Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                                      A-8-3

<PAGE>

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-8-4

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                   EXHIBIT A-9
                                   -----------

                          FORM OF CLASS PO-1CERTIFICATE

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

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

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class PO-1 Certificates as of the Issue Date:
Cut-off Date and date of Pooling and                       $8,564,365.00
Servicing Agreement: July 1, 2003
                                                           Denomination: $8,564,365.00
First Distribution Date: August 25, 2003
                                                           Master Servicer: Union Planters Mortgage,
No. 1 Inc.

                                                           Trustee: Wells Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A XS 3
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                      A-9-1

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class PO-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class PO-1 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class PO-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate does not have a Pass-Through Rate and is not
entitled to any distributions of interest.

                                      A-9-2

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                                      A-9-3

<PAGE>

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-9-4

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                  EXHIBIT A-10
                                  ------------

                         FORM OF CLASS PO-2 CERTIFICATE

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

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

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class PO-2 Certificates as of the Issue Date:
Cut-off Date and date of Pooling and                       $5,424,762.00
Servicing Agreement: July 1, 2003
                                                           Denomination: $5,424,762.00
First Distribution Date: August 25, 2003
                                                           Master Servicer: Union Planters Mortgage,
No. 1 Inc.

                                                           Trustee: Wells Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A XY 0
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-10-1

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class PO-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class PO-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class PO-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate does not have a Pass-Through Rate and is not
entitled to any distributions of interest.

                                     A-10-2

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                                     A-10-3

<PAGE>

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-10-4

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                  EXHIBIT A-11
                                  ------------

                          FORM OF CLASS B-1 CERTIFICATE

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

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

         THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES TO THE
         EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
         HEREIN.

         ANY PURCHASER OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE MADE THE
         REPRESENTATION SET FORTH IN SECTION 5.02(c) OF THE AGREEMENT.

                                     A-11-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class B-1 Certificates as of the Issue Date:
Pass-Through Rate: 7.00% per annum                         $4,333,400.00

Cut-off Date and date of Pooling and                       Denomination: $4,333,400.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A XZ 7
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-11-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-1Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-1 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-1 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the

                                     A-11-3

<PAGE>

"Certificates") and representing a Percentage Interest in the Class of
Certificates equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  Any purchaser of this Certificate shall be deemed to have made
the representation set forth in section 5.02 (c) of the Agreement.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                                     A-11-4

<PAGE>

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-11-5

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                  EXHIBIT A-12
                                  ------------

                          FORM OF CLASS B-2 CERTIFICATE

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

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

         THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES AND THE
         CLASS B-1 CERTIFICATE TO THE EXTENT DESCRIBED IN THE POOLING AND
         SERVICING AGREEMENT REFERRED TO HEREIN.

         ANY PURCHASER OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE MADE THE
         REPRESENTATION SET FORTH IN SECTION 5.02(c) OF THE AGREEMENT.

                                     A-12-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class B-2 Certificates as of the Issue Date:
Pass-Through Rate: 7.00% per annum                         $3,404,800.00

Cut-off Date and date of Pooling and                       Denomination: $3,404,800.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A YA 1
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-12-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-2 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-2 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the

                                     A-12-3

<PAGE>

"Certificates") and representing a Percentage Interest in the Class of
Certificates equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  Any purchaser of this Certificate shall be deemed to have made
the representation set forth in section 5.02(c) of the Agreement.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                                     A-12-4

<PAGE>

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-12-5

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                  EXHIBIT A-13
                                  ------------

                          FORM OF CLASS B-3 CERTIFICATE

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

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

         THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE CLASS
         B-1 CERTIFICATES AND THE CLASS B-2 CERTIFICATES TO THE EXTENT DESCRIBED
         IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         ANY PURCHASER OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE MADE THE
         REPRESENTATION SET FORTH IN SECTION 5.02(c) OF THE AGREEMENT.

                                     A-13-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class B-3 Certificates as of the Issue Date:
Pass-Through Rate: 7.00% per annum                         $2,476,200.00

Cut-off Date and date of Pooling and                       Denomination: $2,476,200.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A YB 9
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-13-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Cede & Co. is the registered owner of a
Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-3 Certificates in REMIC II created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Salomon
Brothers Mortgage Securities VII, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-3 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the

                                     A-13-3

<PAGE>

"Certificates") and representing a Percentage Interest in the Class of
Certificates equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  Any purchaser of this Certificate shall be deemed to have made
the representation set forth in section 5.02(c) of the Agreement.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                                     A-13-4

<PAGE>

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-13-5

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                  EXHIBIT A-14
                                  ------------

                          FORM OF CLASS B-4 CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE CLASS
         B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES AND THE CLASS B-3
         CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
         AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                     A-14-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class B-4 Certificates as of the Issue Date:
Pass-Through Rate: 7.00% per annum                         $1,083,300.00

Cut-off Date and date of Pooling and                       Denomination: $1,083,300.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A YD 5
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-14-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Citigroup Global Markets Inc. is the
registered owner of a Percentage Interest (obtained by dividing the denomination
of this Certificate by the aggregate Certificate Principal Balance of the Class
B-4 Certificates as of the Issue Date) in that certain beneficial ownership
interest evidenced by all the Class B-4 Certificates in REMIC II created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter
called the "Depositor," which term includes any successor entity under the
Agreement), the Master Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-4 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                                     A-14-3

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee and the rights of
the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of

                                     A-14-4

<PAGE>

Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-14-5

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                  EXHIBIT A-15
                                  ------------

                          FORM OF CLASS B-5 CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE CLASS
         B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES, THE CLASS B-3
         CERTIFICATES AND THE CLASS B-4 CERTIFICATES TO THE EXTENT DESCRIBED IN
         THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                     A-15-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class B-5 Certificates as of the Issue Date:
Pass-Through Rate: 7.00% per annum                         $773,700.00

Cut-off Date and date of Pooling and                       Denomination: $773,700.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A YE 3
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-15-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Citigroup Global Markets Inc. is the
registered owner of a Percentage Interest (obtained by dividing the denomination
of this Certificate by the aggregate Certificate Principal Balance of the Class
B-5 Certificates as of the Issue Date) in that certain beneficial ownership
interest evidenced by all the Class B-5 Certificates in REMIC II created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter
called the "Depositor," which term includes any successor entity under the
Agreement), the Master Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-5 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                                     A-15-3

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of

                                     A-15-4

<PAGE>

Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-15-5

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                  EXHIBIT A-16
                                  ------------

                          FORM OF CLASS B-6 CERTIFICATE

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

         THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE CLASS
         B-1 CERTIFICATES, THE CLASS B-2 CERTIFICATES, THE CLASS B-3
         CERTIFICATES, THE CLASS B-4 CERTIFICATES AND THE CLASS B-5 CERTIFICATES
         TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED
         TO HEREIN.

         THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
         AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
         TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE
         EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW
         AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
         THE AGREEMENT.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

                                     A-16-1

<PAGE>

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class B-6 Certificates as of the Issue Date:
Pass-Through Rate: 7.00% per annum                         $1,857,869.45

Cut-off Date and date of Pooling and                       Denomination: $1,857,869.45
Servicing Agreement: July 1, 2003
                                                           Master Servicer: Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.                                                        1 Trustee: Wells
                                                           Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003

                                                           CUSIP:  79549A YF 0
</TABLE>

         DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
         CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
         OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
         LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
         CERTIFICATE.

                                     A-16-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Citigroup Global Markets Inc. is the
registered owner of a Percentage Interest (obtained by dividing the denomination
of this Certificate by the aggregate Certificate Principal Balance of the Class
B-6 Certificates as of the Issue Date) in that certain beneficial ownership
interest evidenced by all the Class B-6 Certificates in REMIC II created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter
called the "Depositor," which term includes any successor entity under the
Agreement), the Master Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-5 Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                                     A-16-3

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer, the Trustee, and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee shall require receipt of (i) if such
transfer is purportedly being made in reliance upon Rule 144A under the 1933
Act, written certifications from the Holder of the Certificate desiring to
effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit F-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor, the Trustee or
the Master Servicer in their respective capacities as such), together with
copies of the written certification(s) of the Holder of the Certificate desiring
to effect the transfer and/or such Holder's prospective transferee upon which
such Opinion of Counsel is based. None of the Depositor or the Trustee is
obligated to register or qualify the Class of

                                     A-16-4

<PAGE>

Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Depositor and the Master
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-16-5

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                  EXHIBIT A-17
                                  ------------

                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED
         STATES PERSON.

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

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
         POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
         RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
         SECURITY ACT OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT
         IN COMPLIANCE WITH THE PROCEDURES DESCRIBED HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
         MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
         TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
         POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
         FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
         INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER
         THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT
         FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION
         IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY
         ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH
         PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
         HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN
         AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
         TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
         SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
         FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
         REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
         DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN
         AGENT OF A

                                     A-17-1

<PAGE>

         DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
         NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED
         TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT
         LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
         HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE
         CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF
         SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT REFERRED TO
         HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED
         FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

<TABLE>
<CAPTION>
<S>                                                        <C>
Series 2003-UP2                                            Aggregate Certificate Principal Balance of the
                                                           Class R Certificates as of the Issue Date:
Pass-Through Rate: 7.00%                                   $100.00

Cut-off Date and date of Pooling and                       Denomination: $100.00
Servicing Agreement: July 1, 2003
                                                           Master Servicer:  Union Planters Mortgage,
First Distribution Date: August 25, 2003                   Inc.

No.1                                                       Trustee:  Wells Fargo Bank Minnesota,
                                                           National Association

                                                           Issue Date: July 30, 2003
</TABLE>

                                     A-17-2

<PAGE>

                        MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a portion of a Trust Fund (the
"Trust Fund") consisting primarily of a pool of conventional one- to
four-family, fixed-rate, first lien mortgage loans (the "Mortgage Loans") formed
and sold by

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

         THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
         SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., THE MASTER SERVICER,
         THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
         CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
         AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

                  This certifies that Citigroup Global Markets Inc. is the
registered owner of a Percentage Interest (obtained by dividing the denomination
of this Certificate by the aggregate Certificate Principal Balance of the Class
R Certificates as of the Issue Date) in that certain beneficial ownership
interest evidenced by all the Class R Certificates in REMIC II created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Salomon Brothers Mortgage Securities VII, Inc. (hereinafter
called the "Depositor," which term includes any successor entity under the
Agreement), the Master Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.

                  Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.

                  All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by the Trustee by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date or
otherwise by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

                                     A-17-3

<PAGE>

                  This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class of Certificates equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.

                  The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

                  The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

                  No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person using "Plan Assets" to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

                  The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange
of Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                                     A-17-4

<PAGE>

                  Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

                  The Holder of this Certificate, by its acceptance hereof,
shall be deemed to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the
REMIC.

                  The Depositor, the Master Servicer, the Trustee and any agent
of the Depositor, the Master Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.

                  The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan and REO Property
remaining in REMIC I and (ii) the purchase by the party designated in the
Agreement at a price determined as provided in the Agreement from REMIC I of all
the Mortgage Loans and all property acquired in respect of such Mortgage Loans.
The Agreement permits, but does not require, the party designated in the
Agreement to purchase from REMIC I all the Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Stated
Principal Balance of the Mortgage Loans at the time of purchase being less than
5% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

                  The recitals contained herein shall be taken as statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.

                  Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-17-5

<PAGE>

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

Dated: July __, 2003

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                         Authorized Officer

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

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

                                                WELLS FARGO BANK MINNESOTA,
                                                NATIONAL ASSOCIATION, as Trustee

                                                By:_____________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS
                                  -------------

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common                    UNIF GIFT MIN ACT - Custodian

TEN ENT - as tenants by the entireties            (Cust) (Minor) under
                                                  Uniform Gifts
JT TEN - as joint tenants with right                              to Minors Act
         if survivorship and not as                               ______________
          tenants in common                                          (State)

     Additional abbreviations may also be used though not in the above list.

                                   ASSIGNMENT
                                   ----------

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) a Percentage Interest equal to ____%
evidenced by the within Mortgage Pass-Through Certificates and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.

         I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:___________________________________________
_______________________________________________________________________________.

