Document:

EXHIBIT 4.3

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                            LITTON LOAN SERVICING LP,
                                   as Servicer

                  SALOMON MORTGAGE LOAN TRUST, SERIES 2001-CB4,
                                    as Issuer

                                       and

                         U.S. BANK NATIONAL ASSOCIATION
                              as Indenture Trustee

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

                               SERVICING AGREEMENT
                          Dated as of December 14, 2001

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

            C-BASS Mortgage Loan Asset-Backed Notes, Series 2001-CB4

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                                                 TABLE OF CONTENTS

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                                                     ARTICLE I

                                                    Definitions
         Section 1.01.     Definitions............................................................................1
         Section 1.02.     Other Definitional Provisions..........................................................1

                                                    ARTICLE II

                                          Representations and Warranties
         Section 2.01.     Representations and Warranties Regarding the Servicer..................................3
         Section 2.02.     Representations and Warranties of the Issuer...........................................5
         Section 2.03.     Repurchase or Substitution of Mortgage Loans...........................................5

                                                    ARTICLE III

                                           Administration and Servicing
                                                 of Mortgage Loans
         Section 3.01.     Servicer to Act as Servicer............................................................6
         Section 3.02.     Collection of Certain Mortgage Loan Payments...........................................8
         Section  3.03.    Realization Upon Defaulted Mortgage Loans..............................................8
         Section 3.04.     Collection Account....................................................................10
         Section 3.05.     Permitted Withdrawals from the Collection Account.....................................11
         Section 3.06.     Establishment of Escrow Accounts; Deposits in Escrow Accounts.........................12
         Section 3.07.     Permitted Withdrawals From Escrow Account.............................................13
         Section 3.08.     Payment of Taxes, Insurance and Other Charges; Collections
                           Thereunder............................................................................13
         Section 3.09.     Transfer of Accounts..................................................................14
         Section 3.10.     Maintenance of Hazard Insurance.......................................................15
         Section 3.11.     Maintenance of Mortgage Impairment Insurance Policy...................................15
         Section 3.12.     Fidelity Bond, Errors and Omissions Insurance.........................................16
         Section 3.13.     Title, Management and Disposition of REO Property.....................................16
         Section 3.14.     Due-on-Sale Clauses; Assumption and Substitution Agreements...........................19
         Section 3.15.     Notification of Adjustments...........................................................20
         Section 3.16.     Optional and Mandatory Purchases of Mortgage Loans by Servicer........................20
         Section 3.17.     Indenture Trustee to Cooperate; Release of Files......................................21
         Section 3.18.     Servicing Compensation................................................................22
         Section 3.19.     Annual Statement as to Compliance.....................................................23
         Section 3.20.     Annual Independent Certified Public Accountants' Reports..............................23
         Section 3.21.     Access to Certain Documentation and Information Regarding the
                           Mortgage Loans........................................................................24
         Section 3.22.     Reserved..............................................................................24
         Section 3.23.     Obligations of the Servicer in Respect of Compensating Interest.......................24

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         Section 3.24.     Obligations of the Servicer in Respect of Mortgage Rates and
                           Monthly Payments......................................................................25
         Section 3.25.     Investment of Funds in the Collection Account.........................................25
         Section 3.26.     Liability of Servicer; Indemnification................................................26
         Section 3.27.     Reports of Foreclosure and Abandonment of Mortgaged Properties........................27

                                                     ARTICLE V

                                                   The Servicer
         Section 5.01.     Liability of the Servicer.............................................................30
         Section 5.02.     Merger or Consolidation of, or Assumption of the Obligations of,
                           the Servicer..........................................................................30
         Section 5.03.     Limitation on Liability of the Servicer and Others....................................30
         Section 5.04.     Servicer Not to Resign................................................................31
         Section 5.05.     Delegation of Duties..................................................................31

                                                    ARTICLE VI

                                                      Default
         Section 6.01.     Servicer Events of Termination........................................................34
         Section 6.02.     Indenture Trustee to Act; Appointment of Successor....................................36
         Section 6.03.     Waiver of Defaults....................................................................37
         Section 6.04.     Notification to Noteholders...........................................................37
         Section 6.05.     Survivability of Servicer Liabilities.................................................37

                                                    ARTICLE VII

                                             Miscellaneous Provisions
         Section 7.01.     Amendment.............................................................................38
         Section 7.02.     Governing Law; Jurisdiction...........................................................38
         Section 7.03.     Notices...............................................................................38
         Section 7.04.     Severability of Provisions............................................................39
         Section 7.05.     Article and Section References........................................................39
         Section 7.06.     Notice to the Rating Agencies.........................................................39
         Section 7.07.     Further Assurances....................................................................40
         Section 7.08.     Benefits of Servicing Agreement.......................................................40
         Section 7.09.     Benefits of Servicing Agreement.......................................................40
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EXHIBIT A         Form of Request for Release of Documents
EXHIBIT B         Ineligible Foreclosure Property Loan Schedule

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         This is a Servicing Agreement, dated as of December 14, 2001, among
Litton Loan Servicing LP (the "Servicer"), Salomon Mortgage Loan Trust 2001-CB4
(the "Issuer") and U.S. Bank National Association (the "Indenture Trustee").

                          W I T N E S S E T H  T H A T:
                          ----------------------------

                  WHEREAS, the Servicer is engaged in the business of servicing
mortgage loans;

                  WHEREAS, the Issuer desires to pledge to the Indenture Trustee
certain mortgage loans, identified on Schedule 1 hereto (the "Mortgage Loans")
in connection with the issuance of the C-BASS Mortgage Loan Asset-Backed Notes,
Series 2001-CB4 (the "Notes");

                  WHEREAS, the Issuer desires to contract with the Servicer for
the servicing responsibilities associated with such Mortgage Loans; and;

                  WHEREAS, the Issuer, the Servicer and the Indenture Trustee
desire to execute this Agreement to define each party's rights, duties and
obligations relating to the servicing of the Mortgage Loans;

                  NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:

                                    ARTICLE I

                                   Definitions

                  Section 1.01.     Definitions.

                  For all purposes of this Servicing Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions contained in Appendix A to the Indenture dated
December 14, 2001 (the "Indenture"), between Salomon Mortgage Loan Trust, Series
2001-CB4, as issuer, and U.S. Bank National Association, as indenture trustee,
which is incorporated by reference herein. All other capitalized terms used
herein shall have the meanings specified herein.

                  Section 1.02.     Other Definitional Provisions.

                  (a) All terms defined in this Servicing Agreement shall have
the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.

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                  (b) As used in this Servicing Agreement and in any certificate
or other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing Agreement or in
any such certificate or other document, to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Servicing Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Servicing Agreement or in any such
certificate or other document shall control.

                  (c) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Servicing Agreement shall refer to this
Servicing Agreement as a whole and not to any particular provision of this
Servicing Agreement; Section and Exhibit references contained in this Servicing
Agreement are references to Sections and Exhibits in or to this Servicing
Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."

                  (d) The definitions contained in this Servicing Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as the feminine and neuter genders of such terms.

                  (e) Any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.

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                                   ARTICLE II

                         Representations and Warranties

                  Section 2.01. Representations and Warranties Regarding the
                                Servicer.

                  The Servicer represents and warrants to the Issuer and for the
benefit of the Indenture Trustee, as pledgee of the Mortgage Loans, as of the
Cut-off Date:

                  (i) The Servicer is duly organized, validly existing, and in
         good standing under the laws of the jurisdiction of its formation and
         has all licenses necessary to ensure the enforceability or validity of
         each Mortgage Loan and to carry on its business as now being conducted,
         except for such licenses, certificates and permits the absence of
         which, individually or in the aggregate, would not have a material
         adverse effect on the ability of the Servicer to conduct its business
         as it is presently conducted; the Servicer has the power and authority
         to execute and deliver this Servicing Agreement and to perform in
         accordance herewith; the execution, delivery and performance of this
         Servicing Agreement (including all instruments of transfer to be
         delivered pursuant to this Servicing Agreement) by the Servicer and the
         consummation of the transactions contemplated hereby have been duly and
         validly authorized; this Servicing Agreement evidences the valid,
         binding and enforceable obligation of the Servicer, subject to
         applicable bankruptcy, insolvency, reorganization, moratorium or other
         similar laws affecting the enforcement of creditors' rights generally;
         and all requisite corporate action has been taken by the Servicer to
         make this Servicing Agreement valid and binding upon the Servicer in
         accordance with its terms;

                  (ii) The consummation of the transactions contemplated by this
         Servicing Agreement are in the ordinary course of business of the
         Servicer and will not result in the breach of any term or provision of
         the certificate of formation or the partnership agreement of the
         Servicer or result in the breach of any term or provision of, or
         conflict with or constitute a default under or result in the
         acceleration of any obligation under, any agreement, indenture or loan
         or credit agreement or other instrument to which the Servicer or its
         property is subject, or result in the violation of any law, rule,
         regulation, order, judgment or decree to which the Servicer or its
         property is subject;

                  (iii) The Servicer is an approved seller/servicer of
         conventional mortgage loans for FNMA, and is an FHA Approved Mortgagee
         in good standing to service mortgages, is a VA Approved Lender and has
         not been suspended as a mortgagee or servicer by the FHA or VA and has
         the facilities, procedures and experienced personnel necessary for the
         sound servicing of mortgage loans of the same type as the Mortgage
         Loans. The Servicer is, and shall remain for as long as it is servicing
         the Mortgage Loans hereunder, in good standing as a FHA Approved
         Mortgagee and a VA Approved Lender and to service mortgage loans for
         HUD, FNMA or FHLMC, and no event has occurred, including but not
         limited to a change in insurance coverage, which would make the
         Servicer unable to comply with HUD,

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         FNMA, FHLMC, FHA or VA eligibility requirements or which would require
         notification to any of HUD, FNMA, FHLMC, FHA or VA;

                  (iv) This Servicing Agreement, and all documents and
         instruments contemplated hereby which are executed and delivered by the
         Servicer, constitute and will constitute valid, legal and binding
         obligations of the Servicer, enforceable in accordance with their
         respective terms, except as the enforcement thereof may be limited by
         applicable bankruptcy laws and general principles of equity;

                  (v) The Servicer does not believe, nor does it have any reason
         or cause to believe, that it cannot perform each and every covenant
         contained in this Servicing Agreement;

                  (vi) There is no action, suit, proceeding or investigation
         pending or, to its knowledge, threatened against the Servicer that,
         either individually or in the aggregate, may result in any material
         adverse change in the business, operations, financial condition,
         properties or assets of the Servicer, or in any material impairment of
         the right or ability of the Servicer to carry on its business
         substantially as now conducted, or in any material liability on the
         part of the Servicer, or that would draw into question the validity or
         enforceability of this Servicing Agreement or of any action taken or to
         be taken in connection with the obligations of the Servicer
         contemplated herein, or that would be likely to impair materially the
         ability of the Servicer to perform under the terms of this Servicing
         Agreement;

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

                  (viii) Neither this Servicing Agreement nor any information,
         certificate of an officer, statement furnished in writing or report
         delivered to the Indenture Trustee by the Servicer in connection with
         the transactions contemplated hereby contains or will contain any
         untrue statement of a material fact or omits or will omit to state a
         material fact necessary in order to make the statements contained
         therein, in light of the circumstances under which they were made, not
         misleading.

                  Within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of any representation, warranty
or covenant of the Servicer set forth in this Section 2.01 which materially and
adversely affects the interests of the Noteholders in any Mortgage Loan, the
Servicer shall cure such breach in all material respects.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.01 shall survive delivery
of the Mortgage Files to the Indenture Trustee and shall inure to the benefit of
the Indenture Trustee, the Issuer, the Depositor and the Noteholders. Upon
discovery by any of the Issuer, the Depositor, the Servicer, the Seller or the
Indenture Trustee of a

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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 Noteholders, the party discovering such breach shall give prompt
written notice (but in no event later than two Business Days following such
discovery) to the other parties hereto.

                  Section 2.02. Representations and Warranties of the Issuer.
The Issuer hereby represents and warrants to the Servicer and for the benefit of
the Indenture Trustee, as pledgee of the Mortgage Loans, as of the Cut-off Date:

                  (i) The Issuer is a business trust duly formed and in good
         standing under the laws of the State of Delaware and has full power,
         authority and legal right to execute and deliver this Servicing
         Agreement and to perform its obligations under this Servicing
         Agreement, and has taken all necessary action to authorize the
         execution, delivery and performance by it of this Servicing Agreement;
         and

                  (ii) The execution and delivery by the Issuer of this
         Servicing Agreement and the performance by the Issuer of its
         obligations under this Servicing Agreement will not violate any
         provision of any law or regulation governing the Issuer or any order,
         writ, judgment or decree of any court, arbitrator or governmental
         authority or agency applicable to the Issuer or any of its assets. Such
         execution, delivery, authentication and performance will not conflict
         with, or result in a breach or violation of, any mortgage, deed of
         trust, lease or other agreement or instrument to which the Issuer is
         bound.

                  Section 2.03. Repurchase or Substitution of Mortgage Loans.

                  For any month in which the Seller (pursuant to the terms of
the Mortgage Loan Purchase Agreement) substitutes one or more Eligible
Substitute Mortgage Loans for one or more Defective Mortgage Loans, the Servicer
will determine the amount (the "Substitution Adjustment Amount"), if any, by
which the aggregate Purchase Price of all such Defective Mortgage Loans exceeds
the aggregate, as to each such Eligible Substitute Mortgage Loan, of the
principal balance thereof as of the date of substitution, together with one
month's interest on such principal balance at the applicable Net Mortgage Rate.
On the date of such substitution, the Seller will deliver or cause to be
delivered to the Servicer for deposit in the Collection Account an amount equal
to the Substitution Adjustment Amount, if any, and the Indenture Trustee, upon
receipt of the related Eligible Substitute Mortgage Loan or Loans and
certification by the 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 Seller shall
deliver to it and as shall be necessary to vest therein any Defective Mortgage
Loan released pursuant hereto.

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                                   ARTICLE III

                          Administration and Servicing
                                of Mortgage Loans

                  Section 3.01. Servicer to Act as Servicer.

                  The Servicer, as independent contract servicer, shall service
and administer the Mortgage Loans in accordance with this Servicing Agreement
and the normal and usual standards of practice of prudent mortgage servicers,
and shall have full power and authority, acting alone, to do or cause to be done
any and all things in connection with such servicing and administration which
the Servicer may deem necessary or desirable and consistent with the terms of
this Servicing Agreement including, in the case of FHA Loans and VA Loans,
taking all actions that a mortgagee is permitted or required to take by the FHA
or the VA, as the case may be (the "Servicing Standards").

                  Consistent with the terms of this Servicing Agreement, the
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 in the Servicer's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Noteholders; provided, however, that the Servicer
shall not make future advances and, unless the Mortgagor is in default with
respect to the Mortgage Loan or such default is, in the judgment of the
Servicer, reasonably foreseeable, the Servicer shall not permit any modification
with respect to any Mortgage Loan that would (i) change the Mortgage Rate, defer
or forgive the payment thereof of any principal or interest payments, reduce the
outstanding principal amount (except for actual payments of principal) or extend
the final maturity date with respect to such Mortgage Loan, (ii) in the case of
FHA Loans and VA Loans, affect the FHA Insurance Contract or VA Guaranty
Agreement, as the case may be, with respect to such Mortgage Loan, (iii) affect
adversely the status of any REMIC under the Indenture as a REMIC or (iv) cause
any REMIC under the Indenture to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
Notwithstanding the foregoing, the Servicer shall not permit any modification
with respect to any Group I Mortgage Loan that would both (x) effect an exchange
or reissuance of such Group I Mortgage Loan under Section 1.860G-2(b) of the
Treasury Regulations and (y) cause any REMIC under the Indenture constituting
part of the Trust Estate 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. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and empowered
to execute and deliver on behalf of itself, and the Indenture Trustee, all
instruments of satisfaction or cancellation, or of partial or full release,
discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the Mortgaged Property. The Servicer shall make all
required Servicing Advances and shall service and administer the Mortgage Loans
in accordance with Applicable Regulations, and shall provide to the Mortgagor
any reports required to be provided to them thereby. If reasonably required by
the Servicer, the Indenture Trustee shall furnish the Servicer

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with any powers of attorney and other documents necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties under
this Servicing Agreement.

                  In servicing and administering FHA Loans and VA Loans, the
Servicer shall comply strictly with the National Housing Act, the FHA
Regulations, the Servicemen's Readjustment Act and the VA Regulations and
administrative guidelines issued thereunder or pursuant thereto (insofar as the
same apply to any Mortgage Loan) and, to the extent permitted hereunder,
promptly discharge all of the obligations of the mortgagee thereunder and under
each Mortgage including the timely giving of notices, the essence hereof being
that the full benefits of each FHA Insurance Contract and VA Guaranty Agreement
inure to the Indenture Trustee, on behalf of the Noteholders.

                  In servicing and administering the Mortgage Loans, the
Servicer shall employ procedures including collection procedures and exercise
the same care that it customarily employs and exercises in servicing and
administering mortgage loans for its own account giving due consideration to
accepted mortgage servicing practices of prudent lending institutions, the FHA
Insurance Contracts and the VA Guaranty Agreements, where applicable, and the
Noteholders' reliance on the Servicer. The Servicer shall give prompt notice to
the Indenture Trustee of any action, of which the Servicer has actual knowledge,
to (i) assert a claim against the Trust Estate or (ii) assert jurisdiction over
the Trust Estate.

                  Notwithstanding anything in this Servicing Agreement to the
contrary, in the event of a Principal Prepayment in full of a Mortgage Loan, the
Servicer may not waive any prepayment penalty or portion thereof required by the
terms of the related Mortgage Note unless (i) the Servicer determines that such
waiver would maximize recovery of Liquidation Proceeds for such Mortgage Loan,
taking into account the value of such prepayment penalty, or (ii) (A) the
enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium,
receivership, or other similar law relating to creditors' rights generally or
(2) due to acceleration in connection with a foreclosure or other involuntary
payment, or (B) the enforceability is otherwise limited or prohibited by
applicable law. In the event of a Principal Prepayment in full with respect to
any Mortgage Loan, the Servicer shall deliver to the Indenture Trustee an
Officer's Certificate no later than the third Business Day following the
immediately succeeding Determination Date with a copy to the Class IX Noteholder
and the Class IN Noteholder (in the case of a Group I Mortgage Loan) or the
Class IIX Noteholder and the Class IIN Noteholder (in the case of a Group II
Mortgage Loan). If the Servicer has waived or does not collect all or a portion
of a prepayment penalty relating to a Principal Prepayment in full due to any
action or omission of the Servicer, other than as provided above, the Servicer
shall, within 90 days of the date on which the Principal Prepayment in full is
remitted to the Indenture Trustee, deliver to the Indenture Trustee the amount
of such prepayment penalty (or such portion thereof as had been waived for
deposit) into the Payment Account for payment in accordance with the terms of
the Indenture.

                  With respect to each Mortgage Loan which is the subject of a
Principal Prepayment in full, the Indenture Trustee shall verify whether such
Mortgage Loan was identified on the Mortgage Loan Schedule as being subject to a
prepayment penalty and, if such Mortgage Loan is so identified, whether the
amount of the prepayment penalty remitted by the Servicer (including any

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amounts to be remitted by the Servicer pursuant to the last sentence of the
preceding paragraph), if any, is consistent with the amount of the prepayment
penalty set forth in the Mortgage Loan Schedule. In the event that the Indenture
Trustee determines that a prepayment penalty received with respect to a
Principal Prepayment in full is inconsistent with the prepayment penalty set
forth in the Mortgage Loan Schedule for the related Mortgage Loan and such
inconsistency results in the receipt of a reduced prepayment penalty, the
Indenture Trustee shall provide notice to the Seller of such inconsistency.
Within 90 days of receipt of such notice, the Seller shall remit to the
Indenture Trustee for deposit in the Payment Account an amount equal to the
difference between the amount of the prepayment penalties received by the
Indenture Trustee and the amount of the prepayment penalties determined in
accordance with the description thereof set forth in the Mortgage Loan Schedule
for the related Mortgage Loans.

                  The Indenture Trustee shall prepare and deliver to the Issuer,
the Depositor and the owner of the Class IN Notes, Class IX Notes, Class IIN
Notes and Class IIX Notes, on a monthly basis, a statement setting forth the
amounts due and received with respect to prepayment penalties.

                  Section 3.02. Collection of Certain Mortgage Loan Payments.

                  Continuously from the date hereof until the principal and
interest on all Mortgage Loans are paid in full, the Servicer will diligently
collect all payments due under each Mortgage Loan when the same shall become due
and payable and shall, to the extent such procedures shall be consistent with
this Servicing Agreement and the terms and provisions of any related Primary
Insurance Policy and Applicable Regulations, follow such collection procedures
as it follows with respect to mortgage loans comparable to the Mortgage Loans
and held for its own account. Further, the Servicer will take special care in
ascertaining and estimating annual ground rents, taxes, assessments, water
rates, fire and hazard insurance premiums, mortgage insurance premiums, and all
other charges that, as provided in the Mortgage, will become due and payable to
that end that the installments payable by the Mortgagors will be sufficient to
pay such charges as and when they become due and payable.

                  Section 3.03. Realization Upon Defaulted Mortgage Loans.

                  In the event that any payment due under any Conventional
Mortgage Loan is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period, the
Servicer shall take such action as it shall deem to be in the best interest of
the Noteholders. In the event that any payment due under any FHA Loan becomes
delinquent, the Servicer shall take all such actions as are in the best
interests of the Noteholders and permitted under any applicable FHA loss
mitigation proceedings, including, but not limited to, requesting the FHA to
accept an assignment of such FHA Loan, and, upon the Servicer's determination
that foreclosure is in the best interest of the Noteholders, commencing
foreclosure proceedings. With respect to each VA Loan, the Servicer shall
diligently seek to mitigate losses by utilizing all remedies available in the VA
Regulations. With respect to any defaulted Mortgage Loan, the Servicer shall
have the right

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to review the status of the related forbearance plan and, subject to the second
paragraph of Section 3.01, may modify such forbearance plan.

                  In connection with a foreclosure or other conversion, the
Servicer shall exercise such rights and powers vested in it hereunder and use
the same degree of care and skill in its exercise as prudent mortgage servicers
would exercise or use under the circumstances in the conduct of their own
affairs and consistent with Applicable Regulations and the servicing standards
set forth in the FNMA Guide, including, without limitation, advancing funds for
the payment of taxes and insurance premiums with respect to first lien Mortgage
Loans.

                  Notwithstanding the foregoing provisions of this Section 3.03,
with respect to any Mortgage Loan as to which the 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 Servicer shall not 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
Trust Estate 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 Servicer has also previously determined, based on its
reasonable judgment and a prudent report prepared by a Person who regularly
conducts environmental audits using customary industry standards, that:

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

                  B.       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
                           Noteholders to take such actions with respect to the
                           affected Mortgaged Property.

                  The cost of the environmental audit report contemplated by
this Section 3.03 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.05(b).

                  If the Servicer determines, as described above, that it is in
the best economic interest of the Noteholders 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

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wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Noteholders. The cost of any such compliance, containment,
cleanup or remediation shall be advanced by the Servicer, subject to the
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05(b).

                  Section 3.04. Collection Account.

                  (a) The 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 one or more
Collection Accounts. Each Collection Account shall be an Eligible Account.

                  The Servicer shall deposit in the Collection Account on a
daily basis within two Business Days of receipt, and retain therein, the
following payments and collections received or made by it after the Cut-Off Date
with respect to the Mortgage Loans:

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

                  (ii) all payments on account of interest on the Mortgage Loans
         adjusted to the Mortgage Rate less the Servicing Fee Rate;

                  (iii) all proceeds from a cash liquidation;

                  (iv) all Insurance Proceeds including amounts required to be
         deposited pursuant to Section 3.10, other than proceeds to be held in
         the Escrow Account and applied to the restoration or repair of the
         Mortgaged Property or released to the Mortgagor in accordance with the
         Servicer's normal servicing procedures, the loan documents or
         applicable law;

                  (v) all Condemnation Proceeds affecting any Mortgaged Property
         which are not released to the Mortgagor in accordance with the
         Servicer's normal servicing procedures, the loan documents or
         applicable law; and

                  (vi) any amounts required to be deposited by the Servicer in
         connection with any REO Property pursuant to Section 3.13.

                  Any interest paid on funds deposited in the Collection
Account, subject to Section 3.25, shall accrue to the benefit of the Servicer
and the Servicer shall be entitled to retain and withdraw such interest from the
Collection Account pursuant to Section 3.05(e). The foregoing requirements for
deposit from 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, prepayment charges that are not prepayment
penalties, and assumption fees need not be deposited by the Servicer in the
Collection Account.

                                       10

<PAGE>

                  (b) On behalf of the Trust Estate, the Servicer shall deliver
to the Indenture Trustee in immediately available funds for deposit in the
Payment Account by the close of business New York time on the Servicer
Remittance Date, that portion of the Available Funds (calculated without regard
to the references in the definition thereof to amounts that may be deposited to
the Payment Account from a different source as provided herein) then on deposit
in the Collection Account.

                  (c) Funds in the Collection Account may be invested in
Permitted Investments in accordance with the provisions set forth in Section
3.25. The Servicer shall give notice to the Indenture Trustee of the location of
the Collection Account maintained by it when established and prior to any change
thereof.