Dated:

                                        _______________________________
                                        Signature by or on behalf of assignor

                                        _______________________________
                                        Signature Guaranteed

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________ for the account
of _______________________________, account number ____________________________,
or, if mailed by check, to______________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________, as its agent.

<PAGE>

                                    EXHIBIT B
                                    ---------

                                   [Reserved]

                                       B-1

<PAGE>

                                   EXHIBIT C-1
                                   -----------

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                    ____________, 2003

Salomon Brothers Mortgage Securities VII, Inc.
390 Greenwich Street, 4th Floor
New York, New York 10013

Union Planters Mortgage, Inc.
215 Forrest Street
Hattiesburg, Mississippi 39401-3476

                  Re:      Pooling and Servicing Agreement, dated as of July 1,
                           2003, among Salomon Brothers Mortgage Securities VII,
                           Inc., Union Planters Mortgage, Inc., Wells Fargo Bank
                           Minnesota, National Association as Trustee, Mortgage
                           Pass-Through Certificates, Series 2003-UP2
                           -----------------------------------------------------

Ladies and Gentlemen:

                  Attached is the Trustee's preliminary exceptions in accordance
with Section 2.02 of the referenced Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"). Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them in the Pooling and
Servicing Agreement.

                  As to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in the exception report annexed thereto as not being covered by such
certification), (i) all documents required to be delivered to it pursuant
Section 2.01 of the Agreement are in its possession, (ii) such documents have
been reviewed by it and have not been mutilated, damaged or torn and relate to
such Mortgage Loan and (iii) based on its examination and only as to the
foregoing, the information set forth in the Mortgage Loan Schedule that
corresponds to items (i), (iii) and (xiv) of the Mortgage Loan Schedule
accurately reflects information set forth in the Mortgage File.

                  The Trustee is under no duty or obligation to inspect, review
or examine any such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable, or appropriate for the represented
purpose or that they have actually been recorded or that they are other than
what they purport to be on their face.

                                          WELLS FARGO BANK MINNESOTA,
                                          NATIONAL ASSOCIATION, as Trustee

                                          By:______________________________
                                          Name:
                                          Title:

                                      C-1-1

<PAGE>

                                   EXHIBIT C-2
                                   -----------

                      FORM OF TRUSTEE'S FINAL CERTIFICATION

                                                 [Date]

Salomon Brothers Mortgage Securities VII, Inc.
390 Greenwich Street, 4th Floor
New York, NY 10013

Union Planters Mortgage, Inc.
215 Forrest Street
Hattiesburg, Mississippi 39401-3476

                  Re:      Pooling and Servicing Agreement, dated as of July 1,
                           2003, among Salomon Brothers Mortgage Securities VII,
                           Inc., Union Planters Mortgage, Inc., Wells Fargo Bank
                           Minnesota, National Association as Trustee, Mortgage
                           Pass-Through Certificates, Series 2003-UP2
                           -----------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.01 of the above-captioned Pooling
and Servicing 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 or a
Custodian on its behalf has received:

                  (i) the original recorded Mortgage, with evidence of recording
         thereon or a copy of the Mortgage certified by the public recording
         office in those jurisdictions where the public recording office retains
         the original and the original recorded power of attorney, if the
         Mortgage was executed pursuant to a power of attorney, with evidence of
         recording thereon or a copy of the power of attorney certified by the
         public recording office where the public recording office retains the
         original;

                  (ii) an original Assignment of the Mortgage executed by the
         Originator or the Originator's successor in interest in blank, together
         with any intervening assignments and showing a complete chain of title
         from the original mortgagee named under the Mortgage to the Originator
         or the Originator's successor in interest in blank or an Affiliate of
         the Originator;

                  (iii) the original lender's title insurance policy, together
         with all endorsements or riders which were issued with or subsequent to
         the issuance of such policy, insuring the priority of the Mortgage as a
         first lien on the Mortgaged Property represented therein as a fee
         interest vested in the Mortgagor, or in the event such original title
         policy is unavailable, a written commitment or uniform binder or
         preliminary report of title issued by the title insurance or escrow
         company or an attorney's title opinion, if customary in the related
         jurisdiction where the Mortgaged Property is located.

                                      C-2-1

<PAGE>

                  The Trustee is under no duty or obligation to inspect, review
or examine any such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable, or appropriate for the represented
purpose or that they have actually been recorded or that they are other than
what they purport to be on their face.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.

                                            WELLS FARGO BANK MINNESOTA,
                                            NATIONAL ASSOCIATION, as Trustee

                                            By:________________________________
                                            Name:
                                            Title:

                                      C-2-2

<PAGE>

                                   EXHIBIT C-3
                                   -----------

                   FORM OF TRUSTEE'S RECEIPT OF MORTGAGE NOTES

                                                 July 30, 2003

Salomon Brothers Mortgage Securities VII, Inc.
390 Greenwich Street, 4th Floor
New York, NY 10013

Union Planters Mortgage, Inc.
215 Forrest Street
Hattiesburg, Mississippi 39401-3476

                  Re:      Pooling and Servicing Agreement, dated as of July 1,
                           2003, among Salomon Brothers Mortgage Securities VII,
                           Inc., Union Planters Mortgage, Inc., Wells Fargo Bank
                           Minnesota, National Association as Trustee, Mortgage
                           Pass-Through Certificates, Series 2003-UP2
                           -----------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.01 of the above-captioned Pooling
and Servicing Agreement, we hereby acknowledge the receipt of the original
Mortgage Notes (a copy of which is attached hereto as Exhibit 1) with any
exceptions thereto listed on Exhibit 2.

                                          WELLS FARGO BANK MINNESOTA,
                                          NATIONAL ASSOCIATION, as Trustee

                                          By:________________________________
                                          Name:
                                          Title:

                                      C-3-1

<PAGE>

                                    EXHIBIT D
                                    ---------

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                                       D-1

<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  This is a Mortgage Loan Purchase Agreement (the "Agreement"),
dated July 28, 2003, among Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation (the "Purchaser"), Citigroup Global Markets Realty Corp., a
New York corporation (the "Seller") and Union Planters Bank, National
Association, a national banking association (the "Originator").

                              Preliminary Statement
                              ---------------------

                  The Seller intends to sell the Mortgage Loans (as hereinafter
defined) to the Purchaser on the terms and subject to the conditions set forth
in this Agreement. The Purchaser intends to deposit the Mortgage Loans into a
mortgage pool comprising the trust fund. The trust fund will be evidenced by a
single series of mortgage pass-through certificates designated as Series
2003-UP2 (the "Certificates"). The Certificates will consist of fifteen classes
of certificates. The Certificates will be issued pursuant to a Pooling and
Servicing Agreement, dated as of July 1, 2001 (the "Pooling and Servicing
Agreement"), among the Purchaser as depositor, Union Planters Mortgage, Inc. as
master servicer (the "Master Servicer") and Wells Fargo Bank Minnesota, National
Association as trustee (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Pooling and Servicing Agreement.

                  The parties hereto agree as follows:

                  SECTION 1. AGREEMENT TO PURCHASE. The Seller agrees to sell,
and the Purchaser agrees to purchase, on or before July 30, 2003 (the "Closing
Date"), certain fixed-rate, conventional residential mortgage loans purchased by
the Seller from the Originator (the "Mortgage Loans"), having an aggregate
principal balance as of the close of business on July 1, 2003 (the "Cut-off
Date") of $309,537,496.45 (the "Closing Balance"), after giving effect to all
payments due on the Mortgage Loans on or before the Cut-off Date, whether or not
received.

                  SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the
Seller have agreed upon which of the mortgage loans owned by the Seller are to
be purchased by the Purchaser pursuant to this Agreement and the Seller will
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the "Closing Schedule") that together shall describe such Mortgage Loans and
set forth all of the Mortgage Loans to be purchased under this Agreement. The
Closing Schedule will conform to the requirements set forth in this Agreement
and to the definition of "Mortgage Loan Schedule" under the Pooling and
Servicing Agreement. The Closing Schedule shall be used as the Mortgage Loan
Schedule under the Pooling and Servicing Agreement and shall be based on
information provided by the Originator.

                  SECTION 3. CONSIDERATION.

                           (a) In consideration for the Mortgage Loans to be
purchased hereunder, the Purchaser shall, as described in Section 8, pay to or
upon the order of the Seller in immediately available funds an amount (the
"Mortgage Loan Purchase Price") equal to the net sale proceeds of the
Certificates, plus accrued interest.

<PAGE>

                           (b) The Purchaser or any assignee, transferee or
designee of the Purchaser shall be entitled to all scheduled payments of
principal due after the Cut-off Date, all other payments of principal due and
collected after the Cut-off Date, and all payments of interest on the Mortgage
Loans allocable to the period after the Cut-off Date. All scheduled payments of
principal and interest due on or before the Cut-off Date and collected after the
Cut-off Date shall belong to the Seller.

                           (c) Pursuant to the Pooling and Servicing Agreement,
the Purchaser will assign all of its right, title and interest in and to the
Mortgage Loans, together with its rights under this Agreement, to the Trustee
for the benefit of the related Certificateholders.

                  SECTION 4.        TRANSFER OF THE MORTGAGE LOANS.

                           (a) POSSESSION OF MORTGAGE FILES. The Seller does
hereby sell, transfer, assign, set over and convey to the Purchaser, without
recourse but subject to the terms of this Agreement, all of its right, title and
interest in, to and under the Mortgage Loans. The contents of each Mortgage File
not delivered to the Purchaser or to any assignee, transferee or designee of the
Purchaser on or prior to the Closing Date are and shall be held in trust by the
Seller for the benefit of the Purchaser or any assignee, transferee or designee
of the Purchaser. Upon the sale of the Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the other contents of the related
Mortgage File is vested in the Purchaser and the ownership of all records and
documents with respect to the related Mortgage Loan prepared by or that come
into the possession of the Seller on or after the Closing Date shall immediately
vest in the Purchaser and shall be delivered immediately to the Purchaser or as
otherwise directed by the Purchaser.

                           (b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. In
connection with such transfer and assignment, the Seller does hereby deliver to,
and deposit with, the Purchaser, the following documents or instruments with
respect to each Mortgage Loan so transferred and assigned (a "Mortgage File"):

                           (i) the original Mortgage Note, endorsed by the
         Originator or the Originator's successor in interest in blank, or with
         respect to any lost Mortgage Note, an original Lost Note Affidavit
         stating that the original mortgage note was lost, misplaced or
         destroyed, together with a copy of the related mortgage note; PROVIDED,
         HOWEVER, that such substitutions of Lost Note Affidavits for original
         Mortgage Notes may occur only with respect to Mortgage Loans, the
         aggregate Cut-off Date Principal Balance of which is less than or equal
         to 2.00% of the Pool Balance as of the Cut-off Date;

                           (ii) the original recorded Mortgage, with evidence of
         recording thereon or a copy of the Mortgage certified by the public
         recording office in those jurisdictions where the public recording
         office retains the original and the original recorded power of
         attorney, if the Mortgage was executed pursuant to a power of attorney,
         with evidence of recording thereon or a copy of the power of attorney
         certified by the public recording office where the public recording
         office retains the original;

                           (iii) an original Assignment of the Mortgage executed
         by the Originator or the Originator's successor in interest in blank,
         together with any intervening assignments

                                       -2-

<PAGE>

         and showing a complete chain of title from the original mortgagee named
         under the Mortgage to the Originator or the Originator's successor in
         interest in blank or an Affiliate of the Originator;

                           (iv) the originals of all assumption, modification,
         consolidation or extension agreements, if any;

                           (v) the original of any guarantee executed in
         connection with the Mortgage Note;

                           (vi) the original lender's title insurance policy,
         together with all endorsements or riders which were issued with or
         subsequent to the issuance of such policy, insuring the priority of the
         Mortgage as a first lien on the Mortgaged Property represented therein
         as a fee interest vested in the Mortgagor, or in the event such
         original title policy is unavailable, a written commitment or uniform
         binder or preliminary report of title issued by the title insurance or
         escrow company or an attorney's title opinion, if customary in the
         related jurisdiction where the Mortgaged Property is located; and

                           (vii) the original of any security agreement, chattel
         mortgage or equivalent document executed in connection with the
         Mortgage.

                  With respect to each Mortgage Note and Assignment endorsed in
blank as of the Closing Date, within ninety (90) days of the Closing Date the
Seller shall cause such endorsements to be completed in the following form: "Pay
to the order of Wells Fargo Bank Minnesota, National Association, as Trustee,
without recourse."

                  Notwithstanding the foregoing, the parties hereto acknowledge
that on the Closing Date, the Seller will deliver to, and deposit with, the
Purchaser, the Mortgage Note and will deliver the remaining contents of each
Mortgage File within 60 days following the Closing Date.

                  In instances where an original recorded Mortgage, power of
attorney or any assumption, modification, consolidation or extension agreement
cannot be delivered by the Seller to the Purchaser within 60 days following the
Closing Date, due to a delay in connection with the recording of such Mortgage,
power of attorney or assumption, modification, consolidation or extension
agreement, the Depositor may, in lieu of delivering such original recorded
Mortgage, power of attorney or assumption, modification, consolidation or
extension agreement referred to in clause (ii) or clause (iv) above, deliver to
the Purchaser a copy thereof, provided that the Depositor certifies that the
original Mortgage, power of attorney, assumption, modification, consolidation or
extension agreement has been delivered for recordation. In instances where an
original recorded Mortgage or power of attorney has been lost or misplaced, the
Seller may deliver or cause to be delivered, in lieu of such Mortgage or power
of attorney, a copy of such Mortgage or power of attorney bearing recordation
information and certified as true and correct by the office in which recordation
thereof was made. In instances where an Assignment in recordable form cannot be
delivered by the Seller to the Purchaser within 60 days following the Closing
Date, due to a delay in connection with the recording of the Mortgage, the
Seller may, in lieu of delivering the completed assignment in recordable form
referred to in clause (iii) above to the Purchaser, deliver such

                                       -3-

<PAGE>

Assignment to the Purchaser completed except for recording information. In all
such instances, the Seller will deliver the original recorded Mortgage or power
of attorney and completed Assignment (if applicable) to the Purchaser promptly
upon receipt of such Mortgage or power of attorney.

                  The Originator shall cause all Assignments referred to in
clause (iii) above and, to the extent necessary, in (iv) above to be recorded.
The Originator shall furnish the Purchaser, or its designated agent, with a copy
of each Assignment submitted for recording. In the event that any such
Assignment is lost or returned unrecorded because of a defect therein, the
Originator shall promptly have a substitute Assignment prepared or have such
defect cured, as the case may be, and thereafter cause each such Assignment to
be duly recorded.

                  Notwithstanding the foregoing, for administrative convenience
and facilitation of servicing and to reduce closing costs, the Assignments shall
not be required to be submitted for recording (except with respect to any
Mortgage Loan located in Florida and Maryland) unless such failure to record
would result in a withdrawal or a downgrading by any Rating Agency of the rating
on any Class of Certificates; provided, however, the Originator shall submit
each Assignment for recording, at no expense to the Trust Fund or Trustee, upon
the earliest to occur of: (i) reasonable direction by Holders of Certificates
entitled to at least 25% of the Voting Rights, (ii) the occurrence of a Master
Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency
or foreclosure relating to the Originator, (iv) the occurrence of a servicing
transfer as described in Section 7.02 of the Pooling and Servicing Agreement,
(v) with respect to any one Assignment the occurrence of a foreclosure relating
to the Mortgagor under the related Mortgage and (vi) on or after the 90th day on
which the payment for such Mortgage Loan was due and payable and not received.

                  The Seller shall deliver or cause to be delivered to the
Purchaser promptly upon receipt thereof from the Originator any other original
documents constituting a part of a Mortgage File received with respect to any
Mortgage Loan, including, but not limited to, any original documents evidencing
an assumption, modification, consolidation or extension of any Mortgage Loan.

                  All original documents relating to the Mortgage Loans that are
not delivered to the Purchaser are and shall be held by or on behalf of the
Purchaser in trust for the benefit of the Trustee on behalf of the
Certificateholders. In the event that any such original document is required
pursuant to the terms of this Section to be a part of a Mortgage File, such
document shall be delivered promptly to the Purchaser. Any such original
document delivered to or held by the Purchaser that is not required pursuant to
the terms of this Section to be a part of a Mortgage File, shall be delivered
promptly to the Seller.

                           (c) ACCEPTANCE OF MORTGAGE LOANS. The documents
delivered pursuant to Section 4(b) hereof shall be reviewed by the Purchaser or
any assignee, transferee or designee of the Purchaser at any time before or
after the Closing Date (and with respect to each document permitted to be
delivered after the Closing Date within seven days of its delivery) to ascertain
that all required documents have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule.

                                       -4-

<PAGE>

                           (d) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser
has the right to assign its interest under this Agreement, in whole or in part,
to the Trustee, as may be required to effect the purposes of the Pooling and
Servicing Agreement, without the consent of the Seller or the Originator, and
the assignee shall succeed to the rights and obligations hereunder of the
Purchaser. Any expense reasonably incurred by or on behalf of the Purchaser, the
Master Servicer or the Trustee in connection with enforcing any obligations of
the Seller or the Originator under this Agreement will be promptly reimbursed by
the Seller or the Originator, as applicable.

                           (e) EXAMINATION OF MORTGAGE FILES. Prior to the
Closing Date, the Seller shall either (i) deliver in escrow to the Purchaser or
to any assignee, transferee or designee of the Purchaser, for examination, the
Mortgage File pertaining to each Mortgage Loan, or (ii) make such Mortgage Files
available to the Purchaser or to any assignee, transferee or designee of the
Purchaser for examination. Such examination may be made by the Purchaser or the
Trustee, and their respective designees, upon reasonable notice to the Seller
during normal business hours before the Closing Date and within 60 days after
the Closing Date. If any such person makes such examination prior to the Closing
Date and identifies any Mortgage Loans that do not conform to the requirements
of the Purchaser as described in this Agreement, such Mortgage Loans shall be
deleted from the Closing Schedule. The Purchaser may, at its option and without
notice to the Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Purchaser or
any person has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the rights of the Purchaser
or any assignee, transferee or designee of the Purchaser to demand repurchase or
other relief as provided herein or under the Pooling and Servicing Agreement.

                  SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                             ORIGINATOR AND THE SELLER

                  (a) The Originator hereby represents and warrants to the
Seller and the Purchaser, as of the date hereof and as of the Closing Date, and
covenants, that:

                           (i) The Originator is a national banking association,
duly organized and validly existing and in good standing under the laws of the
United States with full corporate power and authority to conduct its business as
presently conducted by it to the extent material to the consummation of the
transactions contemplated herein. The Originator had the full corporate power
and authority to acquire the Mortgage Loans. The Originator has the full
corporate power and authority to own the Mortgage Loans and to transfer and
convey the Mortgage Loans to the Purchaser and has the full corporate power and
authority to execute and deliver, engage in the transactions contemplated by,
and perform and observe the terms and conditions of this Agreement;

                           (ii) This Agreement has been duly and validly
authorized, executed and delivered by the Originator, all requisite corporate
action having been taken, and (assuming the due authorization, execution and
delivery hereof by the Purchaser and the Seller) constitutes the valid, legal
and binding obligation of the Originator, enforceable in accordance with its
terms, except as such enforcement may be limited by (A) bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to or
affecting the rights of creditors generally, (B) general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or

                                       -5-

<PAGE>

at law) or (C) public policy considerations underlying the securities laws, to
the extent that such public policy considerations limit the enforceability of
the provisions of this Agreement which purport to provide indemnification from
securities laws liabilities;

                           (iii) No consent, approval, authorization or order
of, registration or filing with, or notice to any governmental authority or
court is required, under federal laws for the execution, delivery and
performance by the Originator of, or compliance by the Originator with, this
Agreement or the consummation by the Originator of any other transaction
contemplated hereby and by the Pooling and Servicing Agreement; provided,
however, that the Originator makes no representation or warranty regarding
federal or state securities laws in connection with the sale or distribution of
the Certificates;

                           (iv) No certificate of an officer, statement or other
information furnished in writing or report delivered by the Originator to the
Purchaser, any affiliate of the Purchaser or the Trustee for use in connection
with the purchase of the Mortgage Loans and the transactions contemplated
hereunder and under the Pooling and Servicing Agreement will contain any untrue
statement of a material fact, or omit a material fact necessary to make the
information, certificate, statement or report not misleading in any material
respect.

                           (v) The execution, delivery or performance of this
Agreement by the Originator does not conflict with and will not result in a
breach of or constitute a default (or an event, which with notice or lapse of
time or both, would constitute a default) under (A) any terms or provisions of
the certificate of incorporation or by-laws of the Originator, (B) any term or
provision of any material agreement, contract, instrument or indenture, to which
the Originator is a party or by which the Originator or any of its property is
bound or (C) any law, rule, regulation, order, judgment, writ, injunction or
decree of any court or governmental authority having jurisdiction over the
Originator or any of its property, or results or will result in the creation or
imposition of any lien, charge or encumbrance which would have a material
adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans;

                           (vi) [Reserved];

                           (vii) There is no litigation currently pending or, to
the best of the Originator's knowledge, threatened against the Originator that
would reasonably be expected to adversely affect the transfer of the Mortgage
Loans, the issuance of the Certificates, the execution, delivery, performance or
enforceability of this Agreement or that would result in a material adverse
change in the financial condition of the Originator; and

                           (viii) With respect to the Mortgage Loans, the
Originator hereby represents and warrants, as of the date hereof and as of the
Closing Date, that each Mortgage Loan constitutes a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code.

                  (b) The Seller hereby represents and warrants to the
Originator and the Purchaser, as of the date hereof and as of the Closing Date,
and covenants, that:

                                       -6-

<PAGE>

                           (i) The Seller is duly organized, validly existing
and in good standing as a corporation under the laws of the State of New York
with full corporate power and authority to conduct its business as presently
conducted by it to the extent material to the consummation of the transactions
contemplated herein. The Seller has the full corporate power and authority to
own the Mortgage Loans and to transfer and convey the Mortgage Loans to the
Purchaser and has the full corporate power and authority to execute and deliver,
engage in the transactions contemplated by, and perform and observe the terms
and conditions of this Agreement.

                           (ii) The Seller has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement, assuming due authorization, execution and
delivery by the Originator and the Purchaser, constitutes a legal, valid and
binding obligation of the Seller, enforceable against it in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency or reorganization or by general principles of equity.

                           (iii) The execution, delivery and performance of this
Agreement by the Seller (x) does not conflict and will not conflict with, does
not breach and will not result in a breach of and does not constitute and will
not constitute a default (or an event, which with notice or lapse of time or
both, would constitute a default) under (A) any terms or provisions of the
articles of incorporation or by-laws of the Seller, (B) any term or provision of
any material agreement, contract, instrument or indenture, to which the Seller
is a party or by which the Seller or any of its property is bound or (C) any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Seller or any of its
property and (y) does not create or impose and will not result in the creation
or imposition of any lien, charge or encumbrance which would have a material
adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans.

                           (iv) No consent, approval, authorization or order of,
registration or filing with, or notice on behalf of the Seller to any
governmental authority or court is required, under federal laws or the laws of
the State of New York, for the execution, delivery and performance by the Seller
of, or compliance by the Seller with, this Agreement or the consummation by the
Seller of any other transaction contemplated hereby and by the Pooling and
Servicing Agreement; provided, however, that the Seller makes no representation
or warranty regarding federal or state securities laws in connection with the
sale or distribution of the Certificates.

                           (v) This Agreement does not contain any untrue
statement of material fact or omit to state a material fact necessary to make
the statements contained herein not misleading. The written statements, reports
and other documents prepared and furnished or to be prepared and furnished by
the Seller pursuant to this Agreement or in connection with the transactions
contemplated hereby taken in the aggregate do not contain any untrue statement
of material fact or omit to state a material fact necessary to make the
statements contained therein not misleading.

                           (vi) The Seller is not in violation of, and the
execution and delivery of this Agreement by the Seller and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction over the
Seller or its

                                       -7-

<PAGE>

assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder.

                           (vii) The Seller does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement.

                           (viii) Immediately prior to the sale of the Mortgage
Loans to the Purchaser as herein contemplated, the Seller will be the owner of
the related Mortgage and the indebtedness evidenced by the related Mortgage
Note, and, upon the payment to the Seller of the Purchase Price, in the event
that the Seller retains or has retained record title, the Seller shall retain
such record title to each Mortgage, each related Mortgage Note and the related
Mortgage Files with respect thereto in trust for the Purchaser as the owner
thereof from and after the date hereof.