                  (d) In the event the Servicer shall deliver to the Indenture
Trustee for deposit in the Payment Account any amount not required to be
deposited therein, it may at any time request that the Indenture Trustee
withdraw such amount from the Payment Account and remit to the Servicer any such
amount, any provision herein to the contrary notwithstanding. In addition, the
Servicer shall deliver to the Indenture Trustee from time to time for deposit,
and the Indenture Trustee shall so deposit, in the Payment Account in respect of
the Mortgage Loans:

                  (i) any Advances, as required pursuant to Section 4.01;

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

                  (iii) any prepayment penalties and premiums or amounts in
         connection with the waiver of such prepayment penalties or premiums, in
         each case required to be deposited pursuant to Section 3.01;

                  (iv) any amounts required to be deposited in the Payment
         Account pursuant to Sections 2.03, 3.04, 3.15, 3.16, 3.23, 3.28 or
         4.01; and

                  (v) any amounts required to be deposited by the Servicer
         pursuant to Section 3.11 in connection with the deductible clause in
         any blanket hazard insurance policy, such deposit being made from the
         Servicer's own funds, without reimbursement therefor.

                  (e) Promptly upon receipt of any Stayed Funds, whether from
the Servicer, a trustee in bankruptcy, or federal bankruptcy court or other
source, the Indenture Trustee shall notify the Servicer of such receipt and
deposit such funds in the Payment Account, subject to withdrawal thereof as
permitted hereunder.

                  Section 3.05. Permitted Withdrawals from the Collection
                                Account.

                  The Servicer may, from time to time, withdraw from the
Collection Account for the following purposes:

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<PAGE>

                  (a) to remit to the Indenture Trustee for deposit in the
Payment Account the amounts required to be so remitted pursuant to Section
3.04(b) or permitted to be so remitted pursuant to the first sentence of Section
3.04(d);

                  (b) to reimburse itself for Advances and Servicing Advances;
provided that the Servicer's right to reimburse itself pursuant to this
subclause (b) is limited to amounts received on the related Mortgage Loan which
represent payments of (i) principal and/or interest respecting which any such
Advance was made or (ii) Condemnation Proceeds, Insurance Proceeds or
Liquidation Proceeds respecting which any such Servicing Advance was made;

                  (c) to reimburse itself for unreimbursed Servicing Advances,
any unpaid Servicing Fees and for unreimbursed Advances to the extent that such
amounts are deemed to be Nonrecoverable Advances, and to reimburse itself for
such amounts to the extent that such amounts are nonrecoverable from the
disposition of REO Property pursuant to Section 3.03 or Section 3.13 hereof;

                  (d) to reimburse itself for any amounts paid pursuant to
Section 3.03 (and not otherwise previously reimbursed);

                  (e) to pay to itself as servicing compensation (a) any
interest earned on funds in the Collection Account (all such interest to be
withdrawn monthly not later than each Servicer Remittance Date) and (b) the
Servicing Fee from that portion of any payment or recovery as to interest to a
particular Mortgage Loan to the extent not retained pursuant to Section
3.04(a)(ii);

                  (f) to reimburse itself for any amounts paid pursuant to
Section 6.03 (and not otherwise previously reimbursed); and

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

                  The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the 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.

                  Section 3.06. Establishment of Escrow Accounts; Deposits in
                                Escrow Accounts.

                  The 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 one or more Escrow Accounts, in the form of time deposit
or demand accounts. A copy of any letter agreement related to such accounts
shall be furnished to the Indenture Trustee upon request. The Escrow Account
shall be an Eligible Account.

                                       12

<PAGE>

                  The Servicer shall deposit in the Escrow Account or Accounts
on a daily basis within two Business Days of receipt, 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 Servicing Agreement, and (ii) all Insurance Proceeds which are to be
applied to the restoration or repair of any Mortgaged Property. The Servicer
shall make withdrawals therefrom only to effect such payments as are required
under this Servicing Agreement, and for such other purposes as shall be set
forth in, or in accordance with, Section 3.07. The Servicer shall be entitled to
retain any interest paid on funds deposited in the Escrow Account by the
depository institution other than interest on escrowed funds required by law to
be paid to the Mortgagor and, to the extent required by the related Mortgage
Loan or Applicable Regulations, the Servicer shall pay interest on escrowed
funds to the Mortgagor notwithstanding that the Escrow Account is non-interest
bearing or that interest paid thereon is insufficient for such purposes.

                  Section 3.07. Permitted Withdrawals From Escrow Account.

                  Withdrawals from the Escrow Account may be made by the
Servicer (i) to effect timely payments of ground rents, taxes, assessments,
water rates, fire, flood and hazard insurance premiums, Primary Insurance Policy
premiums, if applicable, and comparable items, (ii) to reimburse the Servicer
for any Servicing Advance made by the 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
Servicing Agreement, (v) for application to restoration or repair of the
Mortgaged Property, (vi) to pay to the 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 Servicing Agreement,
(viii) to transfer to the Collection Account any insurance proceeds, or (ix) in
the case of FHA Loans and VA Loans, for transfer to the Collection Account, fire
and hazard insurance proceeds and Escrow Payments with respect to any Mortgage
Loan where the FHA or VA, as the case may be, has directed application of such
funds as a credit against the proceeds of the FHA Insurance Contract or the VA
Guaranty Agreement. As part of its servicing duties, the 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.

                  In the event the Servicer shall deposit in the Escrow Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Escrow Account, any provision herein to the contrary
notwithstanding.

                  Section 3.08. Payment of Taxes, Insurance and Other Charges;
                                Collections Thereunder.

                                       13

<PAGE>

                  With respect to each first lien Mortgage Loan, the 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 Primary Insurance Policy premiums and
fire, flood and hazard insurance coverage and 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 Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage or Applicable Regulations.
To the extent that the Mortgage does not provide for Escrow Payments, the
Servicer shall determine that any such payments are made by the Mortgagor at the
time they first become due. The 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.

                  The Servicer, on behalf of the Indenture Trustee, as
mortgagee, will maintain in full force and effect (to the extent a Mortgage Loan
has a Primary Insurance Policy) a Primary Insurance Policy issued by a Qualified
Insurer with respect to each Mortgage Loan for which such coverage is required.
Such coverage will be maintained until the Combined Loan-to-Value Ratio of the
related Mortgage Loan is reduced to 80% or less. The Servicer will not cancel or
refuse to renew any Primary Insurance Policy in effect on the Closing Date that
is required to be kept in force under this Servicing Agreement unless a
replacement Primary Insurance Policy for such canceled or non-renewed policy is
obtained from and maintained with a Qualified Insurer. The Servicer shall not
take any action which would result in non-coverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of the Servicer, would
have been covered thereunder. In connection with any assumption or substitution
agreement entered into or to be entered into pursuant to Section 3.14, the
Servicer shall promptly notify the insurer under the related Primary Insurance
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of such policy and shall take all actions which may be required
by such insurer as a condition to the continuation of coverage under the Primary
Insurance Policy. If such Primary Insurance Policy is terminated as a result of
such assumption or substitution of liability, the Servicer shall obtain a
replacement Primary Insurance Policy as provided above.

                  In connection with its activities as servicer, the Servicer
agrees to prepare and present, on behalf of itself and the Indenture Trustee,
claims to the insurer under any Primary Insurance Policy in a timely fashion in
accordance with the terms of such policies and, in this regard, to take such
action as shall be necessary to permit recovery under any Primary Insurance
Policy respecting a defaulted Mortgage Loan. Pursuant to Section 3.04, any
amounts collected by the Servicer under any Primary Insurance Policy shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.05.

                  Section 3.09. Transfer of Accounts.

                                       14

<PAGE>

                  The Servicer may transfer the Collection Account or the Escrow
Account to a different depository institution from time to time. Upon such
transfer, the Servicer shall deliver to the Indenture Trustee, the Issuer and
the Depositor, a certification or letter agreement, as the case may be, as
required pursuant to Sections 3.04 and 3.06.

                  Section 3.10. Maintenance of Hazard Insurance.

                  The Servicer shall cause to be maintained for each Mortgage
Loan fire and hazard insurance with extended coverage as is customary in the
area where the Mortgaged Property is located in an amount which is at least
equal to the lesser of (i) the amount necessary to fully compensate for any
damage or loss to the improvements which are a part of such property on a
replacement cost basis, (ii) the Principal Balance of the Mortgage Loan, in each
case in an amount not less than such amount as is necessary to prevent the
Mortgagor and/or the Mortgagee from becoming a co-insurer or (iii) the amount
required under applicable HUD/FHA regulations. If the Mortgaged Property is in
an area identified in the Federal Register by the Flood Emergency Management
Agency as having special flood hazards and flood insurance has been made
available, the Servicer will cause to be maintained a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable insurance carrier, in an amount
representing coverage not less than the least of (i) the Principal Balance of
the Mortgage Loan, (ii) the maximum insurable value of the improvements securing
such Mortgage Loan or (iii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall
also maintain on the REO Property for the benefit of the Noteholders, (x) fire
and hazard insurance with extended coverage in an amount which is at least equal
to the replacement cost of the improvements which are a part of such property,
(y) public liability insurance and, (z) to the extent required and available
under the Flood Disaster Protection Act of 1973, as amended, flood insurance in
an amount as provided above. Any amounts collected by the Servicer under any
such policies other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or REO Property,
or released to the Mortgagor in accordance with the Servicer's normal servicing
procedures, shall be deposited in the Collection Account, subject to withdrawal
pursuant to Section 3.05. It is understood and agreed that no earthquake or
other additional insurance is required to be maintained by the Servicer or the
Mortgagor or maintained on property acquired in respect of the Mortgage Loan,
other than pursuant to such Applicable Regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall be
endorsed with standard mortgagee clauses with loss payable to the Servicer and
shall provide for at least thirty days prior written notice of any cancellation,
reduction in the amount of or material change in coverage to the Servicer. The
Servicer shall not interfere with the Mortgagor's freedom of choice in selecting
either his insurance carrier or agent; provided, however, that the Servicer
shall not accept any such insurance policies from insurance companies unless
such companies currently reflect a general policy rating of B:VI or better in
Best's Key Rating Guide and are licensed to do business in the state wherein the
property subject to the policy is located.

                  Section 3.11. Maintenance of Mortgage Impairment Insurance
                                Policy.

                                       15

<PAGE>

                  In the event that the Servicer shall obtain and maintain a
blanket policy issued by an insurer that has a general policy rating of B:VI or
better in Best's Key Rating Guide insuring against hazard losses on all of the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 3.10 and otherwise complies
with all other requirements of Section 3.10, it shall conclusively be deemed to
have satisfied its obligations as set forth in Section 3.10, it being understood
and agreed that such policy may contain a deductible clause, in which case the
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with Section 3.10,
and there shall have been a loss which would have been covered by such policy,
deliver to the Indenture Trustee for deposit in the Payment Account the amount
not otherwise payable under the blanket policy because of such deductible
clause, which amount shall not be reimbursable to the Servicer from the Trust
Estate. In connection with its activities as servicer of the Mortgage Loans, the
Servicer agrees to prepare and present, on behalf of the Indenture Trustee,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy. Upon request of the Indenture Trustee, the Servicer shall
cause to be delivered to the Indenture Trustee a certified true copy of such
policy and a statement from the insurer thereunder that such policy shall in no
event be terminated or materially modified without thirty days prior written
notice to the Indenture Trustee.

                  Section 3.12. Fidelity Bond, Errors and Omissions Insurance.

                  The Servicer shall maintain, at its own expense, a blanket
fidelity bond (the "Fidelity Bond") and an errors and omissions insurance
policy, with broad coverage with financially responsible companies on all
officers, employees or other persons acting in any capacity with regard to the
Mortgage Loans to handle funds, money, documents and papers relating to the
Mortgage Loans. The Fidelity Bond and errors and omissions insurance shall be in
the form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Servicer against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such persons. Such Fidelity Bond shall also
protect and insure the Servicer against losses in connection with the failure to
maintain any insurance policies required pursuant to this Servicing Agreement
and the release or satisfaction of a Mortgage Loan without having obtained
payment in full of the indebtedness secured thereby. No provision of this
Section 3.12 requiring the Fidelity Bond and errors and omissions insurance
shall diminish or relieve the Servicer from its duties and obligations as set
forth in this Servicing Agreement. The minimum coverage under any such bond and
insurance policy shall be at least equal to the corresponding amounts required
by FNMA in the FNMA MBS Selling and Servicing Guide or by FHLMC in the FHLMC
Servicer's Guide. Upon request of the Indenture Trustee, the Servicer shall
cause to be delivered to the Indenture Trustee a certified true copy of the
Fidelity Bond and errors and omissions insurance policy and a statement from the
surety and the insurer that such Fidelity Bond and errors and omissions
insurance policy shall in no event be terminated or materially modified without
thirty days' prior written notice to the Indenture Trustee.

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

                  (a) In the event that title to a Mortgaged Property is
acquired in foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be taken (pursuant to a limited power

                                       16

<PAGE>

of attorney to be provided by the Indenture Trustee to the Servicer) in the name
of the Indenture Trustee, on behalf of the Noteholders, or in the event the
Indenture Trustee is not authorized or permitted to hold title to real property
in the state where the REO Property is located, or would be adversely affected
under the "doing business" or tax laws of such state by so holding title, the
deed or certificate of sale shall be taken in the name of such Person or Persons
as shall be consistent with an Opinion of Counsel obtained by the Servicer from
an attorney duly licensed to practice law in the state where the REO Property is
located. Any Person or Persons holding such title other than the Indenture
Trustee shall acknowledge in writing that such title is being held as nominee
for the benefit of the Indenture Trustee.

                  (b) In the event that the Trust Estate acquires any REO
Property as aforesaid or otherwise in connection with a default or imminent
default on a Group I Mortgage Loan, the Servicer shall dispose of such REO
Property before the end of the third calendar year beginning after the year of
its acquisition by the Trust Estate for purposes of Section 860G(a)(8) of the
Code or, at the expense of the Trust Estate, request from the Internal Revenue
Service, more than 60 days before the day on which the above-mentioned grace
period would otherwise expire, an extension of the above-mentioned grace period,
unless the Servicer obtains an Opinion of Counsel, addressed to the Servicer and
the Indenture Trustee, to the effect that the holding by the Trust Estate of
such REO Property subsequent to such period will not: (i) result in the
imposition of any tax on "prohibited transactions" as defined in Section 860F of
the Code; or (ii) cause any REMIC constituting any part of the Trust Estate to
fail to qualify as a REMIC at any time that any Notes are outstanding, in which
case the Trust Estate may continue to hold such REO Property (subject to any
conditions contained in such Opinion of Counsel). The Servicer shall be entitled
to be reimbursed from the Collection Account for any costs incurred in obtaining
such Opinion of Counsel, as provided in Section 3.05.

                  Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding any other provisions of this
Servicing Agreement, no REO Property related to a Group I Mortgage Loan acquired
by the Trust Estate shall be rented (or allowed to continue to be rented) or
otherwise used by or on behalf of the Trust Estate in such a manner or pursuant
to any terms that would: (i) cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code; or
(ii) subject any REMIC constituting part of the Trust Estate to the imposition
of any federal income taxes on the income earned from such REO Property,
including any taxes imposed by reason of Sections 860F or 860G(c) of the Code,
unless the Servicer has agreed to indemnify and hold harmless the Trust Estate
with respect to the imposition of any such taxes.

                  The Servicer shall manage, conserve, protect and operate each
REO Property related to a Group I Mortgage Loan for the Noteholders and the
Trust Estate solely for the purpose of its prompt disposition and sale in a
manner which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or result in the
receipt by the related 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.
The Servicer shall cause each REO Property to be inspected promptly upon the
acquisition of title thereto and shall cause each REO Property to be

                                       17

<PAGE>

inspected at least annually thereafter. The Servicer shall make or cause to be
made a written report of each such inspection. Such reports shall be retained in
the Mortgage Servicing File and copies thereof shall be forwarded by the
Servicer to the Indenture Trustee upon request. The Servicer shall attempt to
sell the same (and may temporarily rent the same) on such terms and conditions
as the Servicer deems to be in the best interest of the Noteholders and the
Trust Estate.

                  With respect to each REO Property, the Servicer shall
segregate and hold all funds collected and received in connection with the
operation of the REO Property separate and apart from its own funds or general
assets and shall establish and maintain with respect to all REO Property an REO
Account or Accounts in the form of a time deposit or demand account, unless an
Opinion of Counsel is obtained by the Servicer to the effect that the
classification as a REMIC for federal income tax purposes of the arrangement
under which the Mortgage Loans and the REO Property is held will not be
adversely affected by holding such funds in another manner. Such REO Account
shall be established with the Servicer or with a commercial bank, a mutual
savings bank or a savings and loan association. The creation of any REO Account
shall be evidenced by a letter agreement, in the case of an account held by a
depository. In either case, an original of such certification or letter
agreement shall be furnished to the Indenture Trustee upon request.

                  The Servicer shall deposit or cause to be deposited, on a
daily basis, within two Business Days of receipt, in each REO Account, all
revenues received with respect to the related REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of the REO Property, including the cost of maintaining any hazard insurance
pursuant to Section 3.10 hereof and the fees of any managing agent acting on
behalf of the Servicer. The Servicer shall have the right to earn interest, if
any, on funds deposited in such REO Account. On or before each Determination
Date, the Servicer shall withdraw from each REO Account and deposit into the
Collection Account the net receipts from the REO Property on deposit in the REO
Account and retain any interest.

                  The Servicer shall furnish to the Indenture Trustee, on each
Servicer Remittance Date, an operating statement for each REO Property covering
the operation of each REO Property for the previous month. Such operating
statement shall be accompanied by such other information as the Indenture
Trustee shall reasonably request.

                  The Servicer shall use its best efforts to dispose of the REO
Property as promptly as is practically consistent with protecting the
Noteholders' interests.

                  Each REO Disposition shall be carried out by the Servicer at
such price and upon such terms and conditions as the Servicer deems to be in the
best interest of the Noteholders. If as of the date title to any REO Property
was acquired by the Servicer there were outstanding unreimbursed Servicing
Advances with respect to the REO Property, the Servicer, upon an REO Disposition
of such REO Property, shall be entitled to reimbursement for any related
unreimbursed Servicing Advances from proceeds received in connection with such
REO Disposition. The proceeds from the REO Disposition, net of any payment to
the Servicer as provided above, shall be deposited in the REO Account and shall
be transferred to the Collection Account on the

                                       18

<PAGE>

Determination Date in the month following receipt thereof for payment on the
succeeding Servicer Remittance Date in accordance with the Indenture.

                  Any REO Disposition of an REO Property related to a Group I
Mortgage Loan shall be for cash only (unless changes in the REMIC Provisions
made subsequent to the Startup Day allow a sale for other consideration and an
Opinion of Counsel is obtained by the Servicer to the effect that such sale
shall not cause any REMIC constituting part of the Trust Estate to fail to
qualify as a REMIC).

                  The Servicer shall not complete, or allow to be completed, a
foreclosure or accept a deed in lieu of a foreclosure with respect to any
Ineligible Foreclosure Property Loan if it would cause the Indenture Trustee to
hold REO Property from Ineligible Foreclosure Property Loans with an aggregate
value in excess of 0.75% of the aggregate outstanding Principal Balance of the
Mortgage Loans as of the end of the prior Collection Period. If the Value of REO
Property from Ineligible Foreclosure Property Loans equals or exceeds 1% of the
outstanding Principal Balance of the Mortgage Loans as of the end of any
Collection Period, the Seller shall purchase at the Purchase Price on or prior
to the related Payment Date sufficient REO Property from Ineligible Foreclosure
Property Loans to cause the Indenture Trustee to hold REO Property from
Ineligible Foreclosure Property Loans with a Value of less than 1% of the
outstanding Principal Balance of the Mortgage Loans and such proceeds shall be
treated as received during the related Prepayment Period. If the Seller shall
fail to purchase any REO Property as described in the preceding sentences, the
Servicer shall sell such REO Property as soon as reasonably practicable and in a
commercially reasonable manner. For purposes of this paragraph the "Value" of
REO Property from a Ineligible Foreclosure Property Loan shall be treated as
equal to the Principal Balance of the related Ineligible Foreclosure Property
Loan plus interest that had accrued on such Mortgage Loan as of the date of
acquisition of the REO Property by the Indenture Trustee. The Indenture Trustee
shall reconvey a Mortgage Loan so purchased in the same manner and under the
same terms as specified in Section 2.03.

                  Section 3.14. Due-on-Sale Clauses; Assumption and Substitution
                                Agreements.

                  When a Mortgaged Property has been or is about to be conveyed
by the Mortgagor, the Servicer shall, to the extent it has knowledge of such
conveyance or prospective conveyance, exercise its rights to accelerate the
maturity of the related Mortgage Loan under any "due-on-sale" clause contained
in the related Mortgage or Mortgage Note; provided, however, that the Servicer
shall not exercise any such right if the "due-on-sale" clause, in the reasonable
belief of the Servicer, is not enforceable under applicable law. An Opinion of
Counsel at the expense of the Servicer (which expense shall constitute a
Servicing Advance) delivered to the Indenture Trustee, the Issuer and the
Depositor to the foregoing effect shall conclusively establish the
reasonableness of such belief. In such event, the Servicer shall make reasonable
efforts to enter into an assumption and modification agreement with the Person
to whom such property has been or is about to be conveyed, pursuant to which
such Person becomes liable under the Mortgage Note and, unless prohibited by
applicable law or the Mortgage, the Mortgagor remains liable thereon. If the
foregoing is not permitted under applicable law, the Servicer is authorized to
enter into a substitution of liability agreement with such Person, pursuant to
which the original Mortgagor is released from liability and

                                       19

<PAGE>

such Person is substituted as Mortgagor and becomes liable under the Note. The
Mortgage Loan, as assumed, shall conform in all respects to the requirements,
representations and warranties of this Servicing Agreement. The Servicer shall
notify the Indenture Trustee that any such assumption or substitution agreement
has been completed by forwarding to the Indenture Trustee (or the Custodian, as
the case may be) the original copy of such assumption or substitution agreement
(indicating the Mortgage File to which it relates) which copy shall be added by
the Indenture Trustee (or the Custodian, as the case may be) to the related
Mortgage File and which 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. The Servicer shall be responsible for recording any
such assumption or substitution agreements. In connection with any such
assumption or substitution agreement, the Monthly Payment on the related
Mortgage Loan shall not be changed but shall remain as in effect immediately
prior to the assumption or substitution, the stated maturity or outstanding
principal amount of such Mortgage Loan shall not be changed nor shall any
required monthly payments of principal or interest be deferred or forgiven. Any
fee collected by the Servicer for consenting to any such conveyance or entering
into an assumption or substitution agreement shall be retained by or paid to the
Servicer as additional servicing compensation.

                  Notwithstanding the foregoing paragraph or any other provision
of this Servicing Agreement, the 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 any assumption which the
Servicer may be restricted by law from preventing, for any reason whatsoever.

                  Section 3.15. Notification of Adjustments.

                  On each Adjustment Date, the Servicer shall make Mortgage Rate
adjustments for each adjustable-rate Mortgage Loan in compliance with the
requirements of the related Mortgage and Mortgage Note and Applicable
Regulations. The Servicer shall execute and deliver the notices required by each
Mortgage and Mortgage Note and Applicable Regulations regarding Mortgage Rate
adjustments. The Servicer also shall provide timely notification to the
Indenture Trustee of all applicable data and information regarding such Mortgage
Rate adjustments and the Servicer's methods of implementing such Mortgage Rate
adjustments. Upon the discovery by the Servicer or the Indenture Trustee that
the Servicer has failed to adjust or has incorrectly adjusted a Mortgage Rate or
a Monthly Payment pursuant to the terms of the related Mortgage Note and
Mortgage, the Servicer shall deliver to the Indenture Trustee for deposit in the
Payment Account from its own funds the amount of any interest loss caused
thereby without reimbursement therefor; provided, however, the Servicer shall be
held harmless with respect to any Mortgage Rate adjustments made by any servicer
prior to the Servicer.

                  Section 3.16. Optional and Mandatory Purchases of Mortgage
                                Loans by Servicer.

                  On or after March 31, 2002, as to any Mortgage Loan which is
Delinquent in payment by 120 days or more or any REO Property, the Servicer may,
at its option, purchase such Mortgage Loan from the Issuer at the Purchase Price
for such Mortgage Loan provided that the Servicer may exercise the purchase
right during the period commencing on the first day of the calendar quarter

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<PAGE>

succeeding the calendar quarter in which the Initial Delinquency Date occurred
and ending on the last Business Day of such calendar quarter. The "Initial
Delinquency Date" of a Mortgage Loan shall mean the date on which the Mortgage
Loan first became 120 days Delinquent or, in the event such loan is a
Re-Performing Mortgage Loan which is Delinquent 120 days or more as of the
Cut-Off Date, the date on which the such Re-Performing Mortgage Loan first
becomes an additional 30 days or ore Delinquent.

                  If the Servicer does not exercise the purchase right with
respect to a Mortgage Loan during the period specified in the preceding
paragraph, such Mortgage Loan shall thereafter again become eligible for
purchase pursuant to the preceding paragraph only after the Mortgage Loan ceases
to be 120 days or more Delinquent and thereafter becomes 120 day Delinquent
again.

                  Prior to repurchase pursuant to this Section 3.16, the
Servicer shall be required to continue to make monthly advances pursuant to
Section 4.01. The Servicer (or an affiliate of the Servicer) shall not use any
procedure in selecting Mortgage Loans to be repurchased which is materially
adverse to the interests of the Noteholders. Any such repurchase of a Mortgage
Loan or REO Property pursuant to this Section 3.16 shall be accomplished by
delivery to the Indenture Trustee for deposit in the Payment Account of the
amount of the purchase price. The Indenture Trustee shall immediately effectuate
the conveyance of such delinquent Mortgage Loan or REO Property to the Servicer
(or an affiliate of the Servicer) to the extent necessary, including the prompt
delivery of all documentation to the Servicer (or an affiliate of the Servicer).
Furthermore, the Servicer may, at its option, write-off a second lien or third
lien Mortgage Loan which becomes 180 or more days delinquent.