                           (ix) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans by the Seller or the
consummation of the transactions contemplated by this Agreement or (C) that
might prohibit or materially and adversely affect the performance by the Seller
of its obligations under, or validity or enforceability of, this Agreement.

                           (x) The consummation of the transactions contemplated
by this Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller are not subject to the bulk transfer or any similar statutory
provisions.

                           (xi) The Seller has not dealt with any broker,
investment banker, agent or other person, except for the Purchaser or any of its
affiliates, that may be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans.

                           (xii) There is no litigation currently pending or, to
the best of the Seller's knowledge without independent investigation, threatened
against the Seller that would reasonably be expected to adversely affect the
transfer of the Mortgage Loans, the issuance of the Certificates or the
execution, delivery, performance or enforceability of this Agreement, or that
would result in a material adverse change in the financial condition of the
Seller.

                           (xiii) The Seller is solvent and will not be rendered
insolvent by the consummation of the transactions contemplated hereby. The
Seller is not transferring any Mortgage loan with any intent to hinder, delay or
defraud any of its creditors.

                           (xiv) Each Mortgage Loan at the time it was made
complied in all material respects with applicable local, state and federal laws,
including, but not limited to, all applicable predatory and abusive lending
laws.

                                       -8-

<PAGE>

                           (xv) None of the Mortgage Loans are High Cost as
defined by any applicable predatory and abusive lending laws.

                  SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
                             RELATING TO THE MORTGAGE LOANS.

                  The Originator hereby represents and warrants to the Seller
and the Purchaser that, as to each Mortgage Loan, as of the Closing Date (or
such other date specified herein) for such Mortgage Loan:

                  (i) The information set forth in the Mortgage Loan Schedule is
complete, true and correct as of the Cut-off Date;

                  (ii)     [Reserved];

                  (iii) All payments required to be made up to the close of
business on the Closing Date for such Mortgage Loan under the terms of the
Mortgage Note have been made; the Originator has not advanced funds, or induced,
solicited or knowingly received any advance of funds from a party other than the
owner of the related Mortgaged Property, directly or indirectly, for the payment
of any amount required by the Mortgage Note or Mortgage; and except with respect
to 3.65% of the Group I Mortgage Loans and 4.84% of the Group II Mortgage Loans
(in each case, by aggregate principal balance of the related Loan Group as of
the Cut-off Date), there has been no delinquency, exclusive of any period of
grace, in any payment by the Mortgagor thereunder during the last twelve months;

                  (iv) To the best knowledge of the Originator, there are no
delinquent taxes, ground rents, water charges, sewer rents, assessments,
insurance premiums, leasehold payments, including assessments payable in future
installments or other outstanding charges affecting the related Mortgaged
Property;

                  (v) To the best knowledge of the Originator, the terms of the
Mortgage Note and the Mortgage have not been impaired, waived, altered or
modified in any respect, except by written instruments included in the Mortgage
File, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage; the substance of any such waiver,
alteration or modification has been approved by the title insurer, to the extent
required by the related policy, and is reflected on the Mortgage Loan Schedule.
No instrument of waiver, alteration or modification has been executed by the
Originator or any other person in the chain of title from the Originator, and no
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement approved by the title insurer, to the extent required by
the policy, and the terms of which are reflected in the Mortgage Loan Schedule
and included in the related Mortgage File;

                  (vi) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off,

                                       -9-

<PAGE>

counterclaim or defense, including the defense of usury and no such right of
rescission, set-off, counterclaim or defense has been asserted with respect
thereto;

                  (vii) To the best knowledge of the Originator, all buildings
upon the Mortgaged Property are insured by a generally acceptable insurer
against loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, pursuant to
insurance policies conforming to the requirements of this Agreement. All such
insurance policies contain a standard mortgagee clause naming the Originator,
its successors and assigns as mortgagee and all premiums thereon have been paid.
If upon origination of the Mortgage Loan, the Mortgaged Property was in an area
identified on a Flood Hazard Map or Flood Insurance Rate Map issued by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect which policy conforms to the requirements of Fannie Mae and Freddie
Mac. The Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at the Mortgagor's cost and expense, and on the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor;

                  (viii) To the best knowledge of the Originator, any and all
requirements of any federal, state or local law including, without limitation,
usury, truth in lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity or disclosure laws applicable to the
origination and servicing of the Mortgage Loan have been complied with;

                  (ix) The Mortgage has not been satisfied, canceled,
subordinated or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release;

                  (x) The Mortgage is a valid, existing and enforceable first
lien on the Mortgaged Property, including all improvements on the Mortgaged
Property subject only to (a) the lien of current real property taxes and
assessments not yet due and payable, (b) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of the date
of recording being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and which do not adversely affect the appraised
value of the Mortgaged Property and (c) other matters to which like properties
are commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, existing and enforceable first
lien and first priority security interest;

                  (xi) The Mortgage Note and the related Mortgage are genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and with respect to any Mortgage Note
marked "Renewal and Extension," such Mortgage Note is the legal, valid and
binding obligation of the maker thereof, enforceable in accordance with its
terms;

                                      -10-

<PAGE>

                  (xii) To the best knowledge of the Originator, all parties to
the Mortgage Note and the Mortgage had legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note and the Mortgage, and the
Mortgage Note and the Mortgage have been duly and properly executed by such
parties. The Mortgagor is a natural person who is a party to the Mortgage Note
and the Mortgage is in an individual capacity or family trust that is guaranteed
by a natural person;

                  (xiii) The proceeds of the Mortgage Loan have been fully
disbursed to or for the account of the Mortgagor and there is no obligation for
the Mortgagee to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due to the Mortgagee pursuant to the Mortgage
Note or Mortgage;

                  (xiv)    [Reserved];

                  (xv) To the best knowledge of the Originator, all parties
which have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) in compliance with any and all applicable
"doing business" and licensing requirements of the laws of the state wherein the
Mortgaged Property is located;

                  (xvi) The Mortgage Loan is covered by either (i) an American
Land Title Association lender's title insurance policy acceptable to Fannie Mae
or Freddie Mac, issued by a title insurer acceptable to Fannie Mae and Freddie
Mac and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring (subject to the exceptions contained in (x)(a) and
(b) above) the Originator, its successors and assigns as to the first priority
lien of the Mortgage in the original principal amount of the Mortgage Loan or
(ii) an attorney's title opinion, if customary in the related jurisdiction where
the Mortgaged Property is located. Additionally, such lender's title insurance
policy affirmatively insures ingress and egress to and from the Mortgaged
Property, and against encroachments by or upon the Mortgaged Property or any
interest therein. The Originator is the sole insured of such lender's title
insurance policy, and such lender's title insurance policy is in full force and
effect and will be in full force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have been made under such
lender's title insurance policy, and no prior holder of the related Mortgage,
including the Originator, has done, by act or omission, anything which would
impair the coverage of such lender's title insurance policy;

                  (xvii) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration, and the Originator has not waived any default, breach, violation
or event of acceleration;

                  (xviii) There are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such lien)

                                      -11-

<PAGE>

affecting the related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the related Mortgage;

                  (xix) To the best of the Originator's knowledge, all
improvements which were considered in determining the Appraised Value of the
related Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on adjoining
properties encroach upon the Mortgaged Property;

                  (xx) The Mortgage Loan was (i) originated by the Originator or
by a savings and loan association, a savings bank, a commercial bank or similar
banking institution which is supervised and examined by a federal or state
authority, or by a mortgagee approved as such by the Secretary of HUD, (ii)
purchased by Originator in the secondary mortgage market or (iii) acquired by
the Originator directly through loan brokers or correspondents such that (a) the
Mortgage Loan was originated in conformity with the Originator's underwriting
guidelines, (b) the Originator approved the Mortgage Loan prior to funding and
(c) the Originator provided the funds used to originate the Mortgage Loan and
acquired the Mortgage Loan on the date of origination thereof;

                  (xxi) Principal payments on the Mortgage Loan commenced no
more than two months after the proceeds of the Mortgage Loan were disbursed. The
Mortgage Loan bears interest at the Mortgage Rate. The Mortgage Note is payable
on the day of each month set forth in the Mortgage Loan Schedule and in Monthly
Payments which will amortize the Stated Principal Balance of the Mortgage Loan
over its remaining term at the Mortgage Rate. Interest on the Mortgage Loan is
calculated on the basis of a 360-day year consisting of twelve 30-day months.
The Mortgage Note does not permit negative amortization. As of the Cut-off Date,
the construction phase of any Mortgage Loan originated as a construction
permanent loan has expired;

                  (xxii) The origination and collection practices used by the
Originator with respect to each Mortgage Note and Mortgage have been in all
respects legal, proper, prudent and customary in the mortgage origination and
servicing industry. The Mortgage Loan has been serviced by the Master Servicer
(directly or through a subservicer) and any predecessor servicer in accordance
with the terms of the Mortgage Note. With respect to escrow deposits and Escrow
Payments, if any, all such payments are in the possession of, or under the
control of, the Master Servicer and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. No escrow deposits or Escrow Payments or other charges or payments due the
Master Servicer have been capitalized under any Mortgage or the related Mortgage
Note;

                  (xxiii) To the best knowledge of the Originator, the Mortgaged
Property is free of damage and waste and there is no proceeding pending for the
total or partial condemnation thereof;

                  (xxiv) The Mortgage and related Mortgage Note contain
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including, (a) in the
case of a Mortgage designated as a deed of trust, by trustee's sale and (b)
otherwise by judicial foreclosure. There is no homestead or other exemption
available to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage.
The Mortgagor has not notified the Originator, and the Originator has no
knowledge of

                                      -12-

<PAGE>

any relief requested or allowed to the Mortgagor under the Soldiers and Sailors
Civil Relief Act of 1940;

                  (xxv) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (ix) above;

                  (xxvi) The Mortgage File contains, if available, an appraisal
of the related Mortgaged Property made and signed, prior to the approval of the
Mortgage Loan application, by a qualified appraiser, approved by the Originator,
who had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, whose compensation is not affected by the approval
or disapproval of the Mortgage Loan and who met the minimum qualifications of
Fannie Mae and Freddie Mac or those approved by the institution that originated
the related Mortgage Loan;

                  (xxvii) In the event the Mortgage constitutes a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;

                  (xxviii) No Mortgage Loan contains provisions pursuant to
which Monthly Payments are (a) paid or partially paid with funds deposited in
any separate account established by the Originator, the Mortgagor, or anyone on
behalf of the Mortgagor, (b) paid by any source other than the Mortgagor or (c)
contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loans are not graduated payment mortgage loans and the
Mortgage Loans do not have shared appreciation or other contingent interest
features;

                  (xxix) If the Mortgage Loan is a refinanced Mortgage Loan, the
Mortgagor has received all disclosure and rescission materials required by
applicable law with respect to the making of a refinanced Mortgage Loan, and
evidence of such receipt is and will remain in the Mortgage File;

                  (xxx) Except with respect to any Mortgage Loan which was
originated as a construction permanent loan and which has since converted to
permanent financing on the related Mortgaged Property, no Mortgage Loan was made
in connection with facilitating the trade-in or exchange of a Mortgaged
Property. If a Mortgage Loan was originated in connection with the construction
or rehabilitation of a Mortgaged Property, such construction or rehabilitation
has been completed;

                  (xxxi)   [Reserved];

                  (xxxii) To the best knowledge of the Originator, the Mortgaged
Property is lawfully occupied under applicable law; all inspections, licenses
and certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and occupancy of
the same, including but not limited to certificates of occupancy, have been made
or obtained from the appropriate authorities;

                                      -13-

<PAGE>

                  (xxxiii) The Assignment is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;

                  (xxxiv) Any principal advances made to the Mortgagor prior to
the Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having first
lien priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable to
Fannie Mae and Freddie Mac. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;

                  (xxxv) To the best knowledge of the Originator, neither the
Originator nor the affiliate of the Originator has made a mortgage on any
Mortgaged Property other than the Mortgage Loan at origination;