                  Notwithstanding anything in this Section 3.16, the rights of
the Seller to repurchase a Mortgage Loan or REO Property which becomes 120 or
more days delinquent shall be set forth in the Mortgage Loan Purchase Agreement.

                  Section 3.17. Indenture Trustee to Cooperate; Release of
                                Files.

                  (a) Upon the payment in full of any Mortgage Loan (including
any liquidation of such Mortgage Loan through foreclosure or otherwise, or the
receipt by the Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes), the Servicer shall deliver to the
Indenture Trustee (or the Custodian as the case may be) two executed copies of a
completed "Request for Release" substantially in the form of Exhibit A. Upon
receipt of such Request for Release of Documents, the Indenture Trustee (or the
Custodian as the case may be) shall promptly release the related Mortgage File,
in trust to (i) the Servicer, or (ii) such other party identified in the related
Request for Release. Upon any such payment in full, or the receipt of such
notification that such funds have been placed in escrow, the Servicer shall
direct the Indenture Trustee in writing to execute an instrument of satisfaction
(or assignment of Mortgage without recourse) regarding the Mortgaged Property
relating to such Mortgage, which instrument of satisfaction or assignment, as
the case may be, shall be delivered to the Person or Persons entitled thereto
against receipt therefor of payment in full, it being understood and agreed that
no expense incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall

                                       21

<PAGE>

be chargeable to the Collection Account. In lieu of executing any such
satisfaction or assignment, as the case may be, the Servicer may prepare and
submit to the Indenture Trustee a satisfaction (or assignment without recourse,
if requested by the Person or Persons entitled thereto) in form for execution by
the Indenture Trustee with all requisite information completed by the Servicer;
in such event, the Indenture Trustee shall execute and acknowledge such
satisfaction or assignment, as the case may be, and deliver the same with the
related Mortgage File, as aforesaid.

                  (b) From time to time and as appropriate in the servicing of
any Mortgage Loan, including, without limitation, foreclosure or other
comparable conversion of a Mortgage Loan or collection under any insurance
policy relating to a Mortgage Loan, the Indenture Trustee shall (except in the
case of the payment or liquidation pursuant to which the related Mortgage File
is released to an escrow agent or an employee, agent or attorney of the
Indenture Trustee), upon written request of the Servicer and delivery to the
Indenture Trustee (or the Custodian, as the case may be) of two executed copies
of a "Request for Release" substantially in the form of Exhibit A signed by a
Servicing Officer, release the related Mortgage File to the Servicer and shall
execute such documents as shall be necessary to the prosecution of any such
proceedings, including, without limitation, an assignment without recourse of
the related Mortgage to the Servicer. Such receipt shall obligate the Servicer
to return the Mortgage File to the Indenture Trustee (or the Custodian, as the
case may be) when the need therefor by the Servicer no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a Request for
Release evidencing such liquidation, the receipt shall be released by the
Indenture Trustee (or the Custodian, as the case may be) to the Servicer.

                  (c) Subject to Section 3.01, the Servicer shall have the right
to accept applications of Mortgagors for consent to (i) partial releases of
Mortgages, (ii) alterations, (iii) removal, demolition or division of properties
subject to Mortgages and (iv) second mortgage subordination agreements. No
application for approval shall be considered by the Servicer unless: (w) it has
received an Opinion of Counsel, addressed to the Indenture Trustee (which
opinion shall not be an expense of the Indenture Trustee or the Trust Estate)
that such sale, disposition, substitution, acquisition or contribution will not
affect adversely the status of any REMIC constituting part of the Trust Estate
as a REMIC or cause any REMIC constituting part of the Trust Estate to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to the
REMIC Provisions; (x) the provisions of the related Mortgage Note and Mortgage
have been complied with; (y) the Combined Loan-to-Value Ratio and debt-to-income
ratio after any release does not exceed the maximum Combined Loan-to-Value Ratio
and debt-to-income ratio established in accordance with the underwriting
standards of the Mortgage Loans; and (z) the lien priority of the related
Mortgage is not affected. Upon receipt by the Indenture Trustee of a Servicing
Officer's certificate setting forth the action proposed to be taken in respect
of a particular Mortgage Loan and certifying that the criteria set forth in the
immediately preceding sentence have been satisfied, the Indenture Trustee shall
execute and deliver to the Servicer the consent or partial release so requested
by the Servicer. A proposed form of consent or partial release, as the case may
be, shall accompany any Servicing Officer's certificate delivered by the
Servicer pursuant to this paragraph.

                  Section 3.18. Servicing Compensation.

                                       22

<PAGE>

                  As compensation for its activities hereunder, the Servicer
shall be entitled to retain the amount of the Servicing Fee with respect to each
Mortgage Loan (including REO Properties). The Servicer shall be entitled to
retain additional servicing compensation in the form of release fees, bad check
charges, assumption fees, modification or extension fees, late payment charges,
or any other service-related fees, Insurance Proceeds and Liquidation Proceeds
not required to be deposited in the Collection Account and similar items, to the
extent collected from Mortgagors. Additionally, the Servicer shall be entitled
to the Special Servicing Fee, payable in accordance with the Indenture.

                  Section 3.19. Annual Statement as to Compliance.

                  (a) The Servicer, at its own expense, will deliver to the
Indenture Trustee, the Issuer and the Depositor, not later than 90 days
following the end of the fiscal year of the Servicer which as of the Startup Day
ends on the last day of December, commencing in 2001, a Servicing Officer's
certificate stating, as to each signer thereof, that (i) a review of the
activities of the Servicer during such preceding fiscal year (or such shorter
period in the case of the first such report) and of performance under this
Servicing Agreement has been made under such officers' supervision, and (ii) to
the best of such officers' knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Servicing Agreement for such year, or,
if there has been a default in the fulfillment of all such obligations,
specifying each such default known to such officers and the nature and status
thereof including the steps being taken by the Servicer to remedy such default.

                  (b) Delivery of such reports, information and documents to the
Indenture Trustee is for informational purposes only and the Indenture Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable, from information contained therein, including
the Servicer's compliance with any of its covenants hereunder (as to which the
Indenture Trustee is entitled to rely exclusively on Officers' Certificates).

                  Section 3.20. Annual Independent Certified Public Accountants'
                                Reports.

                  (a) Not later than 90 days following the end of each fiscal
year of the Servicer commencing in 2001, the Servicer, at its expense, shall
cause a nationally recognized firm of independent certified public accountants
to furnish to the Indenture Trustee, the Issuer and the Depositor a report
stating that (i) it has obtained a letter of representation regarding certain
matters from the management of the Servicer which includes an assertion that the
Servicer has complied with certain minimum residential mortgage loan servicing
standards, identified in either the Uniform Single Attestation Program for
Mortgage Bankers established by the Mortgage Bankers Association of America or
the Audit Program for Mortgages serviced by FHLMC, 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. Immediately upon
receipt of such report, the Servicer shall furnish a copy of such report to the
Indenture Trustee, the Issuer, the Depositor and each Rating Agency. Copies of
such statement shall be provided by the

                                       23

<PAGE>

Indenture Trustee to any Noteholder upon request at the Servicer's expense,
provided that such statement is delivered by the Servicer to the Indenture
Trustee.

                  (b) Delivery of such reports, information and documents to the
Indenture Trustee is for informational purposes only and the Indenture Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable, from information contained therein, including
the Servicer's compliance with any of its covenants hereunder (as to which the
Indenture Trustee is entitled to rely exclusively on Officers' Certificates).

                  (c) The Indenture Trustee shall, on behalf of the Trust
Estate, prepare, sign and file with the Securities and Exchange Commission any
and all reports, statements and information respecting the Trust Estate which
the Depositor determines are required to be filed with the Securities and
Exchange Commission pursuant to Sections 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, each such report, statement and information to
be filed on or prior to the required filing date for such report, statement or
information. Upon the request of the Indenture Trustee, each of the Servicer and
the Issuer shall cooperate with the Indenture Trustee in the preparation of any
such report and shall provide to the Indenture Trustee in a timely manner all
such information or documentation as the Indenture Trustee may reasonably
request in connection with the performance of its duties and obligations under
this Section.

                  Section 3.21. Access to Certain Documentation and Information
                                Regarding the Mortgage Loans.

                  The Servicer shall provide to the Indenture Trustee,
Noteholders that are federally insured savings and loan associations, the Office
of Thrift Supervision, the FDIC and the supervisory agents and examiners of each
of the foregoing (which, in the case of supervisory agents and examiners, may be
required by applicable state and federal regulations) access to the
documentation regarding the Mortgage Loans, such access being afforded without
charge but only upon reasonable request and during normal business hours at the
offices of the Servicer designated by it.

                  Section 3.22. Reserved.

                  Section 3.23. Obligations of the Servicer in Respect of
                                Compensating Interest.

                  Not later than the close of business on each Servicer
Remittance Date, the Servicer shall deliver to the Indenture Trustee for deposit
in the Payment Account an amount ("Compensating Interest") equal to the lesser
of (A) the aggregate of the Prepayment Interest Shortfalls on the Actuarial
Mortgage Loans for the related Payment Date resulting from Principal Prepayments
on the Actuarial Mortgage Loans during the related Prepayment Period and (B) 50%
of its aggregate Servicing Fee received in the related Collection Period. The
Servicer shall apply Compensating Interest to offset any Prepayment Interest
Shortfalls on the Actuarial Mortgage Loans. The Servicer shall not have the
right to reimbursement for any amounts remitted to the Indenture Trustee in
respect of Compensating Interest. Such amounts so remitted shall be included in
the Available Funds and distributed therewith on the next Payment Date. The
Servicer shall not be obligated to

                                       24

<PAGE>

pay Compensating Interest with respect to Prepayment Interest Shortfalls on
Simple Interest Mortgage Loans or Relief Act Interest Shortfalls.

                  Section 3.24. Obligations of the Servicer in Respect of
                                Mortgage Rates and Monthly Payments.

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

                  Section 3.25. Investment of Funds in the Collection Account.

                  (a) The Servicer may direct any depository institution
maintaining the Collection Account (for purposes of this Section 3.25, 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 Servicing Agreement, if a Person other than the
Indenture 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
Servicing Agreement, if the Indenture 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
Servicer (in its capacity as such) or in the name of a nominee of the Indenture
Trustee. The Indenture Trustee shall be entitled to sole possession (except with
respect to investment direction of funds held in the Collection Account) over
each such investment and the income thereon, and any certificate or other
instrument evidencing any such investment shall be delivered directly to the
Indenture Trustee or its agent, together with any document of transfer necessary
to transfer title to such investment to the Indenture 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 Indenture Trustee shall at the
direction of the Servicer:

                  (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 Indenture Trustee that
         such Permitted Investment would not

                                       25

<PAGE>

         constitute a Permitted Investment in respect of funds thereafter on
         deposit in the Investment Account.

                  (b) All income and gain realized from the investment of funds
in the Collection Account shall be for the benefit of the Servicer. The Servicer
shall deposit in the Collection Account 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) Except as otherwise expressly provided in this Servicing
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 Indenture Trustee may and, subject to
Section 8.01 and Section 8.02(a)(v), upon the request of the Holders of Notes
representing more than 50% of the Voting Rights allocated to any Class of Notes,
shall take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
proceedings.

                  The Indenture Trustee shall not in any way be held liable by
reason of any insufficiency in any Account held by the Indenture Trustee
resulting from any investment loss on any Permitted Investment included therein
(except to the extent that the Indenture Trustee is the obligor and has
defaulted thereon).

                  Section 3.26. Liability of Servicer; Indemnification.

                  (a) Subject to clause (b) below and Section 5.03, the Servicer
(except the Indenture Trustee if it is required to succeed the Servicer
hereunder) indemnifies and holds the Indenture Trustee, the Issuer, the Owner
Trustee, the Seller, the Depositor and each Noteholder harmless against any and
all claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Indenture Trustee, the Issuer, the Depositor and any Noteholder may sustain in
any way related to the failure of the Servicer to perform its duties and service
the Mortgage Loans in compliance with the Servicing Standards. The Servicer
shall immediately notify the Indenture Trustee, the Issuer, the Owner Trustee,
the Depositor and each Noteholder if a claim is made that may result in such
claims, losses, penalties, fines, forfeitures, legal fees or related costs,
judgments, or any other costs, fees and expenses, and the Servicer shall assume
(with the consent of the Indenture Trustee) the defense of any such claim and
pay all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Servicer, the Indenture Trustee, the Issuer, the Depositor and/or
Noteholder in respect of such claim. The provisions of this Section 3.26 shall
survive the termination of this Servicing Agreement and the payment of the
outstanding Note.

                  (b) Neither the Issuer nor the Servicer, nor any of the
directors, officers, employees or agents of the Issuer or the Servicer shall be
under any liability to the Trust Estate or the Noteholders for any action taken,
or for refraining from the taking of any action, in good faith pursuant to this
Servicing Agreement, or for errors in judgment; provided, however, that this

                                       26

<PAGE>

provision shall not protect the Issuer or the Servicer or any such Person
against any breach of warranties or representations made herein, or against any
specific liability imposed on the Servicer for a breach of the Servicing
Standard, or against any liability which would otherwise be imposed by reason of
its respective willful misfeasance, bad faith, fraud or negligence in the
performance of its duties or by reasons of negligent disregard of its respective
obligations or duties hereunder.

                  The Issuer, the Servicer and any director, officer, employee
or agent of the Issuer or the Servicer, may rely in good faith on any document
of any kind which, PRIMA FACIE, is properly executed and submitted by any
appropriate Person with respect to any matters arising hereunder. The Issuer,
the Servicer, and any director, officer, employee or agent of the Issuer or the
Servicer shall be indemnified and held harmless by the Trust Estate against any
loss, liability or expense incurred in connection with any legal action relating
to this Servicing Agreement or the Notes, other than any loss, liability or
expense incurred in connection with any legal action incurred by reason of its
respective misfeasance, bad faith, fraud or negligence, a breach of a
representation or warranty hereunder or (in the case of the Servicer) a breach
of the Servicing Standard in the performance of its respective duties or by
reason of negligent disregard of its respective obligations or duties hereunder.
Neither the Issuer nor the 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 Servicing Agreement and in its opinion does not
expose it to any expense or liability; provided, however, that the Issuer or the
Servicer may in its discretion undertake any action related to its obligations
hereunder which it may deem necessary or desirable with respect to this
Servicing Agreement and the rights and duties of the parties hereto and the
interests of the Noteholders hereunder.

                  Section 3.27. Reports of Foreclosure and Abandonment of
                                Mortgaged Properties.

                  On or before the last day of February of each year beginning
in 2002, the Servicer shall file the reports of foreclosure and abandonment of
any Mortgaged Property required by Section 6050J of the Code with the Internal
Revenue Service and provide an Officer's Certificate certifying its compliance
with this Section 3.27 to the Indenture Trustee. The reports from the Servicer
shall be in form and substance sufficient to meet the reporting requirements
imposed by such Section 6050J.

                                       27

<PAGE>

                                   ARTICLE IV

                                    Advances

                  Section 4.01. Remittance Reports; Advances.

                  (a) On the second Business Day following each Determination
Date but in no event less than four Business Days prior to the related Payment
Date, the Servicer shall deliver to the Indenture Trustee by telecopy (or by
such other means as the Servicer and the Indenture Trustee may agree from time
to time) a Remittance Report with respect to the related Payment Date. On the
same date, the Servicer shall forward to the Indenture Trustee by overnight mail
a computer readable magnetic tape or diskette or in such other medium as may be
agreed between the Servicer and the Indenture Trustee containing the information
set forth in such Remittance Report with respect to the related Payment Date.
Not later than the close of business New York time on the fourth Business Day
prior to the related Payment Date, the Servicer shall deliver or cause to be
delivered to the Indenture Trustee in addition to the information provided on
the Remittance Report, such other information reasonably available to it with
respect to the Mortgage Loans as the Indenture Trustee may reasonably request or
order in order for the Indenture Trustee to perform the calculations necessary
to make the payments contemplated by the Indenture and to prepare the statements
to Noteholders contemplated by the Indenture. The Indenture Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Servicer.

                  (b) The amount of Advances to be made by the Servicer for any
Payment Date shall equal, subject to Section 4.01(d), the aggregate amount of
Monthly Payments (net of the related Servicing Fee), due during the related
Collection Period in respect of the first lien Actuarial Mortgage Loans, which
Monthly Payments were delinquent on a contractual basis as of the close of
business on the related Determination Date. For purposes of the preceding
sentence, the Monthly Payment on each Balloon Mortgage Loan with a delinquent
Balloon Payment is equal to the assumed monthly payment that would have been due
on the related Due Date based on the original principal amortization schedule
for the such Balloon Mortgage Loan. The Servicer shall not be obligated to make
any Advance with respect to Simple Interest Mortgage Loans, REO Properties or
second or third lien Actuarial Mortgage Loans.

                  On or before the close of business New York time on the
Servicer Remittance Date, the Servicer shall remit in immediately available
funds to the Indenture Trustee for deposit in the Payment Account an amount
equal to the aggregate amount of Advances, if any, to be made in respect of the
Mortgage Loans for the related Payment Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
payment (in which case it will cause to be made an appropriate entry in the
records of the Collection Account that amounts held for future payment have
been, as permitted by this Section 4.01, used by the 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 Servicer with respect
to the Mortgage Loans. Any amounts held for future payment and so used shall be
appropriately reflected in the Servicer's records and replaced by the Servicer
by deposit in the Collection Account on or before any future Servicer Remittance

                                       28

<PAGE>

Date to the extent that the Available Funds for the related Payment Date
(determined without regard to Advances to be made on the Servicer Remittance
Date) shall be less than the total amount that would be distributed to the
Classes of Noteholders pursuant to the Indenture on such Payment Date if such
amounts held for future payments had not been so used to make Advances. The
Indenture Trustee will provide notice to the Servicer by telecopy by the close
of business on any Servicer Remittance Date in the event that the amount
remitted by the Servicer to the Indenture Trustee on such date is less than the
Advances required to be made by the Servicer for the related Payment Date, as
set forth in the related Remittance Report.

                  (c) The obligation of the Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Servicing Agreement but
subject to (d) below, and, with respect to any Mortgage Loan, shall continue
until the earlier of such time as the Trust Estate acquires title to the related
Mortgaged Property or such Mortgage Loan is paid in full by the Mortgagor or
disposed of by the Trust Estate, or until the recovery of all Liquidation
Proceeds thereon.

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

                                       29

<PAGE>

                                    ARTICLE V

                                  The Servicer

                  Section 5.01. Liability of the Servicer.

                  The Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically imposed upon and undertaken by the
Servicer herein.

                  Section 5.02. Merger or Consolidation of, or Assumption of the
                                Obligations of, the Servicer.

                  Any entity into which the Servicer may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any corporation
succeeding to the business of the Servicer, shall be the successor of the
Servicer 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 Servicer shall satisfy
all the requirements of Section 6.02 with respect to the qualifications of a
successor Servicer.

                  Section 5.03. Limitation on Liability of the Servicer and
                                Others.

                  Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the Issuer,
the Indenture Trustee, the Trust Estate or the Noteholders for any action taken
or for refraining from the taking of any action by the Servicer in good faith
pursuant to this Servicing Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Servicer or any such Person
against any liability which would otherwise be imposed by reason of its willful
misfeasance, bad faith or gross negligence in the performance of duties of the
Servicer or by reason of its reckless disregard of its obligations and duties of
the Servicer hereunder; provided, further, that this provision shall not be
construed to entitle the Servicer to indemnity in the event that amounts
advanced by the Servicer to retire any senior lien exceed Liquidation Proceeds
(in excess of related liquidation expenses) realized with respect to the related
Mortgage Loan. The Servicer and any director or officer or employee or agent of
the Servicer may rely in good faith on any document of any kind PRIMA FACIE
properly executed and submitted by any Person respecting any matters arising
hereunder. The Servicer and any director or officer or employee or agent of the
Servicer shall be indemnified from the Trust Estate and held harmless against
any loss, liability or expense incurred in connection with any legal action
relating to this Servicing Agreement or the Notes, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Servicing Agreement) and any loss, liability or expense
incurred by reason of its willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Servicer may undertake any such action
which it may deem necessary or desirable in respect of this Servicing Agreement,
and the rights and duties of the parties hereto and the interests of the
Noteholders

                                       30

<PAGE>

hereunder. In such event, the reasonable legal expenses and costs of such action
and any liability resulting therefrom shall be expenses, costs and liabilities
of the Trust Estate and the Servicer shall be entitled to be reimbursed therefor
only pursuant to Section 3.05. The Servicer's right to indemnity or
reimbursement pursuant to this Section shall survive any resignation or
termination of the Servicer pursuant to Section 5.04 or 6.01 with respect to any
losses, expenses, costs or liabilities arising prior to such resignation or
termination (or arising from events that occurred prior to such resignation or
termination). This paragraph shall apply to the Servicer solely in its capacity
as Servicer hereunder and in no other capacities.

                  Section 5.04. Servicer Not to Resign.

                  Subject to the provisions of Section 6.01 and Section 5.02,
the Servicer shall not resign from the obligations and duties hereby imposed on
it except (i) upon determination that the performance of its obligations or
duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities carried
on by it or its subsidiaries or Affiliates, the other activities of the Servicer
so causing such a conflict being of a type and nature carried on by the Servicer
or its subsidiaries or Affiliates at the date of this Servicing Agreement or
(ii) upon satisfaction of the following conditions: (a) the Servicer has
proposed a successor servicer to the Indenture Trustee and the Issuer in writing
and such proposed successor servicer is reasonably acceptable to the Indenture
Trustee and the Issuer; and (b) each Rating Agency shall have delivered a letter
to the Indenture Trustee and the Issuer prior to the appointment of the
successor servicer stating that the proposed appointment of such successor
servicer as Servicer hereunder will not result in the reduction or withdrawal of
the then current rating of the Notes or the ratings that are in effect;
provided, however, that no such resignation by the Servicer shall become
effective until such successor servicer or, in the case of (i) above, the
Indenture Trustee shall have assumed the Servicer's responsibilities and
obligations hereunder or the Indenture Trustee shall have designated a successor
servicer in accordance with Section 6.02. Any such resignation shall not relieve
the Servicer of responsibility for any of the obligations specified in Sections
6.01 and 6.02 as obligations that survive the resignation or termination of the
Servicer. Any such determination permitting the resignation of the Servicer
pursuant to clause (i) above shall be evidenced by an Opinion of Counsel to such
effect delivered to the Indenture Trustee and the Issuer. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Indenture Trustee.

                  Section 5.05. Delegation of Duties.

                  In the ordinary course of business, the Servicer at any time
may delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Servicer of its liabilities and responsibilities with respect to such duties
and shall not constitute a resignation within the meaning of Section 5.04. The
Servicer shall provide the Indenture Trustee, the Issuer and the Rating Agencies
with 60 days prior written notice prior to the delegation of any of its duties
to any Person other than any of the Servicer's Affiliates or their respective
successors and assigns.

                                       31

<PAGE>

                  The Indenture Trustee and the Issuer hereby specifically (i)
consent to the pledge and assignment by the Servicer of all the Servicer's
right, title and interest in, to and under this Servicing Agreement to the
Servicing Rights Pledgee, for the benefit of certain lenders, and (ii) provided
that no Servicer Event of Termination exists, agree that upon delivery to the
Indenture Trustee and the Issuer by the Servicing Rights Pledgee of a letter
signed by the Servicer whereunder the Servicer shall resign as Servicer under
this Servicing Agreement, the Indenture Trustee shall appoint the Servicing
Rights Pledgee or its designee as successor Servicer, provided that at the time
of such appointment, the Servicing Rights Pledgee or such designee meets the
requirements of a successor Servicer pursuant to Section 6.02(a) and agrees to
be subject to the terms of this Servicing Agreement. If, pursuant to any
provision hereof, the duties of the Servicer are transferred to a successor, the
entire amount of the Servicing Fee and other compensation payable to the
Servicer pursuant hereto shall thereafter be payable to such successor.

                  Section 5.06. Optional Redemption of the Notes.

                  (a) The Servicer (or an affiliate of the Servicer) may, at its
option, purchase the Mortgage Loans in either Loan Group and redeem the Notes
and the IX/N Interest or IIX/N Interest, as applicable, on the next succeeding
Payment Date upon which the aggregate current Principal Balance of the Group I
Mortgage Loans or Group II Mortgage Loans, as applicable, is less than 10% of
the aggregate Principal Balance of the Group I Mortgage Loans or Group II
Mortgage Loans, as applicable, as of the Cut-Off Date by purchasing all of the
outstanding (i) Mortgage Loans in the related Loan Group at a price equal to the
sum of the outstanding Principal Balance of the related Mortgage Loans and
except to the extent previously advanced by the Servicer, accrued and unpaid
interest thereon at the weighted average of the Mortgage Rates through the end
of the Collection Period preceding the final Payment Date plus unreimbursed
Servicing Advances, Advances and any unpaid Servicing Fees and Special Servicing
Fees allocable to such Mortgage Loans and (ii) REO Properties in the related
Loan Group at a price equal to their fair market value as determined in good
faith by the Servicer (the "Redemption Price").

                  The Redemption Price for the Group II Notes must be sufficient
to equal the sum of (a) 100% of the aggregate Note Balance then outstanding, (b)
the aggregate of any Group II Allocated Realized Loss Amount on the Group II
Notes remaining unpaid immediately prior to such Payment Date, (c) the aggregate
of the Accrued Note Interest on the Group II Notes for such Payment Date, (d)
the aggregate of any LIBOR Carryover Amounts on the Group II Notes for such
Payment Date and (e) the aggregate of any Interest Carry Forward Amounts for
such Payment Date. The Servicer will not be permitted to terminate the Mortgage
Loans in Loan Group II unless the redemption price set forth in the previous
sentence is paid to the Holders of the Group II Notes.

                  In connection with any such purchase pursuant to the preceding
paragraph, the Servicer shall deliver to the Indenture Trustee for deposit in
the Payment Account all amounts then on deposit in the Collection Account (less
amounts permitted to be withdrawn by the Servicer pursuant to Section 3.07),
which deposit shall be deemed to have occurred immediately following such
purchase.

                                       32

<PAGE>

                  Any such purchase shall be accomplished by delivery to the
Indenture Trustee for deposit into the Payment Account as part of Available
Funds on the Determination Date before such Payment Date of the Termination
Price.

                  (b) In order to exercise the foregoing options, the Servicer
shall, not less than 15 days prior to the proposed Payment Date on which such
redemption is to be made, deposit the aggregate redemption price specified in
(a) above or the aggregate redemption price for the partial redemption specified
in (b) above with the Indenture Trustee (and the Indenture Trustee shall deposit
such funds in the Payment Account), and shall provide written notice of its
exercise of such option to the Indenture Trustee and the Owner Trustee.

                                       33

<PAGE>

                                   ARTICLE VI

                                     Default

                  Section 6.01. Servicer Events of Termination.

                  (a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:

                  (i) (A) The failure by the Servicer to make any Advance; or
         (B) any other failure by the Servicer to deposit in the Collection
         Account or Payment Account any deposit required to be made under the
         terms of this Servicing Agreement which continues unremedied for a
         period of one Business Day after the date upon which written notice of
         such failure shall have been given to the Servicer by the Indenture
         Trustee or by any Holder of a Note evidencing at least 25% of the
         Voting Rights; or

                  (ii) The failure by the Servicer to make any required
         Servicing Advance which failure continues unremedied for a period of 30
         days, or the failure by the Servicer duly to observe or perform, in any
         material respect, any other covenants, obligations or agreements of the
         Servicer as set forth in this Servicing Agreement, which failure
         continues unremedied for a period of 30 days, after the date (A) on
         which written notice of such failure, requiring the same to be
         remedied, shall have been given to the Servicer by the Indenture
         Trustee or by any Holder of a Note evidencing at least 25% of the
         Voting Rights or (B) actual knowledge of such failure by a Servicing
         Officer of the Servicer; or

                  (iii) The entry against the Servicer of a decree or order by a
         court or agency or supervisory authority having jurisdiction in the
         premises for the appointment of a trustee, conservator, receiver or
         liquidator in any insolvency, conservatorship, receivership,
         readjustment of debt, marshalling of assets and liabilities or similar
         proceedings, or for the winding up or liquidation of its affairs, and
         the continuance of any such decree or order unstayed and in effect for
         a period of 60 days; or

                  (iv) The Servicer shall voluntarily go into liquidation,
         consent to the appointment of a conservator or receiver or liquidator
         or similar person in any insolvency, readjustment of debt, marshalling
         of assets and liabilities or similar proceedings of or relating to the
         Servicer or of or relating to all or substantially all of its property;
         or a decree or order of a court or agency or supervisory authority
         having jurisdiction in the premises for the appointment of a
         conservator, receiver, liquidator or similar person in any insolvency,
         readjustment of debt, marshalling of assets and liabilities or similar
         proceedings, or for the winding-up or liquidation of its affairs, shall
         have been entered against the Servicer and such decree or order shall
         have remained in force undischarged, unbonded or unstayed for a period
         of 60 days; or the 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

                                       34

<PAGE>

         statute, make an assignment for the benefit of its creditors or
         voluntarily suspend payment of its obligations; or

                  (v) The aggregate amount of cumulative Realized Losses
         incurred since the Cut-Off Date through the last day of the related
         Collection Period divided by the initial Pool Balance exceeds the
         applicable percentages set forth below with respect to such Payment
         Date:

PAYMENT DATE OCCURRING IN                                  PERCENTAGE
-------------------------                                  ----------
December 2001 through November 2005                          3.00%
December 2005 through November 2006                          3.75%
December 2006 through November 2007                          4.25%
December 2007 and thereafter                                 4.75%

                  (b) Then, and in each and every such case, so long as a
Servicer Event of Termination shall not have been remedied within the applicable
grace period, (x) with respect solely to clause (i)(A) above, if such Advance is
not made by 2:00 P.M., New York time, on the Business Day immediately following
the Servicer Remittance Date, the Indenture Trustee may terminate all of the
rights and obligations of the Servicer under this Servicing Agreement and the
Indenture Trustee, or a successor servicer appointed in accordance with Section
6.02, shall immediately make such Advance and assume, pursuant to Section 6.02,
the duties of a successor Servicer and (y) in the case of (i)(B), (ii), (iii),
(iv) and (v) above, the Indenture Trustee shall, at the direction of the Holders
of each Class of Notes evidencing Percentage Interests aggregating not less than
51%, by notice then given in writing to the Servicer (and to the Indenture
Trustee if given by Holders of Notes), terminate all of the rights and
obligations of the Servicer as servicer under this Servicing Agreement. Any such
notice to the Servicer shall also be given to each Rating Agency, the Issuer,
the Depositor and the Seller. On or after the receipt by the Servicer (and by
the Indenture Trustee if such notice is given by the Holders) of such written
notice, all authority and power of the Servicer under this Servicing Agreement,
whether with respect to the Notes or the Mortgage Loans or otherwise, shall pass
to and be vested in the Indenture Trustee pursuant to and under this Section;
and, without limitation, the Indenture Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of each Mortgage Loan and Related Documents or otherwise. The
Servicer agrees to cooperate with the Indenture Trustee (or the applicable
successor Servicer) in effecting the termination of the responsibilities and
rights of the Servicer hereunder, including, without limitation, the delivery to
the Indenture Trustee of all documents and records requested by it to enable it
to assume the Servicer's functions under this Servicing Agreement within ten
Business Days subsequent to such notice, the transfer within one Business Day
subsequent to such notice to the Indenture Trustee (or the applicable successor
Servicer) for the administration by it of all cash amounts that shall at the
time be held by the Servicer and to be deposited by it in the Collection
Account, the Payment Account, the Excess Reserve Fund Account, any REO Account
or any Escrow Account or that have been deposited by the Servicer in such
accounts or thereafter received by the Servicer with respect to the Mortgage
Loans or any REO

                                       35

<PAGE>

Property received by the Servicer. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring the servicing to the
successor Servicer and amending this Servicing Agreement to reflect such
succession as Servicer pursuant to this Section shall be paid by the predecessor
Servicer (or if the predecessor Servicer is the Indenture Trustee, the initial
Servicer) upon presentation of reasonable documentation of such costs and
expenses.

                  Section 6.02. Indenture Trustee to Act; Appointment of
                                Successor.

                  (a) Within 90 days of the time the Servicer (and the Indenture
Trustee, if notice is sent by the Holders) receives a notice of termination
pursuant to Section 6.01 or 5.04, the Indenture Trustee (or such other successor
Servicer as is approved in accordance with this Servicing Agreement) shall be
the successor in all respects to the Servicer in its capacity as servicer under
this Servicing Agreement and the transactions set forth or provided for herein
and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof
arising on and after its succession. As compensation therefor, the Indenture
Trustee (or such other successor Servicer) shall be entitled to such
compensation as the Servicer would have been entitled to hereunder if no such
notice of termination had been given. Notwithstanding the above, (i) if the
Indenture Trustee is unwilling to act as successor Servicer or (ii) if the
Indenture Trustee is legally unable so to act, the Indenture Trustee shall
appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan or
home equity loan servicer having a net worth of not less than $50,000,000 as the
successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder; provided,
that the appointment of any such successor Servicer will not result in the
qualification, reduction or withdrawal of the ratings assigned to the Notes or
the ratings that are in effect by the Rating Agencies as evidenced by a letter
to such effect from the Rating Agencies. Pending appointment of a successor to
the Servicer hereunder, unless the Indenture Trustee is prohibited by law from
so acting, the Indenture Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the successor
shall be entitled to receive compensation out of payments on Mortgage Loans in
an amount equal to the compensation which the Servicer would otherwise have
received pursuant to Section 3.18 (or such other compensation as the Indenture
Trustee and such successor shall agree, not to exceed the Servicing Fee). The
successor servicer shall be entitled to withdraw from the Collection Account all
costs and expenses associated with the transfer of the servicing to the
successor servicer. The appointment of a successor servicer shall not affect any
liability of the predecessor Servicer which may have arisen under this Servicing
Agreement prior to its termination as Servicer to pay any deductible under an
insurance policy pursuant to Section 3.12 or to indemnify the Indenture Trustee
and other Persons pursuant to Section 3.26, nor shall any successor Servicer be
liable for any acts or omissions of the predecessor Servicer or for any breach
by such Servicer of any of its representations or warranties contained herein or
in any related document or agreement. The Indenture Trustee and such successor
shall take such action, consistent with this Servicing Agreement, as shall be
necessary to effectuate any such succession.

                  In the event of a Servicer Event of Termination,
notwithstanding anything to the contrary above, the Indenture Trustee and the
Issuer hereby agree that upon delivery to the Indenture

                                       36

<PAGE>

Trustee by the Servicing Rights Pledgee of a letter signed by the Servicer
within ten Business Days of when notification of such event shall have been
provided to the Indenture Trustee, whereunder the Servicer shall resign as
Servicer under this Servicing Agreement, the Indenture Trustee shall appoint the
Servicing Rights Pledgee or its designee as successor Servicer (provided that at
the time of such appointment the Servicing Rights Pledgee or such designee meets
the requirements of a successor Servicer set forth above) and the Servicing
Rights Pledgee agrees to be subject to the terms of this Servicing Agreement.

                  (b) Any successor, including the Indenture Trustee, to the
Servicer as servicer shall during the term of its service as servicer continue
to service and administer the Mortgage Loans for the benefit of Noteholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Servicer hereunder and a
Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.12.

                  Section 6.03. Waiver of Defaults.

                  The Majority Noteholders may, on behalf of all Noteholders,
waive any events permitting removal of the Servicer as servicer pursuant to this
Article VI; provided, however, that the Majority Noteholders may not waive a
default in making a required payment on a Note without the consent of the Holder
of such Note. Upon any waiver of a past default, such default shall cease to
exist and any Servicer Event of Termination arising therefrom shall be deemed to
have been remedied for every purpose of this Servicing Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereto except to the extent expressly so waived. Notice of any such waiver
shall be given by the Indenture Trustee to the Rating Agencies.

                  Section 6.04. Notification to Noteholders.

                  (a) Upon any termination or appointment of a successor the
Servicer pursuant to this Article VI or Section 5.04, the Indenture Trustee
shall give prompt written notice thereof to the Noteholders at their respective
addresses appearing in the Note Register and each Rating Agency.

                  (b) No later than 60 days after the occurrence of any event
which constitutes or which, with notice or a lapse of time or both, would
constitute a Servicer Event of Termination for five Business Days after a
Responsible Officer of the Indenture Trustee becomes aware of the occurrence of
such an event, the Indenture Trustee shall transmit by mail to all Noteholders
notice of such occurrence unless such default or Servicer Event of Termination
shall have been waived or cured. Such notice shall be given to the Rating
Agencies promptly after any such occurrence.

                  Section 6.05. Survivability of Servicer Liabilities.

                  Notwithstanding anything herein to the contrary, upon
termination of the Servicer hereunder, any liabilities of the Servicer which
accrued prior to such termination shall survive such termination.

                                       37

<PAGE>

                                   ARTICLE VII

                            Miscellaneous Provisions

                  Section 7.01. Amendment.

                  This Servicing Agreement may be amended from time to time by
the Issuer, the Indenture Trustee and the Servicer; provided that any amendment
be accompanied by a letter from the Rating Agencies to the effect that the
amendment will not result in the downgrading or withdrawal of the ratings then
assigned to the Notes.

                  Section 7.02. Governing Law; Jurisdiction.

                  This Servicing Agreement shall be construed in accordance with
the laws of the State of New York, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws. With
respect to any claim arising out of this Servicing Agreement, each party
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York and the United States District Court located in the Borough of
Manhattan in The City of New York, and each party irrevocably waives any
objection which it may have at any time to the laying of venue of any suit,
action or proceeding arising out of or relating hereto brought in any such
courts, irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in any inconvenient forum and further
irrevocably waives the right to object, with respect to such claim, suit, action
or proceeding brought in any such court, that such court does not have
jurisdiction over such party, provided that service of process has been made by
any lawful means.

                  Section 7.03. Notices.

                  All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, or by express delivery service,
to (a) in the case of the Indenture Trustee, 180 East Fifth Street, St. Paul,
Minnesota, 55101, Attention: Structured Finance/SBMSVII 2001-CB4 (telecopy
number (612) 244-0089), or such other address as may hereafter be furnished to
the Issuer and the Servicer in writing by the Indenture Trustee, (b) in the case
of the Servicer, Litton Loan Servicing LP, 5373 W. Alabama, Suite 600, Houston,
Texas 77056, Attention: Janice McClure, or such other address as may be
furnished to the Issuer and the Indenture Trustee in writing by the Servicer and
(c) in the case of the Issuer (or the Owner Trustee on behalf of the Issuer),
c/o Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration (telecopy
number (302) 651-8882). Any notice required or permitted to be mailed to a
Noteholder shall be given by first class mail, postage prepaid, at the address
of such Holder as shown in the Note Register. Notice of any Servicer Event of
Termination shall be given by telecopy and by certified mail. Any notice so
mailed within the time prescribed in this Servicing Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Noteholder

                                       38

<PAGE>

receives such notice. A copy of any notice required to be telecopied hereunder
shall also be mailed to the appropriate party in the manner set forth above.

                  Section 7.04. Severability of Provisions.

                  If any one or more of the covenants, agreements, provisions or
terms of this Servicing Agreement shall for any reason whatsoever be held
invalid, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Servicing Agreement and shall in no way affect the validity or enforceability of
the other provisions of this Servicing Agreement or of the Notes or the rights
of the Holders thereof.

                  Section 7.05. Article and Section References.

                  All article and Section references used in this Servicing
Agreement, unless otherwise provided, are to articles and Sections in this
Servicing Agreement.

                  Section 7.06. Notice to the Rating Agencies.

                  (a) Each of the Indenture Trustee, the Issuer and the Servicer
shall be obligated to use its best reasonable efforts promptly to provide notice
to the Rating Agencies with respect to each of the following of which a
Responsible Officer of the Indenture Trustee or Servicer, as the case may be,
has actual knowledge:

                  (i) any material change or amendment to this Servicing
         Agreement;

                  (ii) the occurrence of any Servicer Event of Termination that
         has not been cured or waived;

                  (iii) the resignation or termination of the Servicer;

                  (iv) any change in the location of any Account; and

                  (vi) if the Indenture Trustee is acting as successor Servicer
         pursuant to Section 6.02 hereof, any event that would result in the
         inability of the Indenture Trustee to make Advances.

                  (vii) In addition, the Servicer shall promptly furnish to each
         Rating Agency copies of the following:

                  (A) each annual statement as to compliance described in
         Section 3.19 hereof;

                  (B) each annual independent public accountants' servicing
         report described in Section 3.20 hereof; and

                                       39

<PAGE>

                  (C) each notice delivered pursuant to Section 6.01(a) hereof
         which relates to the fact that the Servicer has not made an Advance.

                  Any such notice pursuant to this Section 7.06 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to
Fitch, Inc., One State Street Plaza, New York, New York 10004, Attention: Agnes
Teng; Standard & Poor's Ratings Services, 55 Water Street, New York, New York
10041, Attention: Scott Mason; and Moody's Investors Services, Inc., 99 Church
Street, New York, New York 10007, Attention: Jasper Brice.

                  Section 7.07. Further Assurances.

                  Notwithstanding any other provision of this Servicing
Agreement, the Indenture Trustee shall not have any obligation to consent to any
amendment or modification of this Servicing Agreement unless it have been
provided reasonable security or indemnity against its out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.

                  Section 7.08. Benefits of Servicing Agreement.

                  Nothing in this Servicing Agreement or in the Notes, expressed
or implied, shall give to any Person, other than the Noteholders and the parties
hereto and their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Servicing Agreement.

                  Section 7.09. Benefits of Servicing Agreement.

                  It is expressly understood and agreed by the parties hereto
that (a) this Servicing Agreement is executed and delivered by Wilmington Trust
Company, not individually or personally but solely as Owner Trustee of Salomon
Mortgage Loan Trust, Series 2001-CB4, in the exercise of the powers and
authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of Salomon Mortgage Loan
Trust, Series 2001-CB4 is made and intended not as personal represenations,
undertakings and agreements by Wilmington Trust Company but is made and intended
for the purpose of binding only the Issuer, (c) nothing herein contained shall
be construed as creating any liability on Wilmington Trust Company, individually
or personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by any Person claiming by, through or under the parties hereto and (d) under
no circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Issuer under this Servicing Agreement or any other related
documents.

                                       40

<PAGE>

                  IN WITNESS WHEREOF, the Servicer, the Indenture Trustee and
the Issuer have caused this Servicing Agreement to be duly executed by their
respective officers or representatives all as of the day and year first above
written.

                                    LITTON LOAN SERVICING LP,
                                    as Servicer

                                    By: /s/ Janice McClure
                                       --------------------------------------
                                    Name:   Janice McClure
                                    Title:  Senior Vice President

                                    SALOMON MORTGAGE LOAN TRUST, SERIES 2001-CB4
                                    as Issuer

                                    By: Wilmington Trust Company, not in its
                                        individual capacity but solely as Owner
                                        Trustee

                                    By: /s/ Patricia A. Evans
                                       --------------------------------------
                                    Name:   Patricia A. Evans
                                    Title:  Senior Financial Services Officer

                                    U.S. BANK NATIONAL ASSOCIATION,
                                    as Indenture Trustee

                                    By: /s/ Sheryl Christopherson
                                       --------------------------------------
                                    Name:   Sheryl Christopherson
                                    Title:  Vice President

<PAGE>

                                    EXHIBIT A

                  REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT

To:      The Bank of New York
         [Address]

                  Re:      Servicing Agreement, dated as of December 14, 2001,
                           among U.S. Bank National Association, as Indenture
                           Trustee, Litton Loan Servicing LP, as Servicer, and
                           Salomon Mortgage Loan Trust, Series 2001-CB4, as
                           Issuer

                  In connection with the administration of the Mortgage Loans
held by you as the Custodian on behalf of the Indenture Trustee, we request the
release, and acknowledge receipt, of the (Custodial File/[specify documents])
for the Mortgage Loan described below, for the reason indicated.

Mortgagor's Name Address & Zip Code:
-----------------------------------

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

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

_____   1.     Mortgage Loan Paid in Full. (The Servicer hereby certifies that
               all amounts received in connection therewith have been credited
               to the account of the Indenture Trustee.)

_____   2.     Mortgage Loan Liquidated By (The Servicer hereb certifies that
               all proceeds of foreclosure, insurance, condemnation or other
               liquidation have been finally received and credited to the
               account of the Indenture Trustee.)

_____   3.     Mortgage Loan in Foreclosure

_____   4.     Other (explain)______________________________________________

                  If box 1 or 2 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.

                  If box 3 or 4 above is checked, upon our return of all of the
above documents to you as the Custodian, please acknowledge your receipt by
signing in the space indicated below, and returning this form.

<PAGE>

                                                     LITTON LOAN SERVICING LP,
                                                          as Servicer

                                                     By:________________________
                                                        Name:
                                                        Title:

                                                     Date:______________________

Acknowledgment of Documents returned to the Custodian:

                                                     THE BANK OF NEW YORK,
                                                        as Custodian

                                                     By:________________________
                                                        Name:
                                                        Title:

                                                     Date:______________________

<PAGE>

                                    EXHIBIT B

                  INELIGIBLE FORECLOSURE PROPERTY LOAN SCHEDULEEXHIBIT 4.4

<PAGE>

================================================================================

                 SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

                                  as Depositor

                                       and

                            WILMINGTON TRUST COMPANY

                                as Owner Trustee

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

                      AMENDED AND RESTATED TRUST AGREEMENT

                          Dated as of December 14, 2001

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

                  Salomon Mortgage Loan Trust, Series 2001-CB4,

================================================================================

<PAGE>

<TABLE>
<CAPTION>
                                                 Table of Contents

Section                                                                                                        Page
-------                                                                                                        ----

<S>                                                                                                            <C>
Section 1.01. DEFINITIONS.......................................................................................-1-

Section 1.02. OTHER DEFINITIONAL PROVISIONS.....................................................................-1-

Section 2.01. NAME..............................................................................................-2-

Section 2.02. OFFICE............................................................................................-2-

Section 2.03. PURPOSES AND POWERS...............................................................................-2-

Section 2.04. APPOINTMENT OF OWNER TRUSTEE......................................................................-3-

Section 2.05. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE......................................................-3-

Section 2.06. DECLARATION OF TRUST..............................................................................-3-

Section 2.07. LIABILITY OF THE HOLDERS OF THE CERTIFICATES......................................................-4-

Section 2.08. TITLE TO TRUST PROPERTY...........................................................................-4-

Section 2.09. SITUS OF TRUST....................................................................................-4-

Section 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR...................................................-4-

Section 2.11. PAYMENT OF TRUST FEES.............................................................................-6-

Section 2.12. INVESTMENT COMPANY................................................................................-6-

Section 2.13. COMMISSION FILINGS................................................................................-6-

Section 2.14. TRANSFER OF TRUST ESTATE TO OWNER TRUSTEE.........................................................-6-

Section 3.01. CONVEYANCE OF THE COLLATERAL......................................................................-9-

Section 3.02. INITIAL OWNERSHIP.................................................................................-9-

Section 3.03. THE CERTIFICATES..................................................................................-9-

Section 3.04. AUTHENTICATION OF CERTIFICATES...................................................................-10-

                                       -i-

<PAGE>

Section 3.05. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF CERTIFICATES.........................-10-

Section 3.06. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES................................................-12-

Section 3.07. PERSONS DEEMED CERTIFICATEHOLDERS................................................................-13-

Section 3.08. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES........................................-13-

Section 3.09. MAINTENANCE OF OFFICE OR AGENCY..................................................................-13-

Section 3.10. CERTIFICATE PAYING AGENT.........................................................................-13-

Section 4.01. GENERAL AUTHORITY................................................................................-16-

Section 4.02. GENERAL DUTIES...................................................................................-16-

Section 4.03. ACTION UPON INSTRUCTION..........................................................................-16-

Section 4.04. NO DUTIES EXCEPT AS SPECIFIED UNDER SPECIFIED DOCUMENTS OR IN INSTRUCTIONS.......................-17-

Section 4.05. RESTRICTIONS.....................................................................................-17-

Section 4.06. PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN MATTERS...............................-18-

Section 4.07. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN MATTERS.....................................-19-

Section 4.08. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO BANKRUPTCY..........................................-19-

Section 4.09. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER........................................................-19-

Section 4.10. MAJORITY CONTROL.................................................................................-20-

Section 4.11. DOING BUSINESS IN OTHER JURISDICTIONS............................................................-20-

Section 5.01. DISTRIBUTIONS....................................................................................-21-

Section 5.02. METHOD OF PAYMENT................................................................................-21-

Section 5.03. SIGNATURE ON RETURNS.............................................................................-22-

Section 5.04. STATEMENTS TO CERTIFICATEHOLDERS.................................................................-22-

                                      -ii-

<PAGE>

Section 5.05. TAX REPORTING....................................................................................-22-

Section 6.01. ACCEPTANCE OF TRUSTS AND DUTIES..................................................................-23-

Section 6.02. FURNISHING OF DOCUMENTS..........................................................................-24-

Section 6.03. REPRESENTATIONS AND WARRANTIES...................................................................-24-

Section 6.04. RELIANCE; ADVICE OF COUNSEL......................................................................-25-

Section 6.05. NOT ACTING IN INDIVIDUAL CAPACITY................................................................-26-

Section 6.06. OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES OR RELATED DOCUMENTS...................................-26-

Section 6.07. OWNER TRUSTEE MAY OWN CERTIFICATES AND NOTES.....................................................-26-

Section 7.01. OWNER TRUSTEE'S FEES AND EXPENSES................................................................-27-

Section 7.02. INDEMNIFICATION..................................................................................-27-

Section 8.01. TERMINATION OF TRUST AGREEMENT...................................................................-29-

Section 9.01. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE.......................................................-31-

Section 9.02. REPLACEMENT OF OWNER TRUSTEE.....................................................................-31-

Section 9.03. SUCCESSOR OWNER TRUSTEE..........................................................................-32-

Section 9.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE.........................................................-32-
              ----------------------------------------
Section 9.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE....................................................-32-

Section 10.01. AMENDMENTS......................................................................................-34-

Section 10.02. NO LEGAL TITLE TO TRUST ESTATE..................................................................-35-

Section 10.03. LIMITATIONS ON RIGHTS OF OTHERS.................................................................-35-

Section 10.04. NOTICES.........................................................................................-36-

Section 10.05. SEVERABILITY....................................................................................-36-

Section 10.06. SEPARATE COUNTERPARTS...........................................................................-36-

                                      -iii-

<PAGE>

Section 10.07. SUCCESSORS AND ASSIGNS..........................................................................-36-

Section 10.08. NO PETITION.....................................................................................-37-

Section 10.09. NO RECOURSE.....................................................................................-37-

Section 10.10. HEADINGS........................................................................................-37-

Section 10.11. GOVERNING LAW...................................................................................-37-

Section 10.12. INTEGRATION.....................................................................................-37-

                                      -iv-

<PAGE>

EXHIBIT

Exhibit A - Form of Certificate.................................................................................A-1
Exhibit B - Certificate of Trust of Residential Home Loan Trust 2001-HI4........................................B-1
Exhibit C - Form of 144A Investment Representation..............................................................C-1
Exhibit D - Form of Investor Representation Letter..............................................................D-1
Exhibit E - Form of Transferor Representation Letter............................................................E-1
Exhibit F - Form of Certificate of Non-Foreign Status...........................................................F-1
Exhibit G - Form of ERISA Representation Letter.................................................................G-1
</TABLE>

                                       -v-

<PAGE>

         This Amended and Restated Trust Agreement, dated as of December 14,
2001 (as amended from time to time, this "Trust Agreement"), between SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC., a Delaware corporation, as depositor
(the "Depositor") and WILMINGTON TRUST COMPANY, a Delaware banking corporation,
as owner trustee (the "Owner Trustee"),

                                WITNESSETH THAT:

         WHEREAS, the Depositor and the Owner Trustee entered into a trust
agreement dated as of December 11, 2001, in connection with the formation of a
Delaware business trust (the "Original Trust Agreement");

         WHEREAS, the Depositor and the Owner Trustee wish to amend and restate
the Original Trust Agreement;

         NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the Depositor and the Owner Trustee agree as follows:

                                    ARTICLE I

                                   Definitions

         Section 1.01. DEFINITIONS.