                  (xxxvi) The Mortgaged Property consists of a parcel of real
property with a single family residence erected thereon, or a two to four-family
dwelling, or an individual condominium unit in a low-rise or high-rise
condominium project, or an individual unit in a planned unit development. The
Mortgaged Property is improved with a Residential Dwelling. The Mortgaged
Property does not consist of any of the following property types: (a)
co-operative units, (b) mobile homes except to the extent such structures
satisfy the requirements of 42 United States Code Section 5402(6) and are deemed
to be real property under applicable state law and (c) manufactured homes (other
than as defined in 42 United States Code Section 5402(6)).The Mortgaged Property
is either a fee simple estate or a long-term residential lease. If the Mortgage
Loan is secured by a long-term residential lease, unless otherwise specifically
disclosed in the Mortgage Loan Schedule, (A) the terms of such lease expressly
permit the mortgaging of the leasehold estate, the assignment of the lease
without the lessor's consent (or the lessor's consent has been obtained and such
consent is the Mortgage File) and the acquisition by the holder of the Mortgage
of the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially similar
protection; (B) the terms of such lease do not (x) allow the termination thereof
upon the lessee's default without the holder of the Mortgage being entitled to
receive written notice of, and opportunity to cure, such default or (y) prohibit
the holder of the Mortgage from being insured under the hazard insurance policy
relating to the Mortgaged Property; (C) the original term of such lease is not
less than 15 years; (D) the term of such lease does not terminate earlier than
ten years after the maturity date of the Mortgage Note; and (E) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates for
residential properties is an accepted practice;

                  (xxxix) Each Mortgage Loan with a Loan-to-Value Ratio at
origination in excess of 80% is and will be subject to a primary insurance
policy (unless the current Loan-to-Value Ratio of such Mortgage Loan is not in
excess of 80%), issued by a qualified insurer, which insures that portion of the
Mortgage Loan in excess of the portion of the Value of the Mortgaged Property
required by Fannie Mae. All provisions of such primary insurance policy have
been and are being complied with, such policy is in full force and effect, and
all premiums due thereunder have been paid. Any Mortgage subject to any such
primary insurance policy obligates the Mortgagor thereunder to maintain such
insurance and to pay all premiums and charges in connection therewith. The
Mortgage Rate for the Mortgage Loan does not include any such insurance premium;

                                      -14-

<PAGE>

                  (xl) The Mortgage, and if required by applicable law the
related Mortgage Note, contains a provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the Mortgagee, at the option of the Mortgagee;

                  (xli) To the best knowledge of the Originator, no error,
omission, misrepresentation, negligence, fraud or similar occurrence with
respect to a Mortgage Loan has taken place on the part of any person, including,
without limitation, the Mortgagor, any appraiser, any builder or developer, or
any other party involved in the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan;

                  (xlii) With respect to any assumption, modification,
consolidation or extension agreements, such agreement has been recorded by the
Originator if required under applicable law;

                  (xliii) The Originator has delivered each certificate,
certified by an officer of the Originator, or other evidence of merger or change
of name, signed or stamped by the applicable regulatory authority, if any of the
Mortgage Loans were acquired by the Originator by merger or acquired or
originated by the Originator while conducting business under a name other than
its present name and such certificate or other evidence is not recorded in the
public recording office where the related Mortgage is required to be recorded;

                  (xliv) No Mortgage Loan is (a) subject to the provisions of
the Homeownership and Equity Protection Act of 1994 as amended ("HOEPA"), (b) a
"high cost" mortgage loan, "covered" mortgage loan or "predatory" mortgage loan
or any other comparable term, no matter how defined under any federal, state or
local law, or (c) subject to any comparable federal, state or local statutes or
regulations, including, without limitation, the provisions of the Georgia Fair
Lending Act, the City of Oakland, California Anti-Predatory Lending Ordinance
No. 12361 or any other statute or regulation providing assignee liability to
holders of such mortgage loans;

                  (xlv) No predatory, abusive or deceptive lending practices,
including but not limited to, the extension of credit to a mortgagor without
regard for the mortgagor's ability to repay the Mortgage Loan and the extension
of credit to a mortgagor which has no apparent benefit to the mortgagor, were
employed in connection with the origination of the Mortgage Loan;

                  (xlvi) The Originator (in its capacity as Master Servicer) has
accurately and fully reported its borrower credit files to each of the Credit
Repositories in a timely manner;

                  (xlvii) No Mortgagor was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
extension of credit. No Mortgagor obtained a prepaid single premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan. No proceeds from any Mortgage Loan were used
to purchase single premium credit insurance policies as part of the origination
of, or as a condition to closing, such Mortgage Loan;

                  (xlviii) Except as set forth on the related Mortgage Loan
Schedule, none of the Mortgage Loans are subject to a Prepayment Charge. For any
Mortgage Loan originated prior to

                                      -15-

<PAGE>

October 1, 2002 that is subject to a Prepayment Charge, such Prepayment Charge
does not extend beyond five years after the date of origination. For any
Mortgage Loan originated on or following October 1, 2002 that is subject to a
Prepayment Charge, such Prepayment Charge does not extend beyond three years
after the date of origination. With respect to any Mortgage Loan that contains a
provision permitting imposition of a premium upon a prepayment prior to
maturity: (i) prior to the Mortgage Loan's origination, the Mortgagor agreed to
such premium in exchange for a monetary benefit, including but not limited to a
rate or fee reduction, (ii) prior to the Mortgage Loan's origination, the
Mortgagor was offered the option of obtaining a Mortgage Loan that did not
require payment of such a premium, (iii) the prepayment premium is disclosed to
the Mortgagor in the loan documents pursuant to applicable state and federal
law, and (iv) notwithstanding any state or federal law to the contrary, the
Originator shall not impose such prepayment premium in any instance when the
mortgage debt is accelerated as the result of the Mortgagor's default in making
the loan payments;

                  (xlix) The information set forth in the Prepayment Charge
Schedule is complete, true and correct in all material respects and each
Prepayment Charge is permissible, enforceable and collectable under applicable
federal and state law;

                  (l) All points, fees and charges related to each Mortgage Loan
(whether or not financed, assessed, collected or to be collected in connection
with the origination and servicing of each Mortgage Loan) were disclosed in
writing to the Mortgagor in accordance with applicable state and federal law and
regulation. No Mortgagor was charged "points and fees" (whether or not financed)
in an amount greater than 5% of the principal amount of the related Mortgage
Loan, such 5% limitation is calculated in accordance with Fannie Mae's
anti-predatory lending requirements as set forth in the Fannie Mae Selling
Guide.

                  (li) No Mortgage Loan which is a Cash-out Refinancing was
originated in the State of Texas;

                  (lii) The Mortgage Loan complies with all applicable consumer
credit statutes and regulations, including, without limitation, the respective
Uniform Consumer Credit Code laws in effect in Colorado, Idaho, Indiana, Iowa,
Kansas, Maine, Oklahoma, South Carolina, Utah and Wyoming, has been originated
by a properly licensed entity, and in all other respects, complies with all of
the material requirements of any such applicable laws;

                  (liii) The Mortgage Loan was not prepaid in full prior to the
Closing Date and the Originator has not received notification from a Mortgagor
that a prepayment in full shall be made after the Closing Date;

                  (liv) No Mortgage Loan is secured by cooperative housing,
commercial property or mixed use property;

                  (lv) The Originator has complied with all applicable
anti-money laundering laws and regulations, including without limitation the USA
Patriot Act of 2001 (collectively, the "Anti-Money Laundering Laws"); the
Originator has established an anti-money laundering compliance program as
required by the Anti-Money Laundering Laws, has conducted the requisite

                                      -16-

<PAGE>

due diligence in connection with the origination of each Mortgage Loan for
purposes of the Anti-Money Laundering Laws, including with respect to the
legitimacy of the applicable Mortgagor and the origin of the assets used by the
said Mortgagor to purchase the property in question, and maintains, and will
maintain, sufficient information to identify the applicable Mortgagor for
purposes of the Anti-Money Laundering Laws;

                  (lvi) No Mortgage Loan is secured by real property or secured
by a manufactured home located in the state of Georgia unless (x) such Mortgage
Loan was originated prior to October 1, 2002 or after March 6, 2003, or (y) the
property securing the Mortgage Loan is not, nor will be, occupied by the
Mortgagor as the Mortgagor's principal dwelling. No Mortgage Loan is a "High
Cost Home Loan" as defined in the Georgia Fair Lending Act, as amended (the
"Georgia Act"). Each Mortgage Loan that is a "Home Loan" under the Georgia Act
complies with all applicable provisions of the Georgia Act. No Mortgage Loan
secured by owner occupied real property or an owner occupied manufactured home
located in the State of Georgia was originated (or modified) on or after October
1, 2002 through and including March 6, 2003;

                  (lvii) No Mortgagor was encouraged or required to select a
Mortgage Loan product offered by the Originator which is a higher cost product
designed for less creditworthy borrowers, unless at the time of the Mortgage
Loan's origination, such Mortgagor did not qualify taking into account credit
history and debt to income ratios for a lower cost credit product then offered
by the Originator or any affiliate of the Originator. If, at the time of loan
application, the Mortgagor may have qualified for a for a lower cost credit
product then offered by any mortgage lending affiliate of the Originator, the
Originator referred the Mortgagor's application to such affiliate for
underwriting consideration;

                  (lviii) The methodology used in underwriting the extension of
credit for each Mortgage Loan employs objective mathematical principles which
relate the Mortgagor's income, assets and liabilities to the proposed payment
and such underwriting methodology does not rely on the extent of the Mortgagor's
equity in the collateral as the principal determining factor in approving such
credit extension. Such underwriting methodology confirmed that at the time of
origination (application/approval) the Mortgagor had a reasonable ability to
make timely payments on the Mortgage Loan; and

                  (lix) All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in connection
with the origination and servicing of each Mortgage Loan have been disclosed in
writing to the Mortgagor in accordance with applicable state and federal law and
regulation.

                  SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION
                             AND FOR BREACH OF REPRESENTATION AND WARRANTY.

                  (a) The representations and warranties contained in Section 6
shall not be impaired by any review and examination of loan files or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of the Seller or the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of holders of Mortgage
Pass-Through Certificates

                                      -17-

<PAGE>

evidencing an interest in all or a portion of the Mortgage Loans. With respect
to the representations and warranties contained herein which are made to the
knowledge or the best of knowledge of the Seller or the Originator, or as to
which the Seller or the Originator, as applicable, has no knowledge, if it is
discovered that the substance of any such representation and warranty was
inaccurate as of the date such representation and warranty was made or deemed to
be made, and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan or the interest therein of the Purchaser or the
Purchaser's assignee, transferee or designee, then notwithstanding the lack of
knowledge by the Seller or the Originator, as applicable, with respect to the
substance of such representation and warranty being inaccurate at the time the
representation and warranty was made, the Seller or the Originator, as
applicable, shall take such action described in the following paragraph in
respect of such Mortgage Loan.

                  Upon discovery by the Seller, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Seller as part of any
Mortgage File or of a breach of any of the representations and warranties
contained in Section 5 or Section 6 that materially and adversely affects the
value of any Mortgage Loan, the Purchaser or the Purchaser's assignee,
transferee or designee or the party discovering the breach shall give prompt
written notice to the Originator or the Seller, as applicable. Within ninety
(90) days of its discovery or its receipt of notice of any such missing
documentation which was not transferred to the Purchaser as described above or
materially defective documentation or any breach of a representation and
warranty, the Originator or the Seller, as applicable, promptly shall deliver
such missing document or cure such defect or breach in all material respects, or
in the event the Originator or the Seller, as applicable, cannot deliver such
missing document or such defect or breach cannot be cured, the Originator or the
Seller, as applicable, shall within ninety (90) days of its discovery or receipt
of notice, either (i) repurchase the affected Mortgage Loan at the Purchase
Price or (ii) pursuant to the provisions of the Pooling and Servicing Agreement,
cause the removal of such Mortgage Loan from the Trust Fund and substitute one
or more Qualified Substitute Mortgage Loans. The Originator or the Seller, as
applicable, shall amend the Closing Schedule to reflect the withdrawal of such
Mortgage Loan from the terms of this Agreement and the Pooling and Servicing
Agreement and the addition, if any, of a Qualified Substitute Mortgage Loan. The
Seller shall deliver to the Purchaser such amended Closing Schedule and shall
deliver such other documents as are required by this Agreement or the Pooling
and Servicing Agreement within five (5) days of any such amendment. Any
repurchase pursuant to this Section 7(a) shall be accomplished by remittance to
the Master Servicer for deposit in the Collection Account of the amount of the
Purchase Price in accordance with Section 2.03 of the Pooling and Servicing
Agreement. Any repurchase or substitution required by this Section shall be made
in a manner consistent with Section 2.03 of the Pooling and Servicing Agreement.