         For all purposes of this Trust Agreement, except as otherwise expressly
provided herein or unless the context otherwise requires, capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in
Appendix A to the Indenture dated December 14, 2001 (the "Indenture"), between
Salomon Mortgage Loan Trust, Series 2001-CB4, as issuer and U.S. Bank National
Association, as indenture trustee, which is incorporated by reference herein.
All other capitalized terms used herein shall have the meanings specified
herein.

         Section 1.02. OTHER DEFINITIONAL PROVISIONS.

         (a) All terms defined in this Trust Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.

         (b) As used in this Trust Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Trust Agreement or in any such certificate or other document,
and accounting terms partly defined in this Trust Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this Trust
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the

<PAGE>

definitions contained in this Trust Agreement or in any such certificate or
other document shall control.

         (c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Trust Agreement shall refer to this Trust Agreement as
a whole and not to any particular provision of this Trust Agreement; Article,
Section and Exhibit references contained in this Trust Agreement are references
to Articles, Sections and Exhibits in or to this Trust Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".

         (d) The definitions contained in this Trust Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.

         (e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.

                                   ARTICLE II

                                  ORGANIZATION

         Section 2.01. NAME.

         The trust created hereby (the "Trust") shall be known as "Salomon
Mortgage Loan Trust, Series 2001-CB4," in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.

         Section 2.02. OFFICE.

         The office of the Trust shall be in care of the Owner Trustee at the
Corporate Trust Office or at such other address in Delaware as the Owner Trustee
may designate by written notice to the Certificateholders and the Depositor.

         Section 2.03. PURPOSES AND POWERS.

         The purpose of the Trust is to engage in the following activities:

                  (i) to issue the Notes pursuant to the Indenture and the
         Certificates pursuant to this Trust Agreement and to sell the Notes and
         the Certificates;

                                       -2-

<PAGE>

                  (ii) to purchase the Mortgage Loans and to pay the
         organizational, start-up and transactional expenses of the Trust;

                  (iii) to hold, assign, grant, transfer, pledge and convey the
         Collateral pursuant to the Indenture and to hold, manage and distribute
         to the Certificateholders pursuant to Section 5.01 any portion of the
         Collateral released from the Lien of, and remitted to the Trust
         pursuant to, the Indenture;

                  (iv) to enter into and perform its obligations under the Basic
         Documents to which it is to be a party;

                  (v) to engage in those activities, including entering into
         agreements, that are necessary, suitable or convenient to accomplish
         the foregoing or are incidental thereto or connected therewith; and

                  (vi) subject to compliance with the Basic Documents, to engage
         in such other activities as may be required in connection with
         conservation of the Trust Estate and the making of distributions to the
         Certificateholders and the Noteholders.

         The Trust is hereby authorized to engage in the foregoing activities.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Trust
Agreement or the Basic Documents.

         Section 2.04. APPOINTMENT OF OWNER TRUSTEE.

         The Depositor hereby appoints the Owner Trustee as trustee of the Trust
effective as of the date hereof, to have all the rights, powers and duties set
forth herein.

         Section 2.05. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE.

         The Depositor hereby sells, assigns, transfers, conveys and sets over
to the Trust, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial corpus of the Trust
and shall be deposited in the Certificate Distribution Account.

         Section 2.06. DECLARATION OF TRUST.

         The Owner Trustee hereby declares that it shall hold the Trust Estate
in trust upon and subject to the conditions set forth herein for the use and
benefit of the Certificateholders, subject to the obligations of the Trust under
the Basic Documents. It is the intention of the parties hereto that the Trust
constitute a "business trust" under the Business Trust Statute and that this
Trust Agreement constitute the governing instrument of such business trust.
Effective as of the date hereof, the Owner Trustee shall have all rights, powers
and duties set forth herein and in the Business Trust Statute with

                                       -3-

<PAGE>

respect to accomplishing the purposes of the Trust. It is the intention of the
parties hereto that, solely for federal, state and local income and franchise
tax purposes, the Trust shall be treated as an entity disregarded from the sole
holder of 100% of the Certificates, which Certificates shall initially be owned
by the Depositor or an affiliate thereof, and the provisions of this Trust
Agreement shall be interpreted to further this intention. If more than one
person owns the Certificates for federal income tax purposes, then it is the
intention of the parties hereto, that solely for federal, state and local income
and franchise tax purposes the Trust shall be treated as a partnership, with the
assets of the partnership being the Trust Estate, the partners of the
partnership being the Certificateholders and the Notes being debt of the
partnership and the provisions of this Trust Agreement shall be interpreted to
further this intention. The parties agree that, unless otherwise required by
appropriate tax authorities, the related Administrator (as set forth in the
Administration Agreement) will file or cause to be filed annual or other
necessary returns, reports and other forms consistent with the characterization
of the Trust as an entity wholly owned by the Depositor or an affiliate thereof,
or, if two or more persons own the Certificates, as a partnership for such tax
purposes.

         Section 2.07. LIABILITY OF THE HOLDERS OF THE CERTIFICATES.

         The Holders of the Certificates shall be liable for any entity level
taxes imposed on the Owner Trust.

         Section 2.08. TITLE TO TRUST PROPERTY.

         Except with respect to the Mortgage Loans, which will be assigned of
record to the Indenture Trustee pursuant to the Indenture, legal title to the
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.

         Section 2.09. SITUS OF TRUST.

         The Trust will be located and administered in the State of Delaware.
All bank accounts maintained by the Owner Trustee on behalf of the Trust shall
be located in the State of Delaware or the State of Minnesoata. The Trust shall
not have any employees in any state other than Delaware; provided, however, that
nothing herein shall restrict or prohibit the Owner Trustee from having
employees within or without the State of Delaware or taking actions outside the
State of Delaware in order to comply with Section 2.03. Payments will be
received by the Trust only in Delaware or Minnesota, and payments will be made
by the Trust only from Delaware or Minnesota. The only office of the Trust will
be at the Corporate Trust Office in Delaware.

         Section 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.

         The Depositor hereby represents and warrants to the Owner Trustee that
as of the Closing Date:

                                       -4-

<PAGE>

                  (i) The Depositor is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware, with power
and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted.

                  (ii) The Depositor is duly qualified to do business as a
foreign corporation in all jurisdictions it is required to be qualified to do
business as a foreign corporation under law and is in good standing and has
obtained all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of its property or the conduct of its business shall require
such qualifications and in which the failure to so qualify would have a material
adverse effect on the business, properties, assets or condition (financial or
other) of the Depositor and the ability of the Depositor to perform under this
Trust Agreement.

                  (iii) The Depositor has the power and authority to execute and
deliver this Trust Agreement and to carry out its terms; the Depositor has full
power and authority to sell and assign the property to be sold and assigned to
and deposited with the Trust as part of the Trust and the Depositor has duly
authorized such sale and assignment and deposit to the Trust by all necessary
corporate action; and the execution, delivery and performance of this Trust
Agreement have been duly authorized by the Depositor by all necessary corporate
action.

                  (iv) The consummation of the transactions contemplated by this
Trust Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the articles of
incorporation or bylaws of the Depositor, or any indenture, agreement or other
instrument to which the Depositor is a party or by which it is bound; nor result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); nor violate any law or, to the best of the
Depositor's knowledge, any order, rule or regulation applicable to the Depositor
of any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Depositor or
its properties.

                  (v) The Trust is not required to register as an investment
company under the Investment Company Act and is not under the control of a
Person required to so register.

                  (vi) The transfer of the Mortgage Loans to the Trust as
contemplated herein requires no regulatory approval, other than any such
approvals as have been obtained, and is not subject to any bulk transfer or
similar law in effect in any applicable jurisdiction.

                  (vii) No litigation is pending or, to the best of the
Depositor's knowledge, threatened against the Depositor that, if determined
adversely to the Depositor, would prohibit the Depositor from entering into this
Trust Agreement or, in the Depositor's good faith and reasonable judgment, is
likely to materially and adversely affect either the ability of the Depositor to
perform its obligations under this Trust Agreement or the financial condition of
the Depositor.

                                       -5-

<PAGE>

                  (viii) The Depositor is transferring the Mortgage Loans to the
Trust free and clear of any liens, pledges, charges and security interests.

         Section 2.11. PAYMENT OF TRUST FEES.

         The Indenture Trustee shall pay the Trust's expenses (including
expenses of the Owner Trustee and the Indenture Trustee) incurred with respect
to the performance of the Trust's duties under the Indenture and the Trust
Agreement pursuant to Section 6.07 of the Indenture, or, if such amounts are
unpaid, the Owner Trustee shall be paid pursuant to Section 5.01 hereof.

         Section 2.12. INVESTMENT COMPANY.

         Neither the Depositor nor any holder of a Certificate shall take any
action which would cause the Trust to become an " investment company" which
would be required to register under the Investment Company Act.

         Section 2.13. COMMISSION FILINGS.

         The Depositor hereby agrees to furnish such information and otherwise
cooperate with the Indenture Trustee as necessary for the Indenture Trustee to
perform its duties as provided in Section 7.03 of the Indenture.

         Section 2.14. TRANSFER OF TRUST ESTATE TO OWNER TRUSTEE.

         (a) Effective as of the date hereof, the Depositor does hereby assign,
transfer, and otherwise convey to, and deposit with, the Trust, until this
Agreement terminates pursuant to Section 8.01, the entire Trust Estate, such
conveyance to be made in exchange for the Notes and the Certificates. Such
assignment includes, without limitation, all amounts payable to and all rights
of the holder of the Collateral pursuant to this Agreement.

         The conveyance of the Collateral and all other assets constituting the
Trust Estate by the Depositor as contemplated hereby is absolute and is intended
by the parties to constitute a sale of the Collateral and all other assets
constituting the Trust Estate by the Depositor to the Trust. It is, further, not
intended that such conveyance be deemed a pledge of security for a loan. If such
conveyance is deemed to be a pledge of security for a loan, however, the
Depositor intends that the rights and obligations of the parties to such loan
shall be established pursuant to the terms of this Agreement. The Depositor also
intends and agrees that, in such event:

                  (i) this Agreement shall constitute a security agreement under
         applicable law and shall be deemed to create valid and continuing
         security interest (as defined in the applicable UCC) in the Trust
         Estate (including, without limitation, the Collateral, the Certificate
         Distribution Account and any proceeds thereof) in favor of the Trust,
         which security interest

                                       -6-

<PAGE>

         is prior to all other liens, and is enforceable as such as against
         creditors of and purchasers from the Depositor;

                  (ii) other than the security interest granted to the Trust
         pursuant to this Agreement, the Depositor has not pledged, assigned,
         sold, granted a security interest in, or otherwise conveyed any of the
         Trust Estate, has not authorized the filing of and is not aware of any
         financing statements against the Trust Estate that includes a
         description of collateral covering the Trust Estate other than any
         financing statements relating to the security interest granted to the
         Trust hereunder or that has been terminated. The Depositor is not aware
         of any judgment or tax lien filings against Depositor;

                  (iii) the Depositor owns and has good and marketable title to
         the Trust Estate free and clear of any Lien, claim or encumbrance of
         any Person;

                  (iv) the Certificate Distribution Account constitutes a
         "deposit account" within the meaning of the applicable UCC. The
         Depositor has directed the Indenture Trustee to take all steps
         necessary to cause the Certificate Paying Agent to become the account
         holder of the Certificate Distribution Account. The Certificate
         Distribution Account is not in the name of any Person other than as
         provided in Section 3.10 of this Agreement. The Depositor has not
         consented to the maintenance of the Certificate Distribution Account in
         compliance with instructions of any Person other than the Certificate
         Paying Agent;

                  (vi) the Collateral described under clause (i) of the
         definition of Collateral constitutes "instruments" within the meaning
         of the applicable UCC, the Collateral described under clauses (iii),
         (v), (vi), (vii) and (viii) constitute "general intangibles" within the
         meaning of the applicable UCC and the Collateral described under clause
         (iv) of the definition of Collateral constitutes "proceeds" within the
         meaning of the applicable UCC;

                  (vii) the Depositor has caused or will have caused, within ten
         days, the filing of all appropriate financing statements in the
         appropriate filing offices under applicable law in order to perfect the
         security interest in the Trust Estate granted to the Trust hereunder.
         All financing statements filed or to be filed against the Depositor in
         favor of the Trust (or any subsequent assignee, including, without
         limitation, the Indenture Trustee) in connection herewith describing
         the Trust Estate contain a statement to the following effect, "A
         purchase of, or security interest in, any collateral described in this
         financing statement will violate the rights of the secured party;" and

                  (viii) the Depositor shall, to the extent consistent with this
         Agreement, take such additional reasonable actions as may be necessary
         to ensure that, if this Agreement were deemed to create a security
         interest in the Underlying Certificates and the other assets of the
         Trust Estate, such security interest would be a perfected security
         interest of first priority under applicable law and will be maintained
         as such throughout the life of this Agreement. Notifications to, and
         acknowledgments, receipts or confirmations from, Persons holding such

                                       -7-

<PAGE>

         property, shall be deemed to be notifications to, or acknowledgments,
         receipts or confirmations from, financial intermediaries, bailees or
         agents (as applicable) of the Owner Trustee on behalf of the Trust (or
         any subsequent assignee, including, without limitation, the Indenture
         Trustee) for the purpose of perfecting such security interest under
         applicable law.

                  (c) The Owner Trustee hereby acknowledges the receipt by it of
the Trust Estate and such other documents and instruments referenced above, and
declares that it holds and will hold the Trust Estate and such documents and
instruments and that it holds and will hold all other assets and documents to be
included in the Trust Estate, in trust for the exclusive use and benefit of all
present and future Certificateholders.

                  (d) Except as expressly provided in Section 8.01, neither the
Depositor nor any Certificateholder shall be able to revoke the Trust
established hereunder. Except as provided in Sections 4.01, 4.02, 4.03, 5.01 and
8.01 hereof, the Owner Trustee or Certificate Paying Agent (as Applicable) shall
not assign, sell, dispose of or transfer any interest in, nor may the Depositor
or any Certificateholder withdraw from the Trust, the Collateral or other asset
constituting the Trust Estate.

                                       -8-

<PAGE>

                                   ARTICLE III

                          CONVEYANCE OF THE COLLATERAL;
                                  CERTIFICATES

         Section 3.01. CONVEYANCE OF THE COLLATERAL.

         The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, convey, sell and assign to the Trust, without recourse,
all its right, title and interest in and to the Mortgage Loans, including all
interest and principal received on or with respect to the Mortgage Loans after
the Cut-Off Date (other than payments of principal and interest due on the
Mortgage Loans on or before the Cut-Off Date) the proceeds thereof and all
rights under the Related Documents (including the related Mortgage Files). In
addition, the Depositor hereby transfers, conveys, sells and assigns all of its
right, title, and interest in, to and under the Mortgage Loan Purchase
Agreement. Notwithstanding the above, the Trust shall be entitled to all
scheduled payments of principal and interest due on or before the Cut-Off Date
and collected after the Cut-Off Date with respect to any Mortgage Loan listed on
the Mortgage Loan Schedule.

         The conveyance of the Mortgage Loans by the Depositor to the Trust
hereunder is intended to facilitate the simultaneous issuance of the Notes under
the Indenture and issuance of the Certificates hereunder. The parties hereto
intend that the conveyance of the Mortgage Loans by the Depositor to the Trust
hereunder constitute a sale by the Depositor to the Trust of all of the
Depositor's right, title and interest in and to the Mortgage Loans. However, if
the transactions contemplated by this Trust Agreement are determined to
constitute a financing, the Depositor hereby grants to the Trust a security
interest in the Trust Estate and all distributions thereon and proceeds thereof,
and this Trust Agreement shall constitute a security agreement under applicable
law, and in such event, the parties hereto acknowledge that the Indenture
Trustee, in addition to holding the Collateral for the benefit of the
Noteholders, holds the Mortgage Loans as designee of the Trust.

         Section 3.02. INITIAL OWNERSHIP.

         Upon the formation of the Trust by the contribution by the Depositor
pursuant to Section 2.05 and until the conveyance of the Mortgage Loans pursuant
to Section 3.01 and the issuance of the Certificates, the Depositor shall be the
sole Certificateholder.

         Section 3.03. THE CERTIFICATES.

         The Certificates shall be issued in minimum denominations of a
Certificate Percentage Interest of 10.0000% and integral multiples of 0.0001% in
excess thereof.

         The Certificates shall initially be registered in the name of
Credit-Based Asset Servicing and Securitization LLC ("C-BASS"). The Certificates
shall be executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee and authenticated in the

                                       -9-

<PAGE>

manner provided in Section 3.04. Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust, shall be validly issued
and entitled to the benefit of this Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of authentication and delivery of such Certificates. A Person shall
become a Certificateholder and shall be entitled to the rights and subject to
the obligations of a Certificateholder hereunder upon such Person's acceptance
of a Certificate duly registered in such Person's name, pursuant to Section
3.05.

         A transferee of a Certificate shall become a Certificateholder and
shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to and upon satisfaction of
the conditions set forth in Section 3.05.

         Section 3.04. AUTHENTICATION OF CERTIFICATES.

         Concurrently with the acquisition of the Mortgage Loans by the Trust,
the Owner Trustee or the Certificate Paying Agent shall cause the Certificates
in an initial Certificate Percentage Interest of 100.00% to be executed on
behalf of the Trust, authenticated and delivered to or upon the written order of
the Depositor, signed by an authorized person thereof, without further corporate
action by the Depositor, in authorized denominations. No Certificate shall
entitle its holder to any benefit under this Trust Agreement or be valid for any
purpose unless there shall appear on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit A, executed by the
Owner Trustee or the Certificate Paying Agent, by manual signature; such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.

         Section 3.05. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE
                       OF CERTIFICATES.

         (a) The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.09, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Indenture
Trustee shall be the initial Certificate Registrar. If the Certificate Registrar
resigns or is removed, the Owner Trustee shall appoint a successor Certificate
Registrar.

         Subject to satisfaction of the conditions set forth below with respect
to the Certificates, upon surrender for registration of transfer of any
Certificate at the office or agency maintained pursuant to Section 3.09, the
Owner Trustee shall execute, authenticate and deliver (or shall cause the
Certificate Registrar as its authenticating agent to authenticate and deliver),
in the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Owner Trustee or any authenticating agent. At the
option of a Certificateholder, Certificates may be exchanged for other
Certificates of

                                      -10-

<PAGE>

authorized denominations of a like aggregate amount upon surrender of the
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.09.

         Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Certificateholder
or such Certificateholder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer or exchange shall be
cancelled and subsequently disposed of by the Certificate Registrar in
accordance with its customary practice.

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

         No transfer of any Certificate or interest therein shall be made to any
Person that is not a United States Person. Each Certificateholder shall
establish its non-foreign status by submitting to the Certificate Paying Agent
an IRS Form W-9 and the Certificate of Non-Foreign Status set forth in Exhibit F
hereto.

         (b)(i) No transfer, sale, pledge or other disposition of a Certificate
shall be made unless such transfer, sale, pledge or other disposition is exempt
from the registration requirements of the 1933 Act and any applicable state
securities laws or is made in accordance with the 1933 Act, the Trust Agreement
and applicable laws. In the event of any such transfer, the Certificate
Registrar or the Depositor shall prior to such transfer require the transferee
to execute (A) either (i) an investment letter in substantially the form
attached hereto as Exhibit C (or in such form and substance reasonably
satisfactory to the Certificate Registrar and the Depositor) which investment
letters shall not be an expense of the Trust, the Owner Trustee, the Certificate
Registrar, the Servicer, the Seller or the Depositor and which investment letter
states that, among other things, such transferee (a) is a "qualified
institutional buyer" as defined under Rule 144A, acting for its own account or
the accounts of other "qualified institutional buyers" as defined under Rule
144A, and (b) is aware that the proposed transferor intends to rely on the
exemption from registration requirements under the 1933 Act, provided by Rule
144A or (ii) (a)a written Opinion of Counsel acceptable to and in form and
substance satisfactory to the Certificate Registrar and the Depositor that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trust, the Owner Trustee, the Certificate Registrar, the Servicer, the
Seller or the Depositor and (b) the transferee executes are presentation letter,
substantially in the form of Exhibit D hereto, and the transferor executes are
presentation letter, substantially in the form of Exhibit E hereto, each
acceptable to and in form and substance satisfactory to the Certificate
Registrar and the Depositor certifying the facts surrounding such transfer,
which representation letters shall not be an expense of the Trust, the Owner
Trustee, the Certificate Registrar, the Servicer, the Seller or the Depositor
and (B) the Certificate of Non-Foreign Status (in substantially the form
attached hereto as Exhibit F) acceptable to and in form and substance reasonably
satisfactory to the

                                      -11-

<PAGE>

Certificate Registrar and the Depositor, which certificate shall not be an
expense of the Trust, the Owner Trustee, the Certificate Registrar or the
Depositor. The Certificateholder desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trust, the Owner Trustee, the Certificate
Registrar, the Servicer, the Seller and the Depositor against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws. Neither an Opinion of Counsel nor an investment
letter will be required in connection with the initial transfer of any
Certificate by the Depositor pursuant to the Mortgage Loan Purchase Agreement.

         (ii) No transfer of Certificates or any interest therein shall be made
to any Person unless the Depositor, the Owner Trustee, the Certificate Registrar
and the Servicer are provided with an Opinion of Counsel which establishes to
the satisfaction of the Depositor, the Owner Trustee, the Certificate Registrar
and the Servicer that the purchase of 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
Owner Trustee, the Certificate Registrar or the Servicer 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 Owner Trustee, the
Certificate Registrar, the Seller or the Servicer. In lieu of such Opinion of
Counsel, a Person acquiring such Certificates may provide a certification in the
form of Exhibit G to this Agreement, which the Depositor, the Owner Trustee, the
Certificate Registrar and the Servicer may rely upon without further inquiry or
investigation. Neither an Opinion of Counsel nor a certification will be
required in connection with the initial transfer of any such Certificate by the
Depositor (in which case, the Depositor or any transferee thereof shall be
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets of any Plan).

         (iii) In addition, no transfer of a Certificate shall be permitted, and
no such transfer shall be registered by the Certificate Registrar or be
effective hereunder, unless evidenced by an Opinion of Counsel, which
establishes that such transfer or the registration of such transfer would not
cause the Trust to be classified as a publicly traded partnership, an
association taxable as a corporation, a corporation or a taxable mortgage pool
for federal and relevant state income tax purposes, which Opinion of Counsel
shall not be an expense of the Certificate Registrar and shall be an expense of
the proposed transferee. No Opinion of Counsel will be required if such transfer
is made to a nominee of an existing beneficial holder of a Certificate. No such
Opinion of Counsel will be required for the initial transfer of the Certificates
by the Depositor.

         Section 3.06. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

         If (a) any mutilated Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Certificate and (b)
there shall be delivered to the Certificate Registrar and the Owner Trustee such
security or indemnity as may be required by them to save each of them and the
Issuer from harm, then in the absence of actual notice to the Certificate
Registrar or the Owner Trustee that such Certificate has been acquired by a
protected purchaser, the Owner Trustee shall execute on behalf of the Trust and
the Owner Trustee or the Certificate Paying Agent, as the Trust's authenticating

                                      -12-

<PAGE>

agent, shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and denomination. In connection with the issuance of any new Certificate
under this Section 3.06, the Owner Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Certificate
issued pursuant to this Section 3.06 shall constitute conclusive evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.

         Section 3.07. PERSONS DEEMED CERTIFICATEHOLDERS.

         Prior to due presentation of a Certificate for registration of
transfer, the Owner Trustee, the Certificate Registrar or any Certificate Paying
Agent may treat the Person in whose name any Certificate is registered in the
Certificate Register as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 5.02 and for all other purposes
whatsoever, and none of the Trust, the Owner Trustee, the Certificate Registrar
or any Paying Agent shall be bound by any notice to the contrary.

         Section 3.08. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
                       ADDRESSES.

         The Certificate Registrar shall furnish or cause to be furnished to the
Depositor or the Owner Trustee, within 15 days after receipt by the Certificate
Registrar of a written request therefor from the Depositor or the Owner Trustee,
a list, in such form as the Depositor or the Owner Trustee, as the case may be,
may reasonably require, of the names and addresses of the Certificateholders as
of the most recent Record Date. Each Certificateholder, by receiving and holding
a Certificate, shall be deemed to have agreed not to hold any of the Trust, the
Depositor, the Certificate Registrar or the Owner Trustee accountable by reason
of the disclosure of its name and address, regardless of the source from which
such information was derived.

         Section 3.09. MAINTENANCE OF OFFICE OR AGENCY.

         The Owner Trustee, on behalf of the Trust, shall maintain in an office
or offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Certificates and the Basic Documents may be
served. The Owner Trustee initially designates the Corporate Trust Office of the
Indenture Trustee as its office for such purposes. The Owner Trustee shall give
prompt written notice to the Depositor and the Certificateholders of any change
in the location of the Certificate Register or any such office or agency.

         Section 3.10. CERTIFICATE PAYING AGENT.

                  (a) The Certificate Paying Agent shall make distributions to
Certificateholders from the Certificate Distribution Account on behalf of the
Trust in accordance with the provisions of the Certificates and Section 5.01
hereof from payments remitted to the Certificate Paying Agent

                                      -13-

<PAGE>

by the Indenture Trustee pursuant to Section 3.05 of the Indenture. The Trust
hereby appoints the Indenture Trustee as Certificate Paying Agent and the
Indenture Trustee hereby accepts such appointment and further agrees that it
will be bound by the provisions of this Trust Agreement relating to the
Certificate Paying Agent and shall:

                  (i) hold all sums held by it for the payment of amounts due
         with respect to the Certificates in trust for the benefit of the
         Persons entitled thereto until such sums shall be paid to such Persons
         or otherwise disposed of as herein provided;

                  (ii) give the Owner Trustee notice of any default by the Trust
         of which it has actual knowledge in the making of any payment required
         to be made with respect to the Certificates;

                  (iii) at any time during the continuance of any such default,
         upon the written request of the Owner Trustee, forthwith pay to the
         Owner Trustee on behalf of the Trust all sums so held in Trust by such
         Certificate Paying Agent;

                  (iv) immediately resign as Certificate Paying Agent and
         forthwith pay to the Owner Trustee on behalf of the Trust all sums held
         by it in trust for the payment of Certificates if at any time it ceases
         to meet the standards under this Section 3.10 required to be met by the
         Certificate Paying Agent at the time of its appointment;

                  (v) comply with all requirements of the Code with respect to
         the withholding from any payments made by it on any Certificates of any
         applicable withholding taxes imposed thereon and with respect to any
         applicable reporting requirements in connection therewith;

                  (vi) deliver to the Owner Trustee a copy of the report to
         Noteholders prepared with respect to each Payment Date by the Indenture
         Trustee pursuant to Section 7.05 of the Indenture; and

                  (vii) not institute bankruptcy proceedings against the Issuer
         in connection with this Trust Agreement.

         (b) The Trust may revoke such power and remove the Certificate Paying
Agent if the Owner Trustee determines in its sole discretion that the
Certificate Paying Agent shall have failed to perform its obligations under this
Trust Agreement in any material respect. The Indenture Trustee shall be
permitted to resign as Certificate Paying Agent upon 30 days' written notice to
the Owner Trustee; provided the Indenture Trustee is also resigning as Paying
Agent under the Indenture at such time. In the event that the Indenture Trustee
shall no longer be the Certificate Paying Agent under this Trust Agreement and
Paying Agent under the Indenture, the Trust shall appoint a successor to act as
Certificate Paying Agent (which shall be a bank or trust company) and which
shall also be the successor Paying Agent under the Indenture. The Owner Trustee
shall cause such successor

                                      -14-

<PAGE>

Certificate Paying Agent or any additional Certificate Paying Agent appointed by
the Trust to execute and deliver to the Owner Trustee an instrument to the
effect set forth in this Section 3.10 as it relates to the Certificate Paying
Agent. The Certificate Paying Agent shall return all unclaimed funds to the
Trust and upon removal of a Certificate Paying Agent such Certificate Paying
Agent shall also return all funds in its possession to the Trust. The provisions
of Sections 6.01, 6.03, 6.04 and 7.01 shall apply to the Certificate Paying
Agent to the extent applicable. Any reference in this Agreement to the
Certificate Paying Agent shall include any co-paying agent unless the context
requires otherwise.

         (c) The Certificate Paying Agent shall establish and maintain with
itself the Certificate Distribution Account in which the Certificate Paying
Agent shall deposit, on the same day as it is received from the Indenture
Trustee, each remittance received by the Certificate Paying Agent with respect
to payments made pursuant to the Indenture. The Certificate Paying Agent shall
make all distributions of Certificate Distribution Amounts on the Certificates,
from moneys on deposit in the Certificate Distribution Account.

                                      -15-

<PAGE>

                                   ARTICLE IV

                      AUTHORITY AND DUTIES OF OWNER TRUSTEE

         Section 4.01. GENERAL AUTHORITY.

         The Owner Trustee is authorized and directed to execute and deliver on
behalf of the Trust the Basic Documents to which the Trust is to be a party and
each certificate or other document attached as an exhibit to or contemplated by
the Basic Documents to which the Trust is to be a party and any amendment or
other agreement or instrument described herein, in each case, in such form as
the Owner Trustee shall approve, as evidenced conclusively by the Owner
Trustee's execution thereof. In addition to the foregoing, the Owner Trustee or
an Administrator on behalf of the Trust is obligated to take all actions
required of the Trust pursuant to the Basic Documents.

         Section 4.02. GENERAL DUTIES.

         The Owner Trustee shall be responsible to administer the Trust pursuant
to the terms of this Trust Agreement and the Basic Documents to which the Trust
is a party and in the interest of the Certificateholders, subject to the Basic
Documents and in accordance with the provisions of this Trust Agreement.

         Section 4.03. ACTION UPON INSTRUCTION.

         (a) Subject to this Article IV and in accordance with the terms of the
Basic Documents, the Certificateholders may by written instruction direct the
Owner Trustee in the management of the Trust. Such direction may be exercised at
any time by written instruction of the Certificateholders pursuant to this
Article IV.

         (b) Notwithstanding the foregoing, the Owner Trustee shall not be
required to take any action hereunder or under any Basic Document if the Owner
Trustee shall have reasonably determined, or shall have been advised by counsel,
that such action is likely to result in liability on the part of the Owner
Trustee or is contrary to the terms hereof or of any Basic Document or is
otherwise contrary to law.

         (c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Trust Agreement or
under any Basic Document, or in the event that the Owner Trustee is unsure as to
the application of any provision of this Trust Agreement or any Basic Document
or any such provision is ambiguous as to its application, or is, or appears to
be, in conflict with any other applicable provision, or in the event that this
Trust Agreement permits any determination by the Owner Trustee or is silent or
is incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the circumstances) to
the Certificateholders requesting instruction as to the course of action to be
adopted, and to the extent

                                      -16-

<PAGE>

the Owner Trustee acts in good faith in accordance with any written instructions
received from Holders of Certificates representing a majority of the Certificate
Percentage Interest thereof, the Owner Trustee shall not be liable on account of
such action to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action not inconsistent with this Trust Agreement or the Basic
Documents, as it shall deem to be in the best interests of the
Certificateholders and the Noteholders, and the Owner Trustee shall have no
liability to any Person for such action or inaction.

         Section 4.04. NO DUTIES EXCEPT AS SPECIFIED UNDER SPECIFIED DOCUMENTS
                       OR IN INSTRUCTIONS.

         The Owner Trustee shall not have any duty or obligation to manage, make
any payment with respect to, register, record, sell, dispose of, or otherwise
deal with the Trust Estate, or to otherwise take or refrain from taking any
action under, or in connection with, any document contemplated hereby to which
the Owner Trustee is a party, except as expressly provided (i) in accordance
with the powers granted to and the authority conferred upon the Owner Trustee
pursuant to this Trust Agreement, (ii) in accordance with the Basic Documents
and (iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 4.03; and no implied duties or obligations shall be
read into this Trust Agreement or any Basic Document against the Owner Trustee.
The Owner Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to prepare or file any Securities and Exchange Commission filing
for the Trust or to record this Trust Agreement or any Basic Document. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any liens on any part of the
Trust Estate that result from actions by, or claims against, the Owner Trustee
that are not related to the ownership or the administration of the Trust Estate.

         Section 4.05. RESTRICTIONS.

         (a) The Owner Trustee shall not take any action that, to the actual
knowledge of the Owner Trustee (x) is inconsistent with the purposes of the
Trust set forth in Section 2.03 or (y) would result in the Trust becoming
taxable as a corporation for federal income tax purposes. The Certificateholders
shall not direct the Owner Trustee to take action that would violate the
provisions of this Section 4.05.

         (b) The Owner Trustee shall not convey or transfer any of the Trust's
properties or assets (other than as contemplated in the Indenture), including
those included in the Trust Estate, to any person unless (a) it shall have
received an Opinion of Counsel to the effect that such transaction will not have
any material adverse tax consequence to the Trust or any Certificateholder and
(b) such conveyance or transfer shall not violate the provisions of Section
3.16(b) of the Indenture.

                                      -17-

<PAGE>

         (c) The Trust shall not commingle its assets with those of any other
entity. The Trust shall maintain its financial and accounting books and records
separate from those of any other entity. Except as expressly set forth herein,
the Trust shall pay its indebtedness, operating expenses and liabilities from
its own funds, and the Trust shall not pay the indebtedness, operating expenses
and liabilities of any other entity. The Trust shall maintain appropriate
minutes or other records of all appropriate actions and shall maintain its
office separate from the offices of the Depositor.

         Section 4.06. PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO
                       CERTAIN MATTERS.

         With respect to the following matters, the Owner Trustee shall not take
action unless, at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Certificateholders in writing of the proposed
action and Certificateholders representing a majority of the Certificate
Percentage Interest thereof shall not have notified the Owner Trustee in writing
prior to the 30th day after such notice is given that such Certificateholders
have withheld consent or provided alternative direction:

         (a) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of cash distributions due
and owing under the Mortgage Loans) and the compromise of any action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of cash distributions due and
owing under the Mortgage Loans);

         (b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business Trust
Statute);

         (c) the amendment of the Indenture by a supplemental indenture or other
change to this Trust Agreement or any Basic Document in circumstances where the
consent of any Noteholder is required;

         (d) the amendment of the Indenture by a supplemental indenture or other
change to this Trust Agreement or any Basic Document in circumstances where the
consent of any Noteholder is not required and such amendment materially
adversely affects the interest of the Certificateholders;

         (e) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Trust Agreement
of a successor Certificate Registrar or Certificate Paying Agent or the consent
to the assignment by the Note Registrar, Paying Agent, Indenture Trustee,
Certificate Registrar or Certificate Paying Agent of its obligations under the
Indenture or this Trust Agreement, as applicable;

         (f) the consent to the calling or waiver of any default under any Basic
Document;

         (g) the consent to the assignment by the Indenture Trustee or Servicer
of their respective obligations under any Basic Document;

                                      -18-

<PAGE>

         (h) except as provided in Article VIII hereof, the dissolution,
termination or liquidation of the Trust in whole or in part;

         (i) merge or consolidate the Trust with or into any other entity, or
convey or transfer all or substantially all of the Trust's assets to any other
entity;

         (j) cause the Trust to incur, assume or guaranty any indebtedness other
than as set forth in this Trust Agreement and the Basic Documents;

         (k) perform any act which would make it impossible to carry on the
purposes and powers of the Trust as described in Section 2.03 hereof;

         (l) confess a judgment against the Trust;

         (m) possess Trust assets or assign the Trust's right to property for
other than a Trust purpose as described in Section 2.03 hereof;

         (n) cause the Trust to lend any funds to any entity; or

         (o) change the Trust's purpose and powers from those enumerated in this
Trust Agreement..

         Section 4.07. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN
                       MATTERS.

         The Owner Trustee shall not have the power, except upon the direction
of Certificateholders evidencing not less than a majority of the outstanding
Certificate Percentage Interest of the Certificates to (a) remove the Indenture
Trustee under the Indenture pursuant to Section 6.08 thereof or (b) except as
expressly provided in the Basic Documents, sell the Mortgage Loans after the
termination of the Indenture. The Owner Trustee shall take the actions referred
to in the preceding sentence only upon written instructions signed by
Certificateholders evidencing not less than a majority of the outstanding
Certificate Percentage Interest of the Certificates.

         Section 4.08. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO BANKRUPTCY.

         The Owner Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust without the unanimous prior
approval of all Certificateholders, the Noteholders and the Owner Trustee and
the delivery to the Owner Trustee by each such Certificateholder of a
certificate certifying that such Certificateholder reasonably believes that the
Trust is insolvent. This paragraph shall survive for one year and one day
following termination of this Trust Agreement.

         Section 4.09. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER.

                                      -19-

<PAGE>

         The Certificateholders shall not direct the Owner Trustee to take or to
refrain from taking any action if such action or inaction would be contrary to
or inconsistent with any obligation of the Trust or the Owner Trustee under this
Trust Agreement or any of the Basic Documents or would be contrary to Section
2.03, nor shall the Owner Trustee be obligated to follow any such direction, if
given.

         Section 4.10. MAJORITY CONTROL.

         Except as expressly provided herein, any action that may be taken by
the Certificateholders under this Trust Agreement may be taken by the
Certificateholders evidencing not less than a majority of the outstanding
Certificate Percentage Interest of the Certificates. Except as expressly
provided herein, any written notice of the Certificateholders delivered pursuant
to this Trust Agreement shall be effective if signed by Certificateholders
evidencing not less than a majority of the outstanding Certificate Percentage
Interest of the Certificates at the time of the delivery of such notice.

         Section 4.11. DOING BUSINESS IN OTHER JURISDICTIONS.

         Notwithstanding anything contained herein to the contrary, neither
Wilmington Trust Company nor the Owner Trustee shall be required to take any
action in any jurisdiction other than in the State of Delaware if the taking of
such action will, even after the appointment of a co-trustee or separate trustee
in accordance with Section 9.05 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Wilmington Trust Company, or (iii) subject
Wilmington Trust Company to personal jurisdiction in any jurisdiction other than
the State of Delaware for causes of action arising from acts unrelated to the
consummation of the transactions by Wilmington Trust Company or the Owner
Trustee, as the case may be, contemplated hereby.

                                      -20-

<PAGE>

                                    ARTICLE V

                           APPLICATION OF TRUST FUNDS

         Section 5.01. DISTRIBUTIONS.

         (a) On each Payment Date, the Certificate Paying Agent shall distribute
to the Certificateholders, on a PRO RATA basis based on the Certificate
Percentage Interests thereof, all funds on deposit in the Certificate
Distribution Account and available therefor (as provided in Section 3.05 of the
Indenture), as the Certificate Distribution Amount for such Payment Date as
reduced first, by any amount owing to the Owner Trustee hereunder and second,
any Expenses of the Trust remaining unpaid.

         (b) In the event that any withholding tax is imposed on the
distributions (or allocations of income) to a Certificateholder, such tax shall
reduce the amount otherwise distributable to such Certificateholder in
accordance with this Section 5.01. The Certificate Paying Agent is hereby
authorized and directed to retain or cause to be retained from amounts otherwise
distributable to the Certificateholders sufficient funds for the payment of any
tax that is legally owed by the Trust (but such authorization shall not prevent
the Trust from contesting any such tax in appropriate proceedings, and
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings). The amount of any withholding tax imposed with respect to a
Certificateholder shall be treated as cash distributed to such Certificateholder
at the time it is withheld by the Certificate Paying Agent and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Certificate Paying Agent may in its sole discretion
withhold such amounts in accordance with this paragraph (b).

         (c) Distributions to Certificateholders shall be subordinated to the
creditors of the Trust, including the Noteholders.

         (d) Allocations of profits and losses, as determined for federal income
tax purposes, shall be made to the Certificateholders on a pro rata basis based
on the Certificate Percentage Interests thereof.

         Section 5.02. METHOD OF PAYMENT.

         Subject to Section 8.01(c), distributions required to be made to
Certificateholders on any Payment Date as provided in Section 5.01 shall be made
to each Certificateholder of record on the preceding Record Date either by, in
the case of any Certificateholder owning Certificates having denominations
aggregating at least 10.0000% Certificate Percentage Interest and integral
multiples of 0.0001% in excess thereof, wire transfer, in immediately available
funds, to the account of such Certificateholder at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
to the Certificate Registrar appropriate written instructions at

                                      -21-

<PAGE>

least five Business Days prior to such Payment Date or, if not, by check mailed
to such Certificateholder at the address of such Certificateholder appearing in
the Certificate Register.

         Section 5.03. SIGNATURE ON RETURNS.

         To the extent required and unless otherwise required by law, the Owner
Trustee shall sign on behalf of the Trust the tax returns of the Trust at the
written direction of one of the Administrators on behalf of the Depositor.

         Section 5.04. STATEMENTS TO CERTIFICATEHOLDERS.

         On each Payment Date, the Certificate Paying Agent shall send to each
Certificateholder the statement or statements provided to the Owner Trustee and
the Certificate Paying Agent by the Servicer pursuant to Section 4.01 of the
Servicing Agreement with respect to such Payment Date.

         Section 5.05. TAX REPORTING.

         So long as the Depositor or any affiliate of the Depositor owns 100% of
the Certificates (the "Original Certificateholder"), then no separate federal
and state income tax returns and information returns or statements will be filed
with respect to the Trust and a federal employer identification number shall not
be applied for from the IRS. If the Original Certificateholder is no longer the
sole Certificateholder and the Certificates are held by the Original
Certificateholder and one or more persons for federal income tax purposes, the
subsequent holders of the Certificates by their acceptance hereof, agree to
appoint the Original Certificateholder as their agent for the tax matters
partner and the Original Certificateholder, as agent for such holders, agrees to
perform (itself or through its agent) all duties necessary to comply with
federal and state income tax laws including but not limited to applying for a
federal employer identification number and filing tax returns.

                                      -22-

<PAGE>

                                   ARTICLE VI

                          CONCERNING THE OWNER TRUSTEE

         Section 6.01. ACCEPTANCE OF TRUSTS AND DUTIES.

         The Owner Trustee accepts the trusts hereby created and agrees to
perform its duties hereunder with respect to such trusts but only upon the terms
of this Trust Agreement. The Owner Trustee and the Certificate Paying Agent also
agree to disburse all moneys actually received by it constituting part of the
Trust Estate upon the terms of the Basic Documents and this Trust Agreement. The
Owner Trustee shall not be answerable or accountable hereunder or under any
Basic Document under any circumstances, except (i) for its own willful
misconduct, gross negligence or bad faith or negligent failure to act or (ii) in
the case of the inaccuracy of any representation or warranty contained in
Section 6.03 expressly made by the Owner Trustee. In particular, but not by way
of limitation (and subject to the exceptions set forth in the preceding
sentence):

         (a) No provision of this Trust Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights, duties or powers
hereunder or under any Basic Document if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;

         (b) Under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;

         (c) The Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Trust Agreement or for the due execution hereof
by the Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Trust Estate, or for or in respect of the validity or
sufficiency of the Basic Documents, the Notes, the Certificates, other than the
certificate of authentication on the Certificates, if executed by the Owner
Trustee and the Owner Trustee shall in no event assume or incur any liability,
duty, or obligation to any Noteholder or to any Certificateholder, other than as
expressly provided for herein or expressly agreed to in the Basic Documents;

         (d) The execution, delivery, authentication and performance by it of
this Trust Agreement will not require the authorization, consent or approval of,
the giving of notice to, the filing or registration with, or the taking of any
other action with respect to, any governmental authority or agency;

         (e) The Owner Trustee shall not be liable for the default or misconduct
of the Depositor, the Indenture Trustee or the Servicer under any of the Basic
Documents or otherwise and the Owner Trustee shall have no obligation or
liability to perform the obligations of the Trust under this Trust

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<PAGE>

Agreement or the Basic Documents that are required to be performed by the
Indenture Trustee under the Indenture or the Seller under the Mortgage Loan
Purchase Agreement; and

         (f) The Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it or duties imposed by this Trust Agreement, or
to institute, conduct or defend any litigation under this Trust Agreement or
otherwise or in relation to this Trust Agreement or any Basic Document, at the
request, order or direction of any of the Certificateholders, unless such
Certificateholders have offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right of the Owner Trustee
to perform any discretionary act enumerated in this Trust Agreement or in any
Basic Document shall not be construed as a duty, and the Owner Trustee shall not
be answerable for other than its gross negligence, bad faith or willful
misconduct in the performance of any such act.

         Section 6.02. FURNISHING OF DOCUMENTS.

         The Owner Trustee shall furnish to the Certificateholders promptly upon
receipt of a written reasonable request therefor, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and any
other instruments furnished to the Trust under the Basic Documents.

         Section 6.03. REPRESENTATIONS AND WARRANTIES.

         The Owner Trustee hereby represents and warrants to the Depositor, for
the benefit of the Certificateholders, that:

         (a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Trust Agreement or consummation of the transactions contemplated
thereby;

         (b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Trust Agreement, and this Trust Agreement
will be executed and delivered by one of its officers who is duly authorized to
execute and deliver this Trust Agreement on its behalf;

         (c) Neither the execution nor the delivery by it of this Trust
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or bylaws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound;

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<PAGE>

         (d) This Trust Agreement, assuming due authorization, execution and
delivery by the Depositor, constitutes a valid, legal and binding obligation of
the Owner Trustee, enforceable against it in accordance with the terms hereof
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights generally and to
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;

         (e) The Owner Trustee is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default might have consequences that
would materially and adversely affect the condition (financial or other) or
operations of the Owner Trustee or its properties or might have consequences
that would materially adversely affect its performance hereunder; and

         (f) No litigation is pending or, to the best of the Owner Trustee's
knowledge, threatened against the Owner Trustee which would prohibit its
entering into this Trust Agreement or performing its obligations under this
Trust Agreement.

         Section 6.04. RELIANCE; ADVICE OF COUNSEL.

         (a) The Owner Trustee shall incur no liability to anyone in acting upon
any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond, or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of determination of
which is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer or other authorized officers of the relevant
party, as to such fact or matter and such certificate shall constitute full
protection to the Owner Trustee for any action taken or omitted to be taken by
it in good faith in reliance thereon.

         (b) In the exercise or administration of the Trust hereunder and in the
performance of its duties and obligations under this Trust Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents,
attorneys, custodians or nominees (including persons acting under a power of
attorney) pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents,
attorneys, custodians or nominees (including persons acting under a power of
attorney) if such persons have been selected by the Owner Trustee with
reasonable care, and (ii) may consult with counsel, accountants and other
skilled persons to be selected with reasonable care and employed by it at the
expense of the Trust. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written opinion
or advice of any such counsel, accountants or other such Persons and not
contrary to this Trust Agreement or any Basic Document.

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<PAGE>

         Section 6.05. NOT ACTING IN INDIVIDUAL CAPACITY.

         Except as provided in this Article VI, in accepting the trusts hereby
created Wilmington Trust Company acts solely as Owner Trustee hereunder and not
in its individual capacity, and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this Trust Agreement or
any Basic Document shall look only to the Trust Estate for payment or
satisfaction thereof; except nothing contained herein shall protect the Owner
Trustee (i) for its own willful misconduct, gross negligence or bad faith or
grossly negligent failure to act or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 6.03 expressly made by the Owner
Trustee.

         Section 6.06. OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES OR RELATED
                       DOCUMENTS.

         The recitals contained herein and in the Certificates (other than the
signatures of the Owner Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Owner Trustee assumes no responsibility for
the correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Trust Agreement, of any Basic Document or of the
Certificates (other than the signatures of the Owner Trustee on the
Certificates) or the Notes, or of any Related Documents. The Owner Trustee shall
at no time have any responsibility or liability with respect to the sufficiency
of the Trust Estate or its ability to generate the payments to be distributed to
Certificateholders under this Trust Agreement or the Noteholders under the
Indenture, including, the compliance by the Depositor or the Seller with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Certificate Paying Agent, the Certificate Registrar or the Indenture
Trustee taken in the name of the Owner Trustee.

         Section 6.07. OWNER TRUSTEE MAY OWN CERTIFICATES AND NOTES.

         The Owner Trustee in its individual or any other capacity may, subject
to Section 3.05, become the owner or pledgee of Certificates or Notes and may
deal with the Depositor, the Seller, the Certificate Paying Agent, the
Certificate Registrar and the Indenture Trustee in transactions with the same
rights as it would have if it were not Owner Trustee.

         Section 6.08. PAYMENTS FROM TRUST ESTATE.

         All payments to be made by the Owner Trustee under this Trust Agreement
or any of the Basic Documents to which the Owner Trustee is a party shall be
made only from the income and proceeds of the Trust Estate or from other amounts
required to be provided by the Certificateholders and only to the extent that
the Owner Trust shall have received income or proceeds from the Trust Estate or
the Certificateholders to make such payments in accordance with the terms
hereof. Wilmington Trust Company, in its individual capacity, shall not be
liable for any amounts payable under this Owner Trust Agreement or any of the
Basic Documents to which the Owner Trustee is a party.

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<PAGE>

                                   ARTICLE VII

                          Compensation of Owner Trustee

         Section 7.01. OWNER TRUSTEE'S FEES AND EXPENSES.

         The Owner Trustee shall receive as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof,
and the Owner Trustee shall be reimbursed by the Indenture Trustee from the
Payment Account for its reasonable expenses hereunder and under the Basic
Documents, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Owner Trustee may
reasonably employ in connection with the exercise and performance of its rights
and its duties hereunder and under the Basic Documents.

         Section 7.02.  INDEMNIFICATION.