                  (b) It is understood and agreed that the obligations of the
Originator or the Seller, as applicable, set forth in this Section 7 to cure,
repurchase or substitute for a defective Mortgage Loan constitute the sole
remedies of the Purchaser against the Originator or the Seller, as applicable,
respecting a missing or defective document or a breach of the representations
and warranties contained in Section 5 or Section 6. It is understood and agreed
that the obligations of the Originator or the Seller, as applicable, set forth
in this Section 7 to repurchase or substitute for a Mortgage Loan as to which a
material document is missing constitute the sole remedies of the Purchaser
against the Originator or the Seller, as applicable, respecting a missing
document.

                                      -18-

<PAGE>

                  SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The
closing of the purchase and sale of the Mortgage Loans shall be held at the New
York City office of Thacher Proffitt & Wood at 10:00 AM New York City time on
the Closing Date.

                  The closing shall be subject to each of the following
conditions:

                  (a)      All of the representations and warranties of the
                           Seller and the Originator under this Agreement shall
                           be true and correct in all material respects as of
                           the date as of which they are made and no event shall
                           have occurred which, with notice or the passage of
                           time, would constitute a default under this
                           Agreement;

                  (b)      The Purchaser shall have received, or the attorneys
                           of the Purchaser shall have received in escrow (to be
                           released from escrow at the time of closing), all
                           Closing Documents as specified in Section 9 of this
                           Agreement, in such forms as are agreed upon and
                           acceptable to the Purchaser, duly executed by all
                           signatories other than the Purchaser as required
                           pursuant to the respective terms thereof;

                  (c)      The Seller shall have delivered or caused to be
                           delivered and released to the Purchaser or to its
                           designee, all documents (including without
                           limitation, the Mortgage Loans) required to be so
                           delivered by the Purchaser; and

                  (d)      All other terms and conditions of this Agreement
                           shall have been complied with.

                  Subject to the foregoing conditions, the Purchaser shall
deliver or cause to be delivered to the Seller on the Closing Date, against
delivery and release by the Seller to the Trustee of all documents required
pursuant to the Pooling and Servicing Agreement, the consideration for the
Mortgage Loans as specified in Section 3 of this Agreement, by delivery to the
Seller of the Mortgage Loan Purchase Price.

                  SECTION 9. CLOSING DOCUMENTS. Without limiting the generality
of Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

                  (a)      An Officers' Certificate of the Seller, dated the
                           Closing Date, upon which the Purchaser and Citigroup
                           Global Markets Inc. (the "Underwriter") may rely, in
                           a form acceptable to the Purchaser;

                  (b)      A Secretary's Certificate of the Seller, dated the
                           Closing Date, upon which the Purchaser and the
                           Underwriter may rely, in a form acceptable to the
                           Purchaser, and attached thereto copies of the
                           certificate of incorporation, by-laws and certificate
                           of good standing of the Seller;

                                      -19-

<PAGE>

                  (c)      An Opinion of Counsel of the Seller, dated the
                           Closing Date and addressed to the Purchaser and the
                           Underwriter, in a form acceptable to the Purchaser;

                  (d)      An Officers' Certificate of the Originator, dated the
                           Closing Date, upon which the Purchaser and the
                           Underwriter may rely, in a form acceptable to the
                           Purchaser;

                  (e)      A Secretary's Certificate of the Originator, dated
                           the Closing Date, upon which the Purchaser and the
                           Underwriter may rely, in a form acceptable to the
                           Purchaser, and attached thereto copies of the
                           certificate of incorporation, by-laws and certificate
                           of good standing of the Originator;

                  (f)      Such opinions of counsel as the Rating Agencies or
                           the Trustee may request in connection with the sale
                           of the Mortgage Loans by the Seller to the Purchaser
                           or the Seller's execution and delivery of, or
                           performance under, this Agreement;

                  (g)      A letter from Deloitte & Touche L.L.P., certified
                           public accountants, dated the date hereof and to the
                           effect that they have performed certain specified
                           procedures as a result of which they determined that
                           certain information of an accounting, financial or
                           statistical nature set forth in the Purchaser's
                           Prospectus Supplement, dated July 28, 2003 under the
                           subheadings "Summary of Prospectus Supplement--The
                           Mortgage Loans," "Risk Factors" (to the extent of
                           information regarding the Mortgage Loans therein) and
                           "The Mortgage Pool" agrees with the records of the
                           Seller;

                  (i)      A letter from PricewaterhouseCoopers, L.L.P.,
                           certified public accountants, dated the date hereof
                           and to the effect that they have performed certain
                           specified procedures as a result of which they
                           determined that certain information of an accounting,
                           financial or statistical nature set forth in the
                           Purchaser's Prospectus Supplement, dated July 28,
                           2003 under the subheading "Pooling and Servicing
                           Agreement--The Master Servicer" agrees with the
                           records of the Master Servicer; and

                  (j)      Such further information, certificates, opinions and
                           documents as the Purchaser or the Underwriter may
                           reasonably request.

                  SECTION 10. COSTS. The Seller shall pay (or shall reimburse
the Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) all necessary and reasonable costs and expenses incurred
directly in delivering this Agreement, the Pooling and Servicing Agreement, the
Certificates, the prospectus, Prospectus Supplement, and private placement
memorandum relating to the Certificates and other related documents, the initial
fees, costs and expenses of the Trustee set forth in an engagement letter
delivered to the Seller by the Trustee, the fees and expenses of the Purchaser's
counsel in connection with the preparation of all documents relating to the
securitization of the Mortgage Loans, the filing fee charged by the Securities
and Exchange Commission for registration of the Certificates, the fees charged
by any rating agency to

                                      -20-

<PAGE>

rate the Certificates and the ongoing expenses of the Rating Agencies. All other
costs and expenses in connection with the transactions contemplated hereunder
shall be borne by the party incurring such expense.

                  SECTION 11. [Reserved].

                  SECTION 12. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.
The sale and delivery on the Closing Date of the Mortgage Loans described on the
Mortgage Loan Schedule in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the date hereof and that an award of
money damages would be insufficient to compensate the Purchaser for the losses
and damages incurred by the Purchaser in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in the
Seller's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligation hereunder, and the Seller agrees that it holds such Mortgage
Loans in custody for the Purchaser, subject to the Purchaser's (i) right, prior
to the Closing Date, to reject any Mortgage Loan to the extent permitted by this
Agreement and (ii) obligation to deliver or cause to be delivered the
consideration for the Mortgage Loans pursuant to Section 8 hereof. Any Mortgage
Loans rejected by the Purchaser shall concurrently therewith be released from
the security interest created hereby. The Seller agrees that, upon acceptance of
the Mortgage Loans by the Purchaser or its designee and delivery of payment to
the Seller, that its security interest in the Mortgage Loans shall be released.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.

                  Notwithstanding the foregoing, if on the Closing Date, each of
the conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Mortgage Loan Purchase
Price, or any such condition shall not have been waived or satisfied and the
Purchaser determines not to pay or cause to be paid the Mortgage Loan Purchase
Price, the Purchaser shall immediately effect the redelivery of the Mortgage
Loans, if delivery to the Purchaser has occurred and the security interest
created by this Section 12 shall be deemed to have been released.

                  SECTION 13. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Purchaser, addressed to the Purchaser at 390 Greenwich Street, 4th Floor,
New York, New York 10013, Attention: Mortgage Finance Group, or such other
address as may hereafter be furnished to the Originator and the Seller in
writing by the Purchaser; if to the Seller, addressed to the Seller at 390
Greenwich Street, 4th Floor, New York, New York 10013, Attention: Mortgage
Finance Group, or such other address as may hereafter be furnished to the
Originator and the Purchaser in writing by the Seller and if to the Originator,
addressed to the Originator at 215 Forrest Street, Hattiesburg, Mississippi
39401-3476, Attention: Morgan McCarty (telecopy number (601) 583-7100), with a
copy to Brenda Goff, 215 Forrest Street, Hattiesburg, Mississippi 39401-

                                      -21-

<PAGE>

3476 (telecopy number (601) 554-2083), or such other address as may hereafter be
furnished to the Purchaser and the Seller in writing by the Originator.

                  SECTION 14. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

                  SECTION 15. AGREEMENT OF PARTIES. The Seller, the Originator
and the Purchaser each agree to execute and deliver such instruments and take
such actions as either of the others may, from time to time, reasonably request
in order to effectuate the purpose and to carry out the terms of this Agreement
and the Pooling and Servicing Agreement.

                  SECTION 16. SURVIVAL. (a) The Seller agrees that the
representations, warranties and agreements made by it herein and in any
certificate or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the Purchaser, notwithstanding any investigation heretofore or
hereafter made by the Purchaser or on its behalf, and that the representations,
warranties and agreements made by the Seller herein or in any such certificate
or other instrument shall survive the delivery of and payment for the Mortgage
Loans and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement or
the Trust Fund.

                  (b) The Originator agrees that the representations, warranties
and agreements made by it herein and in any certificate or other instrument
delivered pursuant hereto shall be deemed to be relied upon by the Seller and
the Purchaser, notwithstanding any investigation heretofore or hereafter made by
the Seller or the Purchaser or on the behalf of either of them, and that the
representations, warranties and agreements made by the Originator herein or in
any such certificate or other instrument shall continue in full force and
effect, notwithstanding subsequent termination of this Agreement, the Pooling
and Servicing Agreement or the Trust Fund.

                  SECTION 17. INDEMNIFICATION. (a) The Originator will indemnify
and hold harmless each of (i) the Purchaser, (ii) the Seller and (iii) each
person, if any, who controls the Purchaser or the Seller within the meaning of
the Securities Act of 1933, as amended (the "1933 Act") (i) through (iii)
collectively, the "Indemnified Party"), against any losses, claims, damages or
liabilities to which such Indemnified Party may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of any material fact contained in the
Prospectus Supplement dated July 28, 2003 (the "Prospectus Supplement"), as
amended or supplemented, relating to the public offering of the Certificates,
representing interests in the Mortgage Loans, or in any other offering document
(the "Private Placement Memorandum") relating to the offering by the

                                      -22-

<PAGE>

Purchaser or an affiliate thereof, of the privately placed Certificates or in
any revision or amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading in each case to the extent and only
to the extent that such untrue statement or alleged untrue statement or omission
or alleged omission relates to information furnished by the Seller specifically
for use in the Prospectus Supplement, under the captions "Summary of Prospectus
Supplement--The Mortgage Loans," "Risk Factors" (to the extent of information
concerning the Mortgage Loans contained therein) and "The Mortgage Pool,"
"Pooling and Servicing Agreement--The Master Servicer" (and substantially
identical information approved by the Originator for inclusion in any Private
Placement Memorandum relating to the Certificates), (b) any representation,
warranty or covenant made by the Originator in this Agreement and (c) any
updated collateral information provided by the Underwriter to a purchaser of the
certificates derived from the data provided by the Originator or in the
Remittance Report or a current collateral tape obtained from the Originator or
an affiliate of the Originator, including the current loan balances of the
Mortgage Loans to the extent such information was inaccurate ((a) through (c)
collectively, the "Originator Information") and will reimburse each such
Indemnified Party for any legal or other expenses reasonably incurred by such
Indemnified Party and each such controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
The Originator's liability under this Section 17 shall be in addition to any
other liability the Originator may otherwise have.

                  (b) The Purchaser agrees to indemnify and hold harmless the
Originator, its officers and its directors, and each person who controls the
Originator within the meaning of the 1933 Act against any and all losses,
claims, damages or liabilities, joint or several, to which they may become
subject under the 1933 Act, or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based in
whole or in part upon any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus Supplement, the Prospectus or Private
Placement Memorandum, or in any revision or amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading, as of the date thereof and as of the Closing Date, except
insofar as such losses, claims, damages or liabilities are caused by any untrue
statement or omission or alleged untrue statement or omission made therein in
reliance upon and in conformity with the Originator Information and will
reimburse the Originator and each such controlling person for any legal or other
expenses reasonably incurred by the Originator and each such controlling person
in connection with investigating or defending any such loss, claim, damage,
liability or action. The Purchaser's liability under this Section 17 shall be in
addition to any other liability the Purchaser may otherwise have.