         C-BASS shall indemnify, defend and hold harmless the Owner Trustee and
its successors, assigns, agents and servants (collectively, the "Indemnified
Parties") from and against, any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever (collectively, "Expenses") which may at any time be
imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this Trust Agreement,
the Basic Documents, the Trust Estate, the administration of the Trust Estate or
the action or inaction of the Owner Trustee hereunder, provided, that:

                  (i) C-BASS shall not be liable for or required to indemnify an
         Indemnified Party from and against Expenses arising or resulting from
         the Owner Trustee's willful misconduct, gross negligence or bad faith
         or as a result of any inaccuracy of a representation or warranty
         contained in Section 6.03 expressly made by the Owner Trustee;

                  (ii) with respect to any such claim, the Indemnified Party
         shall have given C- BASS written notice thereof promptly after the
         Indemnified Party shall have actual knowledge thereof;

                  (iii) while maintaining control over its own defense, C-BASS
         shall consult with the Indemnified Party in preparing such defense; and

                  (iv) notwithstanding anything in this Agreement to the
         contrary, C-BASS shall not be liable for settlement of any claim by an
         Indemnified Party entered into without the prior consent of C-BASS
         which consent shall not be unreasonably withheld.

         The indemnities contained in this Section shall survive the resignation
or termination of the Owner Trustee or the termination of this Trust Agreement.
In the event of any claim, action or

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<PAGE>

proceeding for which indemnity will be sought pursuant to this Section 7.02, the
Owner Trustee's choice of legal counsel, if other than the legal counsel
retained by the Owner Trustee in connection with the execution and delivery of
this Trust Agreement, shall be subject to the approval of C-BASS, which approval
shall not be unreasonably withheld. In addition, upon written notice to the
Owner Trustee and with the consent of the Owner Trustee which consent shall not
be unreasonably withheld, C-BASS has the right to assume the defense of any
claim, action or proceeding against the Owner Trustee.

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<PAGE>

                                  ARTICLE VIII

                         TERMINATION OF TRUST AGREEMENT

         Section 8.01. TERMINATION OF TRUST AGREEMENT.

         (a) This Trust Agreement (other than Article VII) and the Trust shall
terminate and be of no further force or effect upon the earliest of (i) the
final distribution of all moneys or other property or proceeds of the Trust
Estate in accordance with the terms of the Indenture and this Trust Agreement,
(ii) the Final Maturity Date, or (iii) the purchase by the Servicer of all
Mortgage Loans in both Loan Groups pursuant to Section 8.07 of the Indenture.
The bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder shall not (x) operate to terminate this Trust Agreement or the
Trust or (y) 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 all or any part of the Trust or the Trust Estate or
(z) otherwise affect the rights, obligations and liabilities of the parties
hereto.

         (b) Except as provided in Section 8.01(a), neither the Depositor nor
any Certificateholder shall be entitled to revoke or terminate the Trust.

         (c) Notice of any termination of the Trust, specifying the Payment Date
upon which Certificateholders shall surrender their Certificates to the
Certificate Paying Agent for payment of the final distribution and cancellation,
shall be given by the Certificate Paying Agent by letter to the
Certificateholders mailed within five Business Days of receipt of notice of such
termination from the Owner Trustee, stating (i) the Payment Date upon or with
respect to which final payment of the Certificates shall be made upon
presentation and surrender of the Certificates at the office of the Certificate
Paying Agent therein designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such Payment Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Certificate Payment Agent therein specified.
The Certificate Paying Agent shall give such notice to the Owner Trustee and the
Certificate Registrar at the time such notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the Certificate Paying
Agent shall cause to be distributed to Certificateholders amounts distributable
on such Payment Date pursuant to Section 5.01.

         In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Certificate Paying Agent shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. Subject to applicable laws with respect to escheat of funds, if within
one year following the Payment Date on which final payment of the Certificates
was to have been made pursuant to Section 3.05 of the Indenture, all the
Certificates shall not have been surrendered for cancellation, the Certificate
Paying Agent may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost

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<PAGE>

thereof shall be paid out of the funds and other assets that shall remain
subject to this Trust Agreement. Any funds remaining in the Certificate
Distribution Account after exhaustion of such remedies shall be distributed by
the Certificate Paying Agent to the holder of the majority of the Certificate
Percentage Interest of the Certificates.

         (d) Upon the winding up of the Trust and its termination and upon
written notification from one of the Administrators on behalf of the Depositor,
the Owner Trustee shall cause the Certificate of Trust to be cancelled by filing
a certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810(c) of the Business Trust Statute.

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<PAGE>

                                   ARTICLE IX

             SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

         Section 9.01.  ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE.

         The Owner Trustee shall at all times be a corporation satisfying the
provisions of Section 3807(a) of the Business Trust Statute; authorized 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
authorities; and having (or having a parent that has) long-term debt obligations
with a rating of at least A by Moody's and/or Standard & Poor's. If such
corporation shall publish reports of condition at least annually pursuant to law
or to the requirements of the aforesaid supervising or examining authority, then
for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section 9.01, the Owner Trustee shall resign immediately in the manner and
with the effect specified in Section 9.02.

         Section 9.02. REPLACEMENT OF OWNER TRUSTEE.

         The Owner Trustee may at any time resign and be discharged from the
trusts hereby created by giving 30 days' prior written notice thereof to the
Certificateholders and the Depositor. Upon receiving such notice of resignation,
the Indenture Trustee shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.

         If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 9.01 and shall fail to resign after
written request therefor by the Indenture Trustee, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Indenture Trustee may remove the Owner
Trustee. If the Indenture Trustee shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Indenture Trustee shall
promptly appoint a successor Owner Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the outgoing Owner Trustee so
removed and one copy to the successor Owner Trustee, and shall pay all fees owed
to the outgoing Owner Trustee. Any resignation or removal of the Owner Trustee
and appointment of a successor Owner Trustee pursuant to any of the provisions
of this Section shall not become effective until acceptance of appointment by
the successor Owner Trustee pursuant to Section 9.03 and payment of all fees and
expenses owed to the outgoing Owner Trustee.

                                      -31-

<PAGE>

         Section 9.03. SUCCESSOR OWNER TRUSTEE.

         Any successor Owner Trustee appointed pursuant to Section 9.02 shall
execute, acknowledge and deliver to the Indenture Trustee and to its predecessor
Owner Trustee an instrument accepting such appointment under this Trust
Agreement, and thereupon the resignation or removal of the predecessor Owner
Trustee shall become effective, and such successor Owner Trustee, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor under this Trust Agreement,
with like effect as if originally named as Owner Trustee. The predecessor Owner
Trustee shall upon payment of its fees and expenses deliver to the successor
Owner Trustee all documents and statements and monies held by it under this
Trust Agreement; and the predecessor Owner Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor Owner Trustee all
such rights, powers, duties and obligations.

         No successor Owner Trustee shall accept appointment as provided in this
Section 9.03 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 9.01.

         Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 9.03, the Indenture Trustee shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Noteholders and the Rating
Agencies. If the Indenture Trustee shall fail to mail such notice within 10 days
after acceptance of such appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Indenture Trustee.

         Section 9.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE.

         Any Person into which the Owner Trustee may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
Person succeeding to all or substantially all of the corporate trust business of
the Owner Trustee, shall be the successor of the Owner Trustee hereunder,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding;
provided, that such Person shall be eligible pursuant to Section 9.01 and,
provided, further, that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.

         Section 9.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

         Notwithstanding any other provisions of this Trust Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Owner Trustee
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons to act as co-trustee, jointly with the Owner Trustee, or as
separate trustee or trustees, of all or any part of the Trust Estate, and to
vest in such Person, in

                                      -32-

<PAGE>

such capacity, such title to the Trust or any part thereof and, subject to the
other provisions of this Section, such powers, duties, obligations, rights and
trusts as the Owner Trustee may consider necessary or desirable. No co-trustee
or separate trustee under this Trust Agreement shall be required to meet the
terms of eligibility as a successor Owner Trustee pursuant to Section 9.01 and
no notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 9.03.

         Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

         (a) All rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed, the Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Estate or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the Owner
Trustee;

         (b) No trustee under this Trust Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Trust Agreement;
and

         (c) The Owner Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.

         Any notice, request or other writing given to the Owner 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 Trust
Agreement and the conditions of this Article IX. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Owner Trustee or separately, as may be provided therein,
subject to all the provisions of this Trust Agreement, specifically including
every provision of this Trust Agreement relating to the conduct of, affecting
the liability of, or affording protection to, the Owner Trustee. Each such
instrument shall be filed with the Owner Trustee.

         Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as 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
Trust 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 Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.

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<PAGE>

                                    ARTICLE X

                                  MISCELLANEOUS

         Section 10.01. AMENDMENTS.
                        ----------

         (a) This Trust Agreement may be amended from time to time by the
parties hereto as specified in this Section 10.01, provided that any amendment,
except as provided in subparagraph (e) below, shall be accompanied by an Opinion
of Counsel, addressed to the Owner Trustee and obtained by the Issuer to the
effect that such amendment (i) complies with the provisions of this Section and
(ii) will not cause the Trust to be subject to an entity level tax.

         (b) If the purpose of the amendment (as detailed therein) is to correct
any mistake, eliminate any inconsistency, cure any ambiguity or deal with any
matter not covered (i.e., to give effect to the intent of the parties), it shall
not be necessary to obtain the consent of any Certificateholders, but the Owner
Trustee shall be furnished with (A) a letter from the Rating Agencies that the
amendment will not result in the downgrading or withdrawal of the rating then
assigned to any Note and (B) an Opinion of Counsel to the effect that such
action will not adversely affect in any material respect the interests of any
Certificateholders.

         (c) If the purpose of the amendment is to prevent the imposition of any
federal or state taxes at any time that any Certificate is outstanding (i.e.,
technical in nature), it shall not be necessary to obtain the consent of any
Certificateholder, but the Owner Trustee shall be furnished with an Opinion of
Counsel that such amendment is necessary or helpful to prevent the imposition of
such taxes and is not materially adverse to any Certificateholder.

         (d) If the purpose of the amendment is to add or eliminate or change
any provision of the Trust Agreement other than as contemplated in (b) and (c)
above, the amendment shall require either (a) a letter from the Rating Agency
that the amendment will not result in the downgrading or withdrawal of the
rating then assigned to any Note or (b) the consent of Certificateholders
evidencing a majority of the Certificate Percentage Interest of the Certificates
and the Indenture Trustee; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received
that are required to be distributed on any Certificate without the consent of
the related Certificateholder or (ii) reduce the aforesaid percentage of
Certificates the Certificateholders of which are required to consent to any such
amendment, without the consent of the Certificateholders then outstanding.

         (e) If the purpose of the amendment is to provide for the holding of
any of the Certificates in book-entry form, it shall require the consent of
Certificateholders of all such Certificates then outstanding; provided, that the
Opinion of Counsel specified in subparagraph (a) above shall not be required.

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<PAGE>

         (f) If the purpose of the amendment is to provide for the issuance of
additional certificates representing an interest in the Trust, it shall not be
necessary to obtain the consent of any Certificateholder, but the Owner Trustee
shall be furnished with (A) an Opinion of Counsel to the effect that such action
will not adversely affect in any material respect the interests of any
Certificateholders and (B) a letter from the Rating Agencies that the amendment
will not result in the downgrading or withdrawal of the rating then assigned to
any Note.

         (g) Promptly after the execution of any such amendment or consent, the
party who sought such amendment shall furnish written notification of the
substance of such amendment or consent to each Certificateholder, the Indenture
Trustee and each of the Rating Agencies. It shall not be necessary for the
consent of Certificateholders or the Indenture Trustee pursuant to this Section
10.01 to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents (and any other consents of Certificateholders
provided for in this Trust Agreement or in any other Basic Document) and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable requirements as the Owner Trustee may
prescribe.

         (h) In connection with the execution of any amendment to any agreement
to which the Trust is a party, other than this Trust Agreement, the Owner
Trustee shall be entitled to receive and conclusively rely upon an Opinion of
Counsel to the effect that such amendment is authorized or permitted by the
documents subject to such amendment and that all conditions precedent in the
Basic Documents for the execution and delivery thereof by the Trust or the Owner
Trustee, as the case may be, have been satisfied.

         Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State of the State of Delaware.

         Section 10.02. NO LEGAL TITLE TO TRUST ESTATE.

         The Certificateholders shall not have legal title to any part of the
Trust Estate. The Certificateholders shall be entitled to receive distributions
with respect to their undivided beneficial interest therein only in accordance
with Articles V and VIII. No transfer, by operation of law or otherwise, of any
right, title or interest of the Certificateholders to and in their ownership
interest in the Trust Estate shall operate to terminate this Trust Agreement or
the trusts hereunder or entitle any transferee to an accounting or to the
transfer to it of legal title to any part of the Trust Estate.

         Section 10.03. LIMITATIONS ON RIGHTS OF OTHERS.

         Except for Section 2.07, the provisions of this Trust Agreement are
solely for the benefit of the Owner Trustee, the Depositor, the
Certificateholders and, to the extent expressly provided herein, the Indenture
Trustee and the Noteholders, and nothing in this Trust Agreement (other than
Section 2.07), whether express or implied, shall be construed to give to any
other Person any legal or

                                      -35-

<PAGE>

equitable right, remedy or claim in the Trust Estate or under or in respect of
this Trust Agreement or any covenants, conditions or provisions contained
herein.

         Section 10.04. NOTICES.

         (a) Unless otherwise expressly specified or permitted by the terms
hereof, all notices shall be in writing and shall be deemed given upon receipt,
if to the Owner Trustee, addressed to Wilmington Trust Company, Corporate Trust
Administration, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890, Attention: Corporate Trust Administration; if to the Depositor,
addressed to Salomon Brothers Mortgage Securities VII, Inc., 390 Greenwich
Street, 4th Floor, New York, New York 10013; if to the Rating Agencies,
addressed to Fitch, Inc., One State Street Plaza, New York, New York 10003,
Moody's Investors Service, Inc., 99 Church Street, 4th Floor, New York, New York
10001 and Standard & Poor's, 55 Water Street - 41 Floor, New York, New York
10041, Attention: Structured Finance Department - MBS or, as to each party, at
such other address as shall be designated by such party in a written notice to
each other party.

         (b) 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
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Trust Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.

         (c) A copy of any notice delivered to the Owner Trustee or the Trust
shall also be delivered to the Depositor.

         Section 10.05. SEVERABILITY.

         Any provision of this Trust Agreement that is prohibited 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 shall not invalidate or render unenforceable such provision in any
other jurisdiction.

         Section 10.06. SEPARATE COUNTERPARTS.

         This Trust Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.

         Section 10.07. SUCCESSORS AND ASSIGNS.

         All representations, warranties, covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, each of the
Depositor, the Owner Trustee and its successors and

                                      -36-

<PAGE>

each Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument or
action by a Certificateholder shall bind the successors and assigns of such
Certificateholder.

         Section 10.08. NO PETITION.

         The Owner Trustee, by entering into this Trust Agreement and each
Certificateholder, by accepting a Certificate, hereby covenant and agree that
they will not at any time institute against the Depositor or the Trust, or join
in any institution against the Depositor or the Trust of, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations with respect to the Certificates, the Notes,
this Trust Agreement or any of the Basic Documents. This section shall survive
for one year following the termination of this Trust Agreement.

         Section 10.09. NO RECOURSE.

         Each Certificateholder by accepting a Certificate acknowledges that
such Certificateholder's Certificates represent beneficial interests in the
Trust only and do not represent interests in or obligations of the Depositor,
the Seller, the Owner Trustee, the Indenture Trustee or any Affiliate thereof
and no recourse may be had against such parties or their assets, except as may
be expressly set forth or contemplated in this Trust Agreement, the Certificates
or the Basic Documents.

         Section 10.10. HEADINGS.

         The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.

         Section 10.11. GOVERNING LAW.

         THIS TRUST AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

         Section 10.12. INTEGRATION.

         This Trust Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understanding pertaining thereto.

                                      -37-

<PAGE>

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

                                       SALOMON BROTHERS MORTGAGE
                                       SECURITIES VII, INC.

                                       By: /s/ Susan Mills
                                          --------------------------------------
                                       Name:   Susan Mills
                                       Title:  Assistant Vice President

                                       WILMINGTON TRUST COMPANY,
                                       not in its individual
                                       capacity but solely as
                                       Owner Trustee, except with
                                       respect to the
                                       representations and
                                       warranties contained in
                                       Section 6.03 hereof,

                                       By: /s/ Patricia A. Evans
                                          --------------------------------------
                                       Name:   Patricia A. Evans
                                       Title:  Senior Financial Services Officer

Acknowledged and Agreed:

U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee, Certificate Registrar
and Certificate Paying Agent

By: /s/ Sheryl Christopherson
   ----------------------------------------
Name: Sheryl Christopherson
Title: Vice President

Solely for purposes of Section 7.02:

CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC

By: /s/ Ivan Halpern
   ----------------------------------------
Name:   Ivan Halpern
Title:  Vice President

<PAGE>

                                    EXHIBIT A

                          SALOMON MORTGAGE LOAN TRUST,
                           SERIES 2001-CB4 CERTIFICATE

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES AS
DESCRIBED IN THE AGREEMENT (AS DEFINED 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 WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 3.05 OF THE AMENDED AND RESTATED TRUST
AGREEMENT (THE "AGREEMENT").

         NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED EITHER (I) A CERTIFICATION IN THE FORM OF EXHIBIT
G TO THE AGREEMENT FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER SUBJECT TO THE
PROHIBITED TRANSACTION RESTRICTIONS AND THE FIDUCIARY RESPONSIBILITY
REQUIREMENTS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE"),
ANY PERSON ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF ANY SUCH PLAN OR ANY
PERSON USING "PLAN ASSETS," WITHIN THE MEANING OF THE DEPARTMENT OF LABOR
REGULATION AT 29 C.F.R. SS.2510.3-101, TO ACQUIRE THIS CERTIFICATE (COLLECTIVELY
A "PLAN INVESTOR"), OR (II) IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION IN
THE NAME OF A PLAN INVESTOR, AN OPINION OF COUNSEL, TO THE EFFECT THAT THE
PURCHASE OR HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW,
WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT
ENACTMENTS) AND WILL NOT SUBJECT THE COMPANY, THE OWNER TRUSTEE, THE SERVICER OR
THE CERTIFICATE REGISTRAR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT.

         NO TRANSFER OF ANY CERTIFICATE OR INTEREST THEREIN SHALL BE MADE TO ANY
PERSON THAT IS NOT A UNITED STATES PERSON. EACH CERTIFICATEHOLDER SHALL
ESTABLISH ITS NON-FOREIGN STATUS BY

                                       A-1

<PAGE>

SUBMITTING TO THE CERTIFICATE PAYING AGENT AN IRS FORM W-9 AND THE CERTIFICATE
OF NON-FOREIGN STATUS SET FORTH IN EXHIBIT F HERETO.

         THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE COMPANY, THE SERVICER, THE INDENTURE TRUSTEE, OR THE OWNER TRUSTEE
OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE
AGREEMENT OR THE BASIC DOCUMENTS.

                                       A-2

<PAGE>

Certificate No. ____                      Final Maturity Date:

Cut-off Date:
November 1, 2001                          Certificate Percentage Interest of
                                          this Certificate: ____%

Date of Amended and
Restated Trust Agreement:
December 14, 2001

First Payment Date:
December 26, 2001

                                       A-3

<PAGE>

                          SALOMON MORTGAGE LOAN TRUST,
                           SERIES 2001-CB4 CERTIFICATE

         evidencing a fractional undivided interest in the Trust Estate, the
property of which consists primarily of the Mortgage Loans, created by SALOMON
BROTHERS MORTGAGE SECURITIES VII, INC. (hereinafter called the "Company," which
term includes any successor entity under the Agreement referred to below).

                  This Certificate is payable solely from the assets of the
Trust Estate, and does not represent an obligation of or interest in the
Company, the Seller, the Servicer, the Indenture Trustee, the Owner Trustee, or
any of their affiliates. This Certificate is not guaranteed or insured by any
governmental agency or instrumentality or by the Company, the Seller, the
Servicer, the Indenture Trustee, the Owner Trustee or any of their affiliates.
None of the Company, the Seller, the Servicer, the Indenture Trustee, the Owner
Trustee, or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.

                  This certifies that ______________ is the registered owner of
the Certificate Percentage Interest evidenced by this Certificate (as set forth
on the face hereof) in certain distributions with respect to the Trust Estate,
consisting primarily of the Mortgage Loans, created by Salomon Brothers Mortgage
Securities VII, Inc. The Trust (as defined herein) was created pursuant to a
Trust Agreement, dated as of December 11, 2001 and an Amended and Restated Trust
Agreement, dated as specified above (as amended and supplemented from time to
time, the "Agreement") between the Company and Wilmington Trust Company, as
owner trustee (the "Owner Trustee," which term includes any successor entity
under the Agreement), a summary of certain of the pertinent provisions of which
is set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
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, a distribution 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 (the "Payment Date"), commencing on the
first Payment Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
in an amount equal to the pro rata portion evidenced by this Certificate (based
on the Certificate Percentage Interest stated on the face hereon) of the
Certificate Distribution Amount, if any, required to be distributed to Holders
of Certificates on such Payment Date. Distributions on this Certificate will be
made as provided in the Agreement by the Certificate Paying Agent by wire
transfer or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon.

                                       A-4

<PAGE>

                  Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Certificate Paying Agent of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency maintained by the Certificate Registrar for that purpose. The
initial Certificate Percentage Interest of this Certificate is set forth above.
The Certificate Percentage Interest hereof will be reduced to the extent of the
distributions allocable to principal.

                  No transfer of this Certificate will be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is to be
made, (i) the Certificate Registrar or the Company may require an opinion of
counsel acceptable to and in form and substance satisfactory to the Certificate
Registrar and the Company that such transfer is exempt (describing the
applicable exemption and the basis therefor) from or is being made pursuant to
the registration requirements of the Securities Act of 1933, as amended, and of
any applicable statute of any state and (ii) the transferee shall execute an
investment letter in the form described in the Agreement and (iii) the
Certificate Registrar shall require the transferee to execute an investment
letter and a Certificate of Non-Foreign Status in the form described by the
Agreement(or if a Certificate of Non-Foreign Status is not provided, an Opinion
of Counsel as described in the Agreement), which investment letter and
certificate or Opinion of Counsel shall not be at the expense of the Trust, the
Owner Trustee, the Certificate Registrar or the Company. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trust, the Owner Trustee, the Company, the Servicer and the Certificate
Registrar 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. In connection
with any such transfer, the Certificate Registrar (unless otherwise directed by
the Company) will also require either (i) a representation letter, in the form
of Exhibit G to this Agreement, stating that the transferee is not an employee
benefit or other plan subject to the prohibited transaction restrictions or the
fiduciary responsibility requirements of ERISA or Section 4975 of the Code
("Plan"), any person acting, directly or indirectly, on behalf of any such plan
or any person using the "plan assets," within the meaning of the Department of
Labor regulations at 29 C.F.R. ss.2510.3-101, to effect such acquisition
(collectively, a "Plan Investor") or (ii) if such transferee is a Plan Investor,
an opinion of counsel acceptable to and in form and substance satisfactory to
the Company, the Owner Trustee, the Servicer and the Certificate Registrar, to
the effect that the purchase or holding of the Certificate is permissible under
applicable law, will not constitute or result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code (or comparable provisions of
any subsequent enactments) and will not subject the Company, the Owner Trustee,
the Servicer or the Certificate Registrar to any obligation or liability in
addition to those undertaken in the Agreement.

                  All terms used in this Certificate which are defined in the
Agreement shall have the meanings assigned to them in the Agreement.

                  The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Certificate
Distribution Account that have been released from

                                       A-5

<PAGE>

the lien of the Indenture for payment hereunder and that neither the Owner
Trustee in its individual capacity nor the Company is personally liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.

                  The Holder of this Certificate acknowledges and agrees that
its rights to receive distributions in respect of this Certificate are
subordinated to the rights of the Noteholders as described in the Indenture,
dated as of December 14, 2001 between Salomon Mortgage Loan Trust, Series
2001-CB4 (the"Trust") and U.S. Bank National Association, as Indenture Trustee
(the "Indenture").

                  Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Company, or join in any institution against the Company or the Trust
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Certificates, the Notes, the Agreement or any of the Basic Documents.

                  The Agreement permits the amendment thereof as specified
below, provided that any amendment be accompanied by an Opinion of Counsel to
the Owner Trustee to the effect that such amendment complies with the provisions
of the Agreement and will not cause the Trust to be subject to an entity level
tax. If the purpose of the amendment is to correct any mistake, eliminate any
inconsistency, cure any ambiguity or deal with any matter not covered, it shall
not be necessary to obtain the consent of any Holder, but the Owner Trustee
shall be furnished with a letter from the Rating Agencies that the amendment
will not result in the downgrading or withdrawal of the rating then assigned to
any Note. If the purpose of the amendment is to prevent the imposition of any
federal or state taxes at any time that any Note is outstanding, it shall not be
necessary to obtain the consent of any Holder, but the Owner Trustee shall be
furnished with an Opinion of Counsel that such amendment is necessary or helpful
to prevent the imposition of such taxes and is not materially adverse to any
Holder. If the purpose of the amendment is to add or eliminate or change any
provision of the Agreement, other than as specified in the preceding two
sentences, the amendment shall require either (a) a letter from the Rating
Agencies that the amendment will not result in the downgrading or withdrawal of
the rating then assigned to any Note or (b) the consent of Holders of a majority
of the Certificate Percentage Interests of the Certificates and the Indenture
Trustee; PROVIDED, HOWEVER, that no such amendment shall (i) reduce in any
manner the amount of, or delay the time of, payments received that are required
to be distributed on any Certificate without the consent of the related
Certificateholder or (ii) reduce the aforesaid percentage of Certificates the
Holders of which are required to consent to any such amendment without the
consent of the Holders of all such Certificates then outstanding.

                  As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registerable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar, accompanied
by a

                                       A-6

<PAGE>

written instrument of transfer in form satisfactory to 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 authorized denominations
evidencing the same Class and aggregate Certificate Percentage Interest will be
issued to the designated transferee. The initial Certificate Registrar appointed
under the Agreement is the Owner Trustee.

                  Except as provided in the Agreement, the Certificates are
issuable only in minimum denominations of a 10.0000% Certificate Percentage
Interest and in integral multiples of a 0.0001% Certificate Percentage Interest
in excess thereof. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations, as requested by the Holder
surrendering the same. This Certificate is issued in the Certificate Percentage
Interest above.

                  No service charge will be made for any such registration of
transfer or exchange, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.

                  The Owner Trustee, the Certificate Paying Agent, the
Certificate Registrar and any agent of the Owner Trustee, the Certificate Paying
Agent, 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
Owner Trustee, the Certificate Paying Agent, the Certificate Registrar or any
such agent shall be affected by any notice to the contrary.

                  This Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.

                  The obligations created by the Agreement in respect of the
Certificates and the Trust created thereby shall terminate upon the earliest of
(i) the final distribution of all moneys or other property or proceeds of the
Trust Estate in accordance with the terms of the Indenture and the Agreement,
(ii) the Final Maturity Date or (iii) the purchase by the Servicer of the
Mortgage Loans in both Loan Groups pursuant to Section 8.07 of the Indenture.

                  Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, or an
authenticating agent by manual signature, this Certificate shall not be entitled
to any benefit under the Agreement or be valid for any purpose.

                                       A-7

<PAGE>

                  IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust
and not in its individual capacity, has caused this Certificate to be duly
executed.

                                  SALOMON MORTGAGE LOAN TRUST, SERIES
                                  2001-CB4

                                  By:  WILMINGTON TRUST COMPANY,
                                       not in its individual capacity but solely
                                       as Owner Trustee

Dated:                                 ______________________________
                                                Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Certificates referred to in the within mentioned
Agreement.

WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee

By:______________________________
         Authorized Signatory

or       ______________________________,
         as Authenticating Agent of the Trust

By:      ______________________________
         Authorized Signatory

                                       A-8

<PAGE>

                                   ASSIGNMENT

         FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE

-----------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)

-----------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing

-----------------------------------------------------------------------------
to transfer said Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.

Dated:
                                             _________________________________*/
                                             Signature Guaranteed:

                                             ____________________*/

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

*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.

                                       A-9

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for the information of the
Certificate Paying Agent:

         Distribution shall be made by wire transfer in immediately available
funds to _______________________________________________________________________
for the account of ________________________________________, account number
______________, or, if mailed by check, to ______________.

         Applicable statements should be mailed to __________________.

                                       ------------------------------
                                       Signature of assignee or agent
                                       (for authorization of wire transfer only)

                                      A-10

<PAGE>

                                    EXHIBIT B
                             TO THE TRUST AGREEMENT

                              CERTIFICATE OF TRUST

                                       OF

                  SALOMON MORTGAGE LOAN TRUST, SERIES 2001-CB4

         THIS Certificate of Trust of SALOMON MORTGAGE LOAN TRUST, 2001-CB4 (the
"Trust") is being duly executed and filed on behalf of the Trust by the
undersigned, as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. C.ss.3801 et seq.) (the "Act").

         1. NAME. The name of the business trust formed by this Certificate of
Trust is SALOMON MORTGAGE LOAN TRUST, 2001-CB4.

         2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust in the State of Delaware are ________________, __________________,
______________, Delaware ___________.

         3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
filing.

         IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
of Trust in accordance with Section 3811(a)(1) of the Act.

                                                WILMINGTON TRUST COMPANY,
                                                not in its individual capacity
                                                but solely as Trustee

                                                By:_____________________
                                                Name:
                                                Title:

                                       B-1

<PAGE>

                                    EXHIBIT C

                  [FORM OF RULE 144A INVESTMENT REPRESENTATION]

             Description of Rule 144A Securities, including numbers:

                     ______________________________________
                     ______________________________________
                     ______________________________________
                     ______________________________________

                  The undersigned seller, as registered holder (the "Seller"),
intends to transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").

                  1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 1933 Act.

                  2. The Buyer warrants and represents to, and covenants with,
the Owner Trustee and the Depositor (as defined in the Amended and Restated
Trust Agreement (the "Agreement"), dated as of December 14, 2001 between Salomon
Brothers Mortgage Securities VII, Inc., as Depositor and Wilmington Trust
Company as Owner Trustee pursuant to Section 3.05 of the Agreement and U.S. Bank
National Association as indenture trustee, as follows:

                           a. The Buyer understands that the Rule 144A
         Securities have not been registered under the 1933 Act or the
         securities laws of any state.

                           b. The Buyer considers itself a substantial,
         sophisticated institutional investor having such knowledge and
         experience in financial and business matters that it is capable of
         evaluating the merits and risks of investment in the Rule 144A
         Securities.

                                       C-1

<PAGE>

                           c. The Buyer has been furnished with all information
         regarding the Rule 144A Securities that it has requested from the
         Seller, the Indenture Trustee, the Owner Trustee or the Servicer.

                           d. Neither the Buyer nor anyone acting on its behalf
         has offered, transferred, pledged, sold or otherwise disposed of the
         Rule 144A Securities, any interest in the Rule144A Securities or any
         other similar security to, or solicited any offer to buy or accept a
         transfer, pledge or other disposition of the Rule 144A Securities, any
         interest in the Rule 144A Securities or any other similar security
         from, or otherwise approached or negotiated with respect to the Rule
         144A Securities, any interest in the Rule 144A Securities or any other
         similar security with, any person in any manner, or made any general
         solicitation by means of general advertising or in any other manner, or
         taken any other action, that would constitute a distribution of the
         Rule 144A Securities under the 1933 Act or that would render the
         disposition of the Rule 144A Securities a violation of Section 5 of the
         1933 Act or require registration pursuant thereto, nor will it act, nor
         has it authorized or will it authorize any person to act, in such
         manner with respect to the Rule 144A Securities.

                           e. The Buyer is a "qualified institutional buyer" as
         that term is defined in Rule144A under the 1933 Act and has completed
         either of the forms of certification to that effect attached hereto as
         Annex 1 or Annex 2. The Buyer is aware that the sale to it is being
         made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
         Securities for its own account or the accounts of other qualified
         institutional buyers, understands that such Rule144A Securities 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.

                  3. The Buyer represents that:

                  (i)      either (a) or (b) is satisfied, as marked below:

                  ____ a. The Buyer is not an employee benefit or other plan
         subject to the Employee Retirement Income Security Act of 1974, as
         amended ("ERISA"),or Section 4975 of the Internal Revenue Code of 1986
         (the "Code"), a 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 at29 C.F.R. ss.2510.3-101 and will provide a certification
         in the form of Exhibit G to the Trust Agreement to that effect; or

                  ____ b. The Buyer will provide the Depositor, the Owner
         Trustee, the Certificate Registrar and the Servicer with an opinion of
         counsel, satisfactory to the Depositor, the Owner Trustee, the
         Certificate Registrar and the Servicer, to the effect that the

                                       C-2

<PAGE>

         purchase and holding of a Certificate by or on behalf of the Buyer is
         permissible under applicable law, will not constitute or result in a
         prohibited transaction under Section 406 of ERISA or Section 4975 of
         the Code (or comparable provisions of any subsequent enactments) and
         will not subject the Depositor, the Owner Trustee, the Certificate
         Registrar or the Servicer to any obligation or liability (including
         liabilities under ERISA or Section 4975 of the Code) in addition to
         those undertaken in the Trust Agreement, which opinion of counsel shall
         not be an expense of the Depositor, the Owner Trustee, the Certificate
         Registrar or the Servicer; and

                  (ii) the Buyer is familiar with the prohibited transaction
restrictions and fiduciary responsibility requirements of Sections 406 and 407
of ERISA and Section 4975 of the Code and understands that each of the parties
to which this certification is made is relying and will continue to rely on the
statements made in this paragraph 3.

                  4. This document may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.

                                       C-3

<PAGE>

                  IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.

--------------------------                       --------------------------
Print Name of Seller                             Print Name of Buyer

By:____________________                          By:____________________
Name:                                                     Name:
Title:                                           Title:

Taxpayer Identification:                         Taxpayer Identification:

No.____________________                          No.____________________
Date:____________________                        Date:____________________

                                       C-4

<PAGE>

                                                            ANNEX 1 TO EXHIBIT C
                                                            --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

             [For Buyers Other Than Registered Investment Companies]

         The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:

         1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

         2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer 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 Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.

         ___      CORPORATION, ETC. The Buyer is a corporation (other than a
                  bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or
                  charitable organization described in Section 501(c)(3) of the
                  Internal Revenue Code.

         ___      BANK. The Buyer (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.

---------------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least$10,000,000 in securities.

                                       C-5

<PAGE>

          ___     SAVINGS AND LOAN. The Buyer (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 $25,000,000 as demonstrated in
                  its latest annual financial statements.

         ___      BROKER-DEALER. The Buyer is a dealer registered pursuant to
                  Section 15 of the Securities Exchange Act of 1934.

         ___      INSURANCE COMPANY. The Buyer 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 or
                  territory or the District of Columbia.

         ___      STATE OR LOCAL PLAN. The Buyer 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 Buyer is an employee benefit plan within the
                  meaning of Title I of the Employee Retirement Income Security
                  Act of 1974.

         ___      INVESTMENT ADVISER. The Buyer is an investment adviser
                  registered under the Investment Advisers Act of 1940.

         ___      SBIC. The Buyer is a Small Business Investment Company
                  licensed by the U.S. Small Business Administration under
                  Section 301(c) or (d) of the Small Business Investment Act of
                  1958.

         ___      BUSINESS DEVELOPMENT COMPANY. The Buyer is a business
                  development company as defined in Section 202(a)(22) of the
                  Investment Advisers Act of 1940.

         ___      TRUST FUND. The Buyer is a trust fund whose trustee is a bank
                  or trust company and whose participants are exclusively (a)
                  plans 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,
                  or (b) employee benefit plans within the meaning of Title I of
                  the Employee Retirement Income Security Act of 1974, but is
                  not a trust fund that includes as participants individual
                  retirement accounts or H.R. 10 plans.

         3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the

                                       C-6

<PAGE>

Buyer, if the Buyer is a dealer, (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.

         4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.

         5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Rule 144A
Securities are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule144A.

___      ___      Will the Buyer be purchasing the Rule 144A
Yes      No       Securities only for the Buyer's own account?

         6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer 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 Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer 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 Buyer 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 Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.

                                      -----------------------------
                                      Print Name of Buyer

                                      By:_______________________
                                      Name:
                                      Title:

                                      Date:    _______________________

                                       C-7

<PAGE>

                                                            ANNEX 2 TO EXHIBIT C
                                                            --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

              [For Buyers That Are Registered Investment Companies]

                  The undersigned hereby certifies as follows in connection with
the Rule 144A Investment Representation to which this Certification is attached:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.

                  2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer"as defined in SEC Rule 144A because (i) the Buyer
is an investment company registered under the Investment Company Act of 1940,
and (ii) as marked below, the Buyer alone, or the Buyer'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 Buyer's most recent fiscal
year. For purposes of determining the amount of securities owned by the Buyer or
the Buyer's Family of Investment Companies, the cost of such securities was
used.

         ____     The Buyer owned $___________________ in securities (other than
                  the excluded securities referred to below) as of the end of
                  the Buyer's most recent fiscal year (such amount being
                  calculated in accordance with Rule 144A).

         ____     The Buyer 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 Buyer'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 Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.

                                       C-8

<PAGE>

                  5. The Buyer is familiar with Rule 144A and understands that
each of the parties to which this certification is made are relying and will
continue to rely on the statements made herein because one or more sales to the
Buyer will be in reliance on Rule 144A. In addition, the Buyer will only
purchase for the Buyer's own account.

                  6. The undersigned will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.

-----------------------------
Print Name of Buyer

By:_______________________
Name:
Title:

IF AN ADVISER:

-----------------------------
Print Name of Buyer

Date:    _______________________

                                       C-9

<PAGE>

                                    EXHIBIT D

                     FORM OF INVESTOR REPRESENTATION LETTER

                                                 ___________, 20__

Salomon Brothers Mortgage Securities VII, Inc.
390 Greenwich Street, 4th Floor
New York, New York 10013

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101

               Re:      Salomon Mortgage Loan Trust, Series 2001-CB4

Ladies and Gentlemen:

                  __________________ (the "Purchaser") intends to purchase from
(the "Seller") a ___% Certificate Percentage Interest of Certificates of Series
2001-CB4 (the "Certificates"), issued pursuant to the Amended and Restated Trust
Agreement (the "Trust Agreement"), dated as of December 14, 2001, between
Salomon Brothers Mortgage Securities VII, Inc. as depositor (the"Company") and
Wilmington Trust Company, as owner trustee (the "Owner Trustee"), as
acknowledged and agreed by U.S. Bank National Association as Certificate
Registrar. All terms used herein and not otherwise defined shall have the
meanings set forth in the Trust Agreement. The Purchaser hereby certifies,
represents and warrants to, and covenants with, the Company and the Certificate
Registrar that:

                  1. The Purchaser understands that (a) the Certificates have
         not been and will not be registered or qualified under the Securities
         Act of 1933, as amended (the"Act") or any state securities law, (b) the
         Company is not required to so register or qualify the Certificates, (c)
         the Certificates may be resold only if registered and qualified
         pursuant to the provisions of the Act or any state securities law, or
         if an exemption from such registration and qualification is available,
         (d) the Trust Agreement contains restrictions regarding the transfer of
         the Certificates and (e) the Certificates will bear a legend to the
         foregoing effect.

                  2. The Purchaser is acquiring the Certificates for its own
         account for investment only and not with a view to or for sale in
         connection with any distribution thereof in any manner that would
         violate the Act or any applicable state securities laws.

                                       D-1

<PAGE>

                  3. The Purchaser is (a) a substantial, sophisticated
         institutional investor having such knowledge and experience in
         financial and business matters, and, in particular, in such matters
         related to securities similar to the Certificates, such that it is
         capable of evaluating the merits and risks of investment in the
         Certificates, (b) able to bear the economic risks of such an investment
         and (c) an "accredited investor" within the meaning of Rule 501(a)
         promulgated pursuant to the Act.

                  4. The Purchaser has been furnished with, and has had an
         opportunity to review (a) [a copy of the Private Placement Memorandum,
         dated , 20 , relating to the Certificates (b)] a copy of the Trust
         Agreement and [b] [c] such other information concerning the
         Certificates, the Mortgage Loans and the Company as has been requested
         by the Purchaser from the Company or the Seller and is relevant to the
         Purchaser's decision to purchase the Certificates. The Purchaser has
         had any questions arising from such review answered by the Company or
         the Seller to the satisfaction of the Purchaser. [If the Purchaser did
         not purchase the Certificates from the Seller in connection with the
         initial distribution of the Certificates and was provided with a copy
         of the Private Placement Memorandum (the "Memorandum") relating to the
         original sale (the "Original Sale") of the Certificates by the Company,
         the Purchaser acknowledges that such Memorandum was provided to it by
         the Seller, that the Memorandum was prepared by the Company solely for
         use in connection with the Original Sale and the Company did not
         participate in or facilitate in any way the purchase of the
         Certificates by the Purchaser from the Seller, and the Purchaser agrees
         that it will look solely to the Seller and not to the Company with
         respect to any damage, liability, claim or expense arising out of,
         resulting from or in connection with (a) error or omission, or alleged
         error or omission, contained in the Memorandum, or (b) any information,
         development or event arising after the date of the Memorandum.]

                  5. The Purchaser has not and will not nor has it authorized or
         will it authorize any person to (a) offer, pledge, sell, dispose of or
         otherwise transfer any Certificate, any interest in any Certificate or
         any other similar security to any person in any manner, (b) solicit any
         offer to buy or to accept a pledge, disposition of other transfer of
         any Certificate, any interest in any Certificate or any other similar
         security from any person in any manner, (c) otherwise approach or
         negotiate with respect to any Certificate, any interest in any
         Certificate or any other similar security with any person in any
         manner, (d) make any general solicitation by means of general
         advertising or in any other manner or (e) take any other action, that
         (as to any of (a) through (e) above) would constitute a distribution of
         any Certificate under the Act, that would render the disposition of any
         Certificate a violation of Section 5 of the Act or any state securities
         law, or that would require registration or qualification pursuant
         thereto. The Purchaser will not sell or otherwise transfer any of the
         Certificates, except in compliance with the provisions of the Trust
         Agreement.

                  6. The Purchaser represents:

                  (i) that either (a) or (b) is satisfied, as marked below:

                                       D-2

<PAGE>

                  ____ a. The Purchaser is not an employee benefit or other plan
         subject to the Employee Retirement Income Security Act of 1974, as
         amended ("ERISA"), or Section4975 of the Internal Revenue Code of 1986
         (the "Code"), a 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 and will provide a certification
         in the form of Exhibit G to the Trust Agreement to that effect; or

                  ____ b. The Purchaser will provide the Depositor, the Owner
         Trustee, the Certificate Registrar and the Servicer with an opinion of
         counsel, satisfactory to the Depositor, the Owner Trustee, the
         Certificate Registrar and the Servicer, to the effect that the purchase
         and holding of a Certificate by or on behalf of the Purchaser is
         permissible under applicable law, will not constitute or result in a
         prohibited transaction under Section 406 of ERISA or Section 4975 of
         the Code (or comparable provisions of any subsequent enactments) and
         will not subject the Depositor, the Owner Trustee, the Certificate
         Registrar or the Servicer to any obligation or liability (including
         liabilities under ERISA or Section 4975 of the Code) in addition to
         those undertaken in the Trust Agreement, which opinion of counsel shall
         not be an expense of the Depositor, the Owner Trustee, the Certificate
         Registrar or the Servicer; and

                  (ii) the Purchaser is familiar with the prohibited transaction
         restrictions and fiduciary responsibility requirements of Sections 406
         and 407 of ERISA and Section 4975 of the Code and understands that each
         of the parties to which this certification is made is relying and will
         continue to rely on the statements made in this paragraph 6.

                  7. The Purchaser is acquiring the Certificate for its own
         behalf and is not acting as agent or custodian for any other person or
         entity in connection with such acquisition;

                  8. The Purchaser is not a non-United States person for federal
         income tax purposes.

                                           Very truly yours,

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

                                       D-3

<PAGE>

                                    EXHIBIT E

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                __________, 20__

Salomon Brothers Mortgage Securities VII, Inc.
390 Greenwich Street, 4th Floor
New York, New York 10013

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101

             Re:      Salomon Mortgage Loan Trust, Series 2001-CB4

Ladies and Gentlemen:

                  ____________________ (the "Purchaser") intends to purchase
from (the "Seller") a ___% Certificate Percentage Interest of Certificates of
Series 2001-CB4 (the "Certificates"), issued pursuant to the Amended and
Restated Trust Agreement (the "Trust Agreement"), dated as of December 14, 2001
between Salomon Brothers Mortgage Securities VII, Inc. as depositor (the
"Company") and Wilmington Trust Company, as owner trustee (the "Owner Trustee"),
as acknowledged and agreed by U.S. Bank National Association as Certificate
Registrar. All terms used herein and not otherwise defined shall have the
meanings set forth in the Trust Agreement. The Seller hereby certifies,
represents and warrants to, and covenants with, the Company and the Certificate
Registrar that:

                  Neither the Seller 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, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act, in any manner set forth in the foregoing sentence with respect to
any Certificate. The Seller has not and will not sell

                                       E-1

<PAGE>

or otherwise transfer any of the Certificates, except in compliance with the
provisions of the Trust Agreement.

                                                     Very truly yours,

                                                     --------------------------
                                                              (Seller)

                                                     By:____________________
                                                     Name:
                                                     Title:

                                       E-2

<PAGE>

                                    EXHIBIT F

                        CERTIFICATE OF NON-FOREIGN STATUS

         This Certificate of Non-Foreign Status ("certificate") is delivered
pursuant to Section 3.05 of the Amended and Restated Trust Agreement, dated as
of December 14, 2001 (the "Trust Agreement"),between Salomon Brothers Mortgage
Securities VII, Inc., as depositor and Wilmington Trust Company, as Owner
Trustee, in connection with the acquisition of, transfer to or possession by the
undersigned, whether as beneficial owner (the "Beneficial Owner"), or nominee on
behalf of the Beneficial Owner of the Salomon Mortgage Loan Trust, Series
2001-CB4 (the"Certificate"). Capitalized terms used but not defined in this
certificate have the respective meanings given them in the Trust Agreement.

         Each holder must complete Part I, Part II (if the holder is a nominee),
and in all cases sign and otherwise complete Part III.

         In addition, each holder shall submit with the Certificate an IRS Form
W-9 relating to such holder.

         To confirm to the Trust that the provisions of Sections 871, 881 or
1446 of the Internal Revenue Code (relating to withholding tax on foreign
shareholders and partners) do not apply in respect of the Certificate held by
the undersigned, the undersigned hereby certifies:

Part I -                            Complete Either A or B

                  A.       Individual as Beneficial Owner

                           1.       I am (The Beneficial Owner is ) not a
                                    non-resident alien for purposes of U.S.
                                    income taxation;

                           2.       My (The Beneficial Owner's) name and home
                                    address are:

                                    _____________________________
                                    _____________________________
                                    _____________________________; and

                           3.       My (The Beneficial Owner's) U.S. taxpayer
                                    identification number (Social Security
                                    Number) is _______________.

                  B.       Corporate, Partnership or Other Entity as Beneficial
                           Owner

                                       F-1

<PAGE>

                           1.       (Name of the Beneficial Owner) is not a
                                    foreign corporation, foreign partnership,
                                    foreign trust or foreign estate (as those
                                    terms are defined in the Code and Treasury
                                    Regulations;

                           2.       The Beneficial Owner's office address and
                                    place of incorporation (if applicable) is
                                    ______________; and

                           3.       The Beneficial Owner's U.S. employer
                                    identification number is.

Part II -                  Nominees

         If the undersigned is the nominee for the Beneficial Owner, the
undersigned certifies that this certificate has been made in reliance upon
information contained in:

                  _____    an IRS Form W-9

                  _____    a form such as this or substantially similar

provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trust at least thirty (30) days prior to the date that the
form relied upon becomes obsolete, and (ii) in connection with change in
Beneficial Owners, the undersigned agrees to submit a new Certificate of
Non-Foreign Status to the Trust promptly after such change.

Part III -                 Declaration

         The undersigned, as the Beneficial Owner or a nominee thereof, agrees
to notify the Trust within sixty (60) days of the date that the Beneficial Owner
becomes a foreign person. The undersigned understands that this certificate may
be disclosed to the Internal Revenue Service by the Trust and any false
statement contained therein could be punishable by fines, imprisonment or both.

                                       F-2

<PAGE>

         Under penalties of perjury, I declare that I have examined this
certificate and to the best of my knowledge and belief it is true, correct and
complete and will further declare that I will inform the Trust of any change in
the information provided above, and, if applicable, I further declare that I
have the authority* to sign this document.

------------------------
Name

------------------------
Title (if applicable)

------------------------
Signature and Date

*NOTE:            If signed pursuant to a power of attorney, the power of
attorney must accompany this certificate.

                                       F-3

<PAGE>

                                    EXHIBIT G

                       FORM OF ERISA REPRESENTATION LETTER

                               _____________, 20__

Salomon Brothers Mortgage Securities VII, Inc.      Wilmington Trust Company
390 Greenwich Street, 4th Floor                     Rodney Square North
New York, New York 10013                            1100 North Market Street
                                                    Wilmington, Delaware 19890
U.S. Bank National Association                      Litton Loan Servicing LP
180 East Fifth Street                               4828 Loop Central Drive
St. Paul, Minnesota 55101                           Houston, Texas 77081

                Re: Salomon Mortgage Loan Trust, Series 2001-CB4

Dear Sirs:

                  __________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") a ___% Certificate
Percentage Interest of Salomon Mortgage Loan Trust, Series 2001-CB4 (the
"Certificates"), issued pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement")dated December 14, 2001 among Salomon Brothers Mortgage
Securities VII, as depositor (the "Depositor") and Wilmington Trust Company, as
trustee (the "Owner Trustee"). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned thereto in the Trust Agreement.

                  The Transferee hereby certifies, represents and warrants to,
and covenants with, the Depositor, the Owner Trustee, the Certificate Registrar
and the Servicer that:

                  (1) The Certificates (i) are not being acquired by, and will
         not be transferred to, any employee benefit plan within the meaning of
         section 3(3) of the Employee Retirement Income Security Act of 1974, as
         amended ("ERISA") or other retirement arrangement, including individual
         retirement accounts and annuities, Keogh plans and bank collective
         investment funds and insurance company general or separate accounts in
         which such plans, accounts or arrangements are invested, that is
         subject to Section 406 of ERISA or Section 4975 of the Internal Revenue
         Code of 1986 (the "Code") (any of the foregoing, a "Plan"), (ii) are
         not being acquired with "plan assets" of a Plan within the meaning of
         the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101,
         and (iii) will not be transferred to any Plan or any entity that is
         deemed to be investing in plan assets within the meaning of the DOL
         regulation, 29 C.F.R. ss. 2510.3-101; and(2) The Transferee is familiar
         with the prohibited transaction restrictions and fiduciary
         responsibility requirements of Sections 406 and 407 of ERISA and
         Section 4975 of the Code and understands that each of the parties to

                                       G-1

<PAGE>

         which this certification is made is relying and will continue to rely
         on the statements made herein.

                                               Very truly yours,

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

                                               By:______________________
                                               Name:
                                               Title:

                                       G-2

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