                  (c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either Section 17(a) or 17(b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing provided,
however, that the failure to notify the indemnifying party shall not relieve the
indemnifying party from any liability which it may have under this section
except to the extent that it has been materially prejudiced by such failure and,
provided further, that the failure to notify the indemnifying party shall

                                      -23-

<PAGE>

not relieve the indemnifying party from any liability which it may have to the
indemnified party otherwise than under this section. The indemnifying party,
upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and any
others the indemnifying party may designate in such proceeding and shall pay the
reasonable fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the reasonable fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel,
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them or (iii) the indemnifying party has
failed to retain counsel as provided in the immediately preceding sentence. It
is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such
indemnified parties (and local counsel). Such firm shall be designated in
writing by the Purchaser and the Seller, in the case of parties indemnified
pursuant to clause 17(a) and by the Originator, in the case of parties
indemnified pursuant to clause 17(b). The indemnifying party may, at its option,
at any time upon written notice to the indemnified party, assume the defense of
any proceeding and may designate counsel satisfactory to the indemnified party
in connection therewith provided that the counsel so designated would have no
actual or potential conflict of interest in connection with such representation.
Unless it shall assume the defense of any proceeding, the indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement (i) does not include a statement as to or
admission of, fault, culpability or a failure to act by or on behalf of any such
indemnified party, and (ii) includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.

                  (d) If the indemnification provided for in this Section 17 is
unavailable to an indemnified party under Section 17(a) or 17(b) hereof or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities, in
such proportion as is appropriate to reflect the relative fault of the
indemnified and indemnifying parties in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
indemnified and indemnifying parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such parties and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

                                      -24-

<PAGE>

                  (e) The Purchaser and the Originator agree that it would not
be just and equitable if contribution pursuant to Section 17 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the considerations referred to in Section 17(d) above. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in this Section 17 shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim, except where the indemnified party is
required to bear such expenses pursuant to this Section 17, which expenses the
indemnifying party shall pay as and when incurred, at the request of the
indemnified party, to the extent that the indemnifying party will be ultimately
obligated to pay such expenses. In the event that any expenses so paid by the
indemnifying party are subsequently determined to not be required to be borne by
the indemnifying party hereunder, the party which received such payment shall
promptly refund the amount so paid to the party which made such payment. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11
(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

                  (f) The indemnity and contribution agreements contained in
this Section 17 shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by the
Purchaser or any person controlling the Purchaser or by or on behalf of the
Originator and their respective directors or officers or any person controlling
the Originator and (iii) acceptance of and payment for any of the Certificates.

                  SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS,
DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (INCLUDING THE CHOICE OF LAW
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND
THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
SHALL APPLY TO THIS AGREEMENT.

                  SECTION 19. MISCELLANEOUS. This Agreement may be executed in
two or more counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans by the
Seller to the Purchaser and not as a pledge of the Mortgage Loans by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Seller, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge

                                      -25-

<PAGE>

of the Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller and (b) (1) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof
shall be deemed to be a grant by the Seller to the Purchaser of a security
interest in all of the Seller's right, title and interest in and to the Mortgage
Loans and all amounts payable to the holders of the Mortgage Loans in accordance
with the terms thereof and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of Mortgage Notes, the related
Mortgages and such other items of property that constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of the New York Uniform Commercial Code; and (4) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Purchaser for the purpose of perfecting
such security interest under applicable law. Any assignment of the interest of
the Purchaser pursuant to Section 4(d) hereof shall also be deemed to be an
assignment of any security interest created hereby. The Seller and the Purchaser
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement and the Pooling and
Servicing Agreement.

                                      -26-

<PAGE>

                  IN WITNESS WHEREOF, the Purchaser, the Seller and the
Originator have caused their names to be signed by their respective officers
thereunto duly authorized as of the date first above written.

                                            SALOMON BROTHERS MORTGAGE
                                            SECURITIES VII, INC.

                                            By: _______________________________
                                            Name:
                                            Title:

                                            CITIGROUP GLOBAL MARKETS
                                            REALTY CORP.

                                            By: _______________________________
                                            Name:
                                            Title:

                                            UNION PLANTERS BANK, NATIONAL
                                            ASSOCIATION

                                            By: _______________________________
                                            Name:
                                            Title:

                                      -27-

<PAGE>

                                    EXHIBIT E
                                    ---------

TO:      Wells Fargo Bank Minnesota, N.A.
         1015 10th Avenue S.E.
         Minneapolis, MN 55414-0031
         Attn: Inventory Control

                  Re:      Pooling and Servicing Agreement dated as of July 1,
                           2003, among Salomon Brothers Mortgage Securities VII,
                           Inc., as Depositor, Union Planters Mortgage, Inc., as
                           Master Servicer, and Wells Fargo Bank Minnesota,
                           National Association, as Trustee
                           -----------------------------------------------------

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

Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

______________             1.       Mortgage Paid in Full

______________             2.       Foreclosure

______________             3.       Substitution

______________             4.       Other Liquidation (Repurchases, etc.)

______________             5.       Nonliquidation

Reason:______________________________________________

Address to which Trustee should
Deliver the Custodian's Mortgage File:

                                    Sandra McAlpin
                                    Assistant Vice President
                                    P.O. Box 18001
                                    Hattiesburg, MS 39404-8001

                                       E-1

<PAGE>

                                              By:_______________________________
                                                       (authorized signer)

Issuer:____________________________
                                    Address:  __________________________________

                                              __________________________________

Date:_____________________________
Trustee

                        WELLS FARGO BANK MINNESOTA, N.A.

Please acknowledge the execution of the above request by your signature and date
below:

_______________________________________
Signature                                            Date

Documents returned to Trustee:

_______________________________________
Trustee                                              Date

                                       E-2

<PAGE>

                                   EXHIBIT F-1
                                   -----------

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                              [Date]
Wells Fargo Bank Minnesota, National Association
9062 Old Annapolis Road
Columbia, Maryland 21045-1951
Attention:  SBMSVII, Series 2003-UP2

                  Re:      Citigroup Mortgage Loan Trust, Series 2003-UP2,
                           Mortgage Pass-Through Certificates, Class ___,
                           representing a ___% Class ___ Percentage Interest
                           -------------------------------------------------

Ladies and Gentlemen:

                  In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferor hereby certifies
as follows:

                  Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of July
1, 2003, among Salomon Brothers Mortgage Securities VII, Inc. as Depositor,
Union Planters Mortgage, Inc. as Master Servicer and Wells Fargo Bank Minnesota,
National Association as Trustee (the "Pooling and Servicing Agreement"),
pursuant to which Pooling and Servicing Agreement the Certificates were issued.

                                      F-1-1

<PAGE>

                  Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.

                                               Very truly yours,

                                               [Transferor]

                                               By:___________________________
                                               Name:
                                               Title:

                                      F-1-2

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                 [Date]

Wells Fargo Bank Minnesota, National Association
9062 Old Annapolis Road
Columbia, Maryland 21045-1951
Attention:  SBMSVII, Series 2003

                  Re:      Citigroup Mortgage Loan Trust, Series 2003-UP2,
                           Mortgage Pass-Through Certificates, Class ___,
                           representing a ___% Percentage Interest
                           -----------------------------------------------

Ladies and Gentlemen:

                  In connection with the purchase from ______________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:

                  1. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
"1933 Act") and has completed either of the forms of certification to that
effect attached hereto as Annex 1 or Annex 2. The Transferee is aware that the
sale to it is being made in reliance on Rule 144A. The Transferee is acquiring
the Certificates for its own account or for the account of a qualified
institutional buyer, and understands that such Certificate may be resold,
pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the 1933 Act.

                  2. The Transferee has been furnished with all information
regarding (a) the Certificates and distributions thereon, (b) the nature,
performance and servicing of the Mortgage Loans, (c) the Pooling and Servicing
Agreement referred to below, and (d) any credit enhancement mechanism associated
with the Certificates, that it has requested.

                  All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of July 1, 2003, among Salomon Brothers Mortgage Securities
VII, Inc. as Depositor, Union Planters Mortgage, Inc. as Master Servicer and
Wells Fargo Bank Minnesota, National Association as Trustee, pursuant to which
the Certificates were issued.

                                               [TRANSFEREE]

                                               By:__________________________
                                               Name:
                                               Title:

                                      F-1-3

<PAGE>

                                                          ANNEX 1 TO EXHIBIT F-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Wells Fargo Bank, Minnesota, Wells Fargo Bank
Minnesota, National Association, as Trustee, with respect to the mortgage
pass-through certificates (the "Certificates") described in the Transferee
Certificate to which this certification relates and to which this certification
is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $______________________1 in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.

         ___ CORPORATION, ETC. The Transferee is a corporation (other than a
bank, savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or any organization described in Section
501(c)(3) of the Internal Revenue Code of 1986.

         ___ BANK. The Transferee (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of Columbia,
the business of which is substantially confined to banking and is supervised by
the State or territorial banking commission or similar official or is a foreign
bank or equivalent institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial statements, a copy of
which is attached hereto.

         ___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined by a State
or Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b) has an
audited net worth of at least

         ___ BROKER-DEALER. The Transferee is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.

--------

1        Transferee must own and/or invest on a discretionary basis at least
         $100,000,000 in securities unless Transferee is a dealer, and, in that
         case, Transferee must own and/or invest on a discretionary basis at
         least $10,000,000 in securities. $25,000,000 as demonstrated in its
         latest annual financial statements, A COPY OF WHICH IS ATTACHED HERETO.

                                      F-1-4

<PAGE>

         ___ INSURANCE COMPANY. The Transferee is an insurance company whose
primary and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is subject to
supervision by the insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.

         ___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the benefit of
its employees.

         ___ ERISA PLAN. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974.

         ___ INVESTMENT ADVISOR. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.

                  3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.

                  5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.

         ___      ___      Will the Transferee be purchasing the Certificates
         Yes      No       only for the Transferee's own account?

                  6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third

                                      F-1-5

<PAGE>

party unless the Transferee has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.

                  7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.

Dated:

                                     ____________________________________
                                     Print Name of Transferee

                                     By:_________________________________
                                     Name:
                                     Title:

                                      F-1-6

<PAGE>

                                                          ANNEX 2 TO EXHIBIT F-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Wells Fargo Bank Minnesota, National
Association, as Trustee, with respect to the mortgage pass- through certificates
(the "Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").

                  2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.

         ____              The Transferee owned $___________________ in
                           securities (other than the excluded securities
                           referred to below) as of the end of the Transferee's
                           most recent fiscal year (such amount being calculated
                           in accordance with Rule 144A).

         ____              The Transferee is part of a Family of Investment
                           Companies which owned in the aggregate
                           $______________ in securities (other than the
                           excluded securities referred to below) as of the end
                           of the Transferee's most recent fiscal year (such
                           amount being calculated in accordance with Rule
                           144A).

                  3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                  4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.

                                      F-1-7

<PAGE>

                  5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.

                  6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated:

                                             ___________________________________
                                             Print Name of Transferee or Advisor

                                             By:________________________________
                                             Name:
                                             Title:

                                             IF AN ADVISER:

                                             ___________________________________
                                             Print Name of Transferee

                                      F-1-8

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER
                    ----------------------------------------

                  The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:

                  1. I am an executive officer of the Purchaser.

                  2. The Purchaser is a "qualified institutional buyer", as
defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933, as
amended.

                  3. As of the date specified below (which is not earlier than
the last day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on a
discretionary basis by the Purchaser was in excess of $100,000,000.

                                             Name of Purchaser

                                             __________________________

                                             By:____________________________
                                             Name:
                                             Title:

Date of this certificate:

Date of information provided in paragraph 3

                                      F-1-9

<PAGE>

                                   EXHIBIT F-2
                                   -----------

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF ___________                )

COUNTY OF _________                 )

                  __________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ______________________ of __________________________
(the "Owner") a corporation duly organized and existing under the laws of
______________, the record owner of Citigroup Mortgage Loan Trust, Series
2003-UP2, Mortgage Pass-Through Certificates, Class R Certificates, (the "Class
R Certificates"), on behalf of whom I make this affidavit and agreement.
Capitalized terms used but not defined herein have the respective meanings
assigned thereto in the Pooling and Servicing Agreement pursuant to which the
Class R Certificates were issued.

                  2. The Owner (i) is and will be a "Permitted Transferee" as of
____________, 20__ and (ii) is acquiring the Class R Certificates for its own
account or for the account of another Owner from which it has received an
affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.

                  3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or collection of tax.

                                      F-2-1

<PAGE>

                  4. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificates if, at any time during the taxable year
of the pass-through entity, a non-Permitted Transferee is the record holder of
an interest in such entity. (For this purpose, a "pass-through entity" includes
a regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

                  5. The Owner is aware that the Trustee will not register the
transfer of any Class R Certificate unless the transferee, or the transferee's
agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.

                  6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.

                  7. The Owner's taxpayer identification number is
_________________.

                  8. The Owner has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Class R Certificates were issued
(in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize
the Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.

                  9. The Owner is not acquiring and will not transfer the Class
R Certificates in order to impede the assessment or collection of any tax.

                  10. The Owner anticipates that it will, so long as it holds
the Class R Certificates, have sufficient assets to pay any taxes owed by the
holder of such Class R Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Class R Certificates that the
Owner intends to pay taxes associated with holding such Class R Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Class R Certificates.

                  11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Class R Certificates.

                  12. The Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.

                  13. The Owner is not acquiring the Class R Certificates with
the intent to transfer the Class R Certificates to any person or entity that
will not have sufficient assets to pay any taxes

                                      F-2-2

<PAGE>

owed by the holder of such Class R Certificates, or that may become insolvent or
subject to a bankruptcy proceeding, for so long as the Class R Certificates
remain outstanding.

                  14. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class R Certificate were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.

                  15. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, deliver to the Trustee an affidavit, which
represents and warrants that it is not transferring the Class R Certificates to
impede the assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient assets to pay any
taxes owed by such transferee as holder of the Class R Certificates; (ii) may
become insolvent or subject to a bankruptcy proceeding for so long as the Class
R Certificates remains outstanding; and (iii) is not a "Permitted Transferee".

                  16. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States may be included in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.

                                      F-2-3

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 20__.

                                                      [OWNER]

                                                      By:_______________________
                                                      Name:
                                                      Title:  [Vice] President

ATTEST:

By:_________________________________
Name:
Title:            [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of __________,
20___.

                                                 ____________________________
                                                          Notary Public

                                                 County of __________________
                                                 State of ___________________

                                                 My Commission expires:

                                      F-2-4

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT
                          ----------------------------

STATE OF NEW YORK       )

COUNTY OF NEW YORK      )

                  __________________________, being duly sworn, deposes,
represents and warrants as follows:

                  1. I am a ____________________ of ____________________________
(the "Owner"), a corporation duly organized and existing under the laws of
______________, on behalf of whom I make this affidavit.

                  2. The Owner is not transferring the Class R Certificates (the
"Residual Certificates") to impede the assessment or collection of any tax.

                  3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

                  4. The Owner understands that the Purchaser has delivered to
the Trustee a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit F-2. The Owner does not know or
believe that any representation contained therein is false.

                  5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.

                  6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.

                                      F-2-5

<PAGE>

                  IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 20__.

                                                   [OWNER]

                                                   By:__________________________
                                                   Name:
                                                   Title:   [Vice] President

ATTEST:

By:______________________________
Name:
Title:   [Assistant] Secretary

                  Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.

                  Subscribed and sworn before me this ____ day of __________,
20___.

                                                 ____________________________
                                                          Notary Public

                                                 County of __________________
                                                 State of ___________________

                                                 My Commission expires:

                                      F-2-6

<PAGE>

                                    EXHIBIT G

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                               [Date]

Wells Fargo Bank Minnesota, National Association
9062 Old Annapolis Road
Columbia, Maryland 21045-1951
Attention:  SBMSVII, Series 2003-UP2

                  Re:      Citigroup Mortgage Loan Trust, Series 2003-UP2,
                           Mortgage Pass-Through Certificates, Class ___
                           -----------------------------------------------

Dear Sirs:

                  _______________________ (the "Transferee") intends to acquire
from _____________________ (the "Transferor") $____________ Initial Certificate
Principal Balance of Citigroup Mortgage Loan Trust, Series 2003-UP2, Mortgage
Pass-Through Certificates, Class [B- 4] [B-5] [B-6] [R] (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of July 1, 2003, among Salomon Brothers Mortgage Securities
VII, Inc. as depositor (the "Depositor"), Union Planters Mortgage, Inc. as
Master Servicer (the "Master Servicer") and Wells Fargo Bank Minnesota, National
Association as trustee (the "Trustee"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in the Pooling and
Servicing Agreement. The Transferee hereby certifies, represents and warrants
to, and covenants with the Depositor, the Trustee and the Master Servicer that:

                  The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R.ss.2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29 C.F.R.ss.
2510.3-101.

                                       G-1

<PAGE>

                                                 Very truly yours,

                                                 _______________________________

                                                 By:____________________________
                                                 Name:
                                                 Title:

                                       G-2

<PAGE>

                                    EXHIBIT H

                           LOSS MITIGATION PROCEDURES

                                       H-1

<PAGE>

                                    EXHIBIT I

                       FORM OF STATEMENT AS TO COMPLIANCE

                 Citigroup Mortgage Loan Trust, Series 2003-UP2
                       Mortgage Pass-Through Certificates

                  I, _____________________, hereby certify that I am a duly
appointed __________________________ of Union Planters Mortgage, Inc. (the
"Master Servicer"), and further certify as follows:

                  1. This certification is being made pursuant to the terms of
the Pooling and Servicing Agreement, dated as of July 1, 2003, (the
"Agreement"), among Salomon Brothers Mortgage Securities VII, Inc., as
depositor, the Master Servicer, as master servicer and Wells Fargo Bank
Minnesota, National Association, as trustee.

                  2. I have reviewed the activities of the Master Servicer
during the preceding year and the Master Servicer's performance under the
Agreement and to the best of my knowledge, based on such review, the Master
Servicer has fulfilled all of its obligations under the Agreement throughout the
year.

                  Capitalized terms not otherwise defined herein have the
meanings set forth in the Agreement.

Dated: _____________

                                       I-1

<PAGE>

                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of _____________.

                                    By: _____________________________
                                    Name:
                                    Title:

                  I, _________________________, a (an) __________________ of the
Master Servicer, hereby certify that _________________ is a duly elected,
qualified, and acting _______________________ of the Master Servicer and that
the signature appearing above is his/her genuine signature.

                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of ______________.

                                     By: _____________________________
                                     Name:
                                     Title:

                                       I-2

<PAGE>

                                   EXHIBIT J-1

        FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K

                  Re:      Citigroup Mortgage Loan Trust, Series 2003-UP2
                           Mortgage Pass-Through Certificates, Series 2003-UP2

                  I, [identify the certifying individual], certify that:

                  l. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution or servicing reports filed in
respect of periods included in the year covered by this annual report, of
Salomon Brothers Mortgage Securities VII, Inc. (the "Registrant");

                  2. Based on my knowledge, the information in these reports,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;

                  3. Based on my knowledge, the distribution information, and
the servicing information required to be provided to the Trustee by the Master
Servicer under the Pooling and Servicing Agreement, is included in these
reports;

                  4. Based on my knowledge and upon the annual compliance
statement included in the report and required to be delivered to the Trustee in
accordance with the terms of the Pooling and Servicing Agreement, and except as
disclosed in the reports, the Master Servicer has fulfilled its obligations
under the Pooling and Servicing Agreement; and

                  5. The reports disclose all significant deficiencies relating
to the Master Servicer's compliance with the minimum servicing standards based
upon the report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar procedure, as set forth in the Pooling and Servicing
Agreement, that is included in these reports.

                  In giving the certifications above, I have reasonably relied
on information provided to me by Wells Fargo Bank Minnesota, National
Association and Union Planters Mortgage, Inc.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated July 1,
2003 (the "Pooling and Servicing Agreement"), among the Registrant as Depositor,
Union Planters Mortgage, Inc. as Master Servicer and Wells Fargo Bank Minnesota,
National Association as trustee.

                                      J-1-1

<PAGE>

                                   SALOMON BROTHERS MORTGAGE SECURITIES
                                   VII, INC.

                                   By:____________________________________
                                   Name:
                                   Title:
                                   Date:

                                      J-1-2

<PAGE>

                                   EXHIBIT J-2

                            FORM CERTIFICATION TO BE
                      PROVIDED TO DEPOSITOR BY THE TRUSTEE

                  Re:      Citigroup Mortgage Loan Trust, Series 2003-UP2
                           Mortgage Pass-Through Certificates, Series 2003-UP2

                  I, [identify the certifying individual], a [title] of Wells
Fargo Bank Minnesota, National Association, as Trustee of the Trust Fund, hereby
certify to Salomon Brothers Mortgage Securities VII, Inc. (the "Depositor"), and
its officers, directors and affiliates, and with the knowledge and intent that
they will rely upon this certification, that:

                  1. I have reviewed the annual report on Form 10-K for the
fiscal year [___], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Depositor relating to the above-referenced trust;

                  2. Based on my knowledge, the information in these
distribution reports prepared by the Trustee, taken as a whole, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the last day of the period
covered by that annual report; and

                  3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Pooling and Servicing Agreement
is included in these reports.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated July 1,
2003 (the "Pooling and Servicing Agreement"), among the Registrant as Depositor,
Union Planters Mortgage, Inc. as master servicer and Wells Fargo Bank Minnesota,
National Association as trustee.

                                         WELLS FARGO BANK MINNESOTA, NATIONAL
                                         ASSOCIATION, as Trustee

                                         By:__________________________________
                                         Name:
                                         Title:
                                         Date:

                                      J-2-1

<PAGE>

                                   EXHIBIT J-3

                            FORM CERTIFICATION TO BE
                  PROVIDED TO DEPOSITOR BY THE MASTER SERVICER

                  Re:      Citigroup Mortgage Loan Trust, Series 2003-UP2
                           Mortgage Pass-Through Certificates, Series 2003-UP2

                  I, [identify the certifying individual], certify that:

                  l. I have reviewed the information required to be provided to
the Trustee by the Master Servicer pursuant to the Pooling and Servicing
Agreement (the "Servicing Information");

                  2. Based on my knowledge, the Servicing Information, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;

                  3. Based on my knowledge, the Servicing Information required
to be provided to the Trustee by the Master Servicer has been provided as
required under the Pooling and Servicing Agreement;

                  4. I am responsible for reviewing the activities performed by
the Master Servicer under the Pooling and Servicing Agreement and based upon my
knowledge and the annual compliance review required under the Pooling and
Servicing Agreement, and except as disclosed by written notice to the Trustee or
in the annual compliance statement or certified public accountant's report
required to be delivered to the Trustee in accordance with the terms of the
Pooling and Servicing Agreement (which has been so delivered to the Trustee),
the Master Servicer has, for the period covered by the Form 10-K Annual Report,
fulfilled its obligations under the Pooling and Servicing Agreement; and

                  5. The Master Servicer has disclosed to its certified public
accountants and the Depositor all significant deficiencies relating to the
Master Servicer's compliance with the minimum servicing standards in accordance
with a review conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar procedure, as set forth in the Pooling
and Servicing Agreement.

                                      J-3-1

<PAGE>

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated July 1,
2003 (the "Pooling and Servicing Agreement"), among the Depositor as depositor,
Union Planters Mortgage, Inc. as master servicer and Wells Fargo Bank Minnesota,
National Association as trustee.

                                               UNION PLANTERS MORTGAGE, INC.

                                               By:____________________________
                                               Name:
                                               Title:
                                               Date:

                                      J-3-2

<PAGE>

                                   Schedule 1

                             MORTGAGE LOAN SCHEDULE

                                [FILED BY PAPER]

                                  Schedule 1-1

<PAGE>

                                   Schedule 2

          MORTGAGE LOANS COVERED BY A PRIMARY MORTGAGE INSURANCE POLICY

                             Available Upon Request

                                  Schedule 2-1

